Kroger reports Q2 gross margin 22.5% of sales vs. 22.1% last year

The improvement in gross margin was primarily attributable to the sale of Kroger (KR) Specialty Pharmacy, lower supply chain costs, lower shrink, and decreased fuel sales, partially offset by the mix effect from growth in pharmacy sales, which has lower margins, and price investments. The FIFO gross margin rate, excluding rent, depreciation and amortization, fuel and adjustment items increased 39 basis points compared to the same period last year. The improvement in rate was primarily attributable to the sale of Kroger Specialty Pharmacy, lower shrink and lower supply chain costs, partially offset by the mix effect from growth in pharmacy sales, which has lower margins, and price investments.