Kroger Company (KR) AI Stock Analysis

• Market Cap: $44.40B
• Dividend Yield: 1.86%
• Average Volume (3M): 7.39M
• Price to Earnings (P/E): 18.3
• Beta (1Y): 0.07
• Revenue Growth: -1.94%
• EPS Growth: 23.94%
• Country: US
• Employees: 409,000
• Sector: Consumer Defensive
• Sector Strength: 94
• Industry: Grocery Stores
• EPS (TTM): 3.68
• Shares Outstanding: 660,893,500
• 10 Day Avg. Volume: 7,454,936
• 30 Day Avg. Volume: 7,393,598
• PEG Ratio: 0.76
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.29
• Price to Cash Flow (P/CF): 10.50
• P/FCF Ratio: 35.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $68.77
• Price Target Upside: 3.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

Kroger's overall performance is solid, with strong operational efficiency and positive earnings call sentiment. However, financial risks from increased leverage and declining free cash flow, along with leadership uncertainty, moderately impact the score.

Positive Factors

Alternative Profit Streams

Long-term margin support is expected from growth in alternative profit streams and improving digital profitability.

Customer Loyalty

Kroger has grown loyal households for 12 consecutive quarters, seeing opportunities for stronger engagement with customer groups through personalized promotions and shelf prices.

Market Position

Strong digital and in-store execution supports market share trends, positioning Kroger well in the grocery sector.

Negative Factors

Competitive Pressure

Walmart is gaining share across most categories as evidenced by their superior comparables versus other conventional grocers.

Legal Issues

Kroger is being sued by both ACI and C&S Wholesale, with ACI's lawsuit seeking billions in damages and C&S seeking $125 million.

Management Changes

The resignation of CEO Rodney McMullen following a Board investigation introduces uncertainty in leadership.

Kroger Company Business Overview & Revenue Model

Company Description

The Kroger Co. operates as a retailer in the United States. The company operates combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses. Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce; and multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products, and toys. The company's marketplace stores offer full-service grocery, pharmacy, health and beauty care, and perishable goods, as well as general merchandise, including apparel, home goods, and toys; and price impact warehouse stores provide grocery, and health and beauty care items, as well as meat, dairy, baked goods, and fresh produce items. It also manufactures and processes food products for sale in its supermarkets and online; and sells fuel through 1,613 fuel centers. As of January 29, 2022, the company operated 2,726 supermarkets under various banner names in 35 states and the District of Columbia. The Kroger Co. was founded in 1883 and is based in Cincinnati, Ohio.

How the Company Makes Money

Kroger makes money primarily through the sale of groceries and related products across its vast network of retail stores. The company's revenue model is built on a combination of in-store sales, e-commerce, and private label products, which offer higher margins. Key revenue streams include the sale of fresh produce, meat, dairy, and packaged foods, as well as health and beauty products, household essentials, and fuel. Kroger also earns revenue from its pharmacy operations and financial services. Significant factors contributing to its earnings include strategic partnerships with technology companies to enhance its digital capabilities and customer loyalty programs that drive repeat business. Additionally, Kroger leverages its extensive distribution network and data analytics to optimize inventory management and pricing strategies.

Kroger Company Financial Statement Overview

Summary

Kroger demonstrates solid financial performance with stable revenues and profitability. Improvements in profit margins and strong ROE highlight operational efficiency. However, increased leverage and declining free cash flow indicate some financial risks.

Income Statement

Kroger displays robust revenue figures with a slight decline from $150.039B in 2024 to $147.123B in 2025, indicating a revenue growth rate of -1.94%. The gross profit margin improved to 22.7%, reflecting efficient cost management. The net profit margin is stable at 1.81%, aligning with industry norms. However, EBIT and EBITDA margins show an upward trend, suggesting operational efficiency improvements.

Balance Sheet

The debt-to-equity ratio increased to 3.03, indicating higher leverage, which could pose risk during economic downturns. The equity ratio stands at 15.74%, implying moderate financial stability. Return on equity is 32.17%, showcasing strong profitability. However, the decrease in stockholders' equity from $11.615B to $8.281B is a concern.

Cash Flow

Operating cash flow to net income ratio is strong at 2.17, indicating healthy cash generation relative to net income. Free cash flow decreased significantly by 38.4% from 2024 to 2025, highlighting potential cash management issues. Free cash flow to net income ratio is 0.67, showing adequate conversion of earnings to free cash flow.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
147.12B	150.04B	148.26B	137.89B	132.50B
	Gross Profit
33.40B	30.24B	31.78B	30.35B	30.90B
	EBIT
3.85B	3.10B	4.13B	3.48B	2.78B
	EBITDA
7.76B	7.04B	7.03B	6.06B	7.29B
	Net Income Common Stockholders
2.67B	2.16B	2.24B	1.66B	2.58B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.96B	3.10B	2.06B	2.90B	2.78B
	Total Assets
52.62B	50.51B	49.54B	49.09B	48.64B
	Total Debt
25.08B	19.25B	20.41B	20.44B	20.59B
	Net Debt
24.87B	17.36B	19.58B	18.62B	18.90B
	Total Liabilities
44.34B	38.90B	39.52B	39.66B	39.09B
	Stockholders Equity
8.28B	11.62B	10.01B	9.43B	9.55B
Cash Flow		Free Cash Flow
1.78B	2.88B	1.23B	3.58B	3.95B
	Operating Cash Flow
5.79B	6.79B	4.31B	6.19B	6.82B
	Investing Cash Flow
-3.23B	-3.75B	-3.02B	-2.61B	-2.81B
	Financing Cash Flow
-490.00M	-2.17B	-2.29B	-3.44B	-2.71B

Kroger Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 66.46
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KR, the sentiment is Positive. The current price of 66.46 is above the 20-day moving average (MA) of 66.34, above the 50-day MA of 64.93, and above the 200-day MA of 57.95, indicating a bullish trend. The MACD of 0.79 indicates Negative momentum. The RSI at 62.79 is Neutral, neither overbought nor oversold. The STOCH value of 90.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KR.

Kroger Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WMK	77 Outperform	$2.09B	19.01	7.80%	1.75%	2.00%	5.89%
SFM	77 Outperform	$14.24B	38.69	30.81%	―	12.90%	50.20%
ACI	76 Outperform	$12.73B	12.35	35.20%	2.32%	0.97%	-24.43%
KR	73 Outperform	$44.40B	18.29	26.59%	1.86%	-1.94%	23.94%
Sector *	62 Neutral	$20.22B	13.99	-16.14%	3.22%	1.15%	3.41%
IMKTA	61 Neutral	$1.15B	14.99	5.15%	1.06%	-7.38%	-57.42%
GO	57 Neutral	$1.33B	34.49	3.27%	―	10.13%	-50.29%

Kroger Company Corporate Events

Kroger Appoints Ronald Sargent as Interim CEO

On March 2, 2025, Kroger Company’s Board of Directors appointed Ronald Sargent as interim Chief Executive Officer and Chairman of the Board. In his interim role, Mr. Sargent will receive an annual base salary of $4,350,000 and a grant of 60,515 shares of restricted stock, which will vest one year from the award date.

Kroger Announces CEO Resignation Amidst Investigation

Kroger has announced the resignation of its CEO, Rodney McMullen, following a Board investigation into his personal conduct, which was found to be inconsistent with the company’s ethics policy. Ronald Sargent has been appointed as the interim CEO and Chairman of the Board, while Mark Sutton will serve as the lead independent director. The company expects its full-year sales and earnings to exceed the high end of its guidance range, indicating strong financial performance despite the leadership transition.

Kroger Company Appoints New Chief Financial Officer

On February 12, 2025, Kroger Co. announced the appointment of David Kennerley as the new Senior Vice President and Chief Financial Officer, effective April 3, 2025. Kennerley, who has a long history with PepsiCo, will join Kroger on March 10, 2025, to ensure a smooth transition alongside Todd Foley, the interim CFO. This strategic leadership change reflects Kroger’s commitment to maintaining its market strategy of providing fresh, affordable food while fostering long-term shareholder value.