Kroger Company (KR) AI Stock Analysis

• Market Cap: $46.38B
• Dividend Yield: 2.15%
• Average Volume (3M): 7.03M
• Price to Earnings (P/E): 40.3
• Beta (1Y): -0.12
• Revenue Growth: -1.77%
• EPS Growth: -70.83%
• Country: US
• Employees: 409,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Grocery Stores
• EPS (TTM): 1.28
• Shares Outstanding: 632,849,200
• 10 Day Avg. Volume: 8,352,203
• 30 Day Avg. Volume: 7,034,208
• PEG Ratio: -0.70
• Price to Book (P/B): 6.90
• Price to Sales (P/S): 0.28
• P/FCF Ratio: 12.23
• Enterprise Value/Market Cap: 1.47
• Enterprise Value/Revenue: 0.46
• Enterprise Value/Gross Profit: 2.07
• Enterprise Value/Ebitda: 12.43
• 1Y Price Target: $76.21
• Price Target Upside: 4.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 5.21
• Revenue Forecast (FY): $149.50B

• Rating: 62 Neutral
• Price Target: $79.00 ▲(7.81% Upside)
• Action: Reiterated Date: 03/07/26
• Date: Action: Reiterated 03/07/26

The score is led by strong technical momentum and solid cash-flow generation, but is held back by a weaker profitability trend and a highly levered balance sheet. A high P/E with only a modest dividend yield further limits upside, while the earnings call and CEO change add moderate support through an improving e-commerce outlook and strategic execution focus.

Positive Factors

Strong cash generation and FCF growth

Improving operating cash flow and a large free cash flow uplift provide durable internal funding for reinvestment, store expansion, and debt servicing. Strong FCF growth reduces reliance on external financing and supports long-term operational flexibility despite sector capital needs.

Rapid, sustainable e‑commerce progress

Consecutive double‑digit e‑commerce growth and targeted 2026 profitability imply the company is successfully scaling omnichannel capabilities. Platform profit contribution and improved fulfillment mix can structurally raise margins and broaden customer reach over the medium term.

Experienced CEO appointment

Bringing a leader with proven large‑scale retail and digital transformation experience increases likelihood of disciplined execution on omnichannel, store rollout, and productivity programs. Leadership continuity supports strategic credibility and organizational alignment.

Negative Factors

Elevated financial leverage

Very high leverage materially reduces financial flexibility and increases refinancing and interest risk if operating cash flow weakens. A thin equity base magnifies downside, constraining capacity to fund capex or absorb margin shocks without increasing leverage or cutting investment.

Weakened operating and net margins

Substantial margin compression in a low‑margin grocery model undermines durable profitability and return generation. Persistent pressure on operating margins signals cost, pricing, or mix issues that could erode cash conversion and make deleveraging and investment targets harder to achieve.

Operational execution risk in fulfillment

Shuttering automation sites highlights execution and capital allocation risks in scaling fulfillment. Reworking to a hybrid model may raise near‑term costs and delay fulfillment efficiency benefits, challenging the path to e‑commerce profitability and long‑term cost savings.

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 generates revenue primarily through the sale of groceries and other merchandise in its stores. The company's revenue model is based on a combination of food and non-food sales, with key revenue streams including fresh produce, meat, dairy, bakery items, and pharmacy sales. Kroger also earns income from its private label products, which have higher margins compared to national brands. Additionally, the company benefits from loyalty programs and promotional partnerships that drive customer engagement and repeat sales. Kroger's partnerships with technology companies for online and delivery services further enhance its revenue potential, tapping into the growing demand for e-commerce in the grocery sector.

Kroger Company Financial Statement Overview

Summary

Cash flow is a clear strength (improving operating cash flow and strong free cash flow growth), but the overall financial profile is dragged down by sharply weaker profitability (operating and net margin step-down) and elevated leverage (high debt with a reduced equity base and much higher debt-to-equity), which increases risk if margin pressure persists.

Income Statement

Revenue has been relatively stable over time, with a sharp rebound in the latest year (+28.3% YoY) after a slight decline in 2025. However, profitability weakened materially in the most recent period: net margin fell to ~0.7% (from ~1.8% in 2025) and operating margin dropped to ~1.3% (from ~2.6%), signaling notable cost/price pressure in a low-margin industry. Gross margin remains steady around ~21–23%, but the step-down in EBIT and net income points to higher operating expenses and/or other below-the-line headwinds.

Balance Sheet

Leverage is the key concern. Total debt remains high (~$24.7B) while equity has declined to ~$5.9B, driving debt-to-equity up to ~4.16x (vs ~1.66x in 2024), which reduces financial flexibility. Returns on equity appear healthy (~17% most recently), but that is partly influenced by the smaller equity base; the direction of equity erosion alongside elevated leverage increases risk if operating performance stays pressured.

Cash Flow

Cash generation is a relative bright spot. Operating cash flow improved to ~$7.2B and free cash flow rose to ~$3.35B, with very strong free cash flow growth (+49% YoY) after volatility in prior years. That said, free cash flow remains less than net income in the latest period (free cash flow to net income ~0.46x), suggesting working-capital swings and/or higher capital spending are still meaningful factors.

Breakdown	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	147.64B	147.12B	150.04B	148.26B	137.89B
Gross Profit	31.07B	33.40B	33.36B	31.78B	30.35B
EBITDA	5.81B	7.64B	7.03B	7.02B	6.05B
Net Income	1.02B	2.67B	2.16B	2.24B	1.66B
Balance Sheet
Total Assets	49.94B	52.62B	50.51B	49.62B	49.09B
Cash, Cash Equivalents and Short-Term Investments	4.58B	5.27B	3.10B	2.14B	2.90B
Total Debt	24.68B	25.08B	19.25B	20.41B	20.44B
Total Liabilities	44.01B	44.34B	38.90B	39.61B	39.66B
Stockholders Equity	5.94B	8.29B	11.62B	10.04B	9.45B
Cash Flow
Free Cash Flow	3.35B	1.78B	2.88B	1.23B	3.58B
Operating Cash Flow	7.21B	5.79B	6.79B	4.31B	6.19B
Investing Cash Flow	-3.91B	-3.23B	-3.75B	-3.02B	-2.61B
Financing Cash Flow	-3.98B	-490.00M	-2.17B	-2.29B	-3.44B

Kroger Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 73.28
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 73.28 is above the 20-day moving average (MA) of 70.83, above the 50-day MA of 66.80, and above the 200-day MA of 66.79, indicating a bullish trend. The MACD of 2.11 indicates Negative momentum. The RSI at 59.15 is Neutral, neither overbought nor oversold. The STOCH value of 62.74 is Neutral, 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
SFM	65 Neutral	$7.98B	15.05	38.21%	―	16.60%	49.76%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
KR	62 Neutral	$46.38B	40.33	13.04%	2.15%	-1.77%	-70.83%
ACI	61 Neutral	$8.88B	8.31	28.54%	3.49%	2.08%	-1.63%
IMKTA	60 Neutral	$1.57B	11.86	5.93%	0.93%	-5.42%	-20.80%
WMK	58 Neutral	$1.63B	17.84	6.83%	2.06%	3.11%	6.54%
GO	45 Neutral	$583.03M	-4.43	-19.78%	―	7.22%	-108.99%

Kroger Company Corporate Events

Kroger Appoints Greg Foran as New Chief Executive

On February 9, 2026, Kroger announced that its Board of Directors has appointed Greg Foran as chief executive officer, effective immediately, following a search for a leader capable of driving large-scale retail execution and growth. Foran, who also joins the board, succeeds Ron Sargent, who had served as interim CEO since March 2025 and will remain chairman to facilitate a smooth leadership transition.

Foran brings more than four decades of experience leading complex consumer-facing businesses, including a six-year tenure running Walmart U.S., where he oversaw a major turnaround, accelerated digital capabilities, and delivered 20 consecutive quarters of positive comparable sales. Most recently CEO of Air New Zealand until October 2025, he led the airline through pandemic disruption and a digital transformation, experience likely to bolster Kroger’s push in omnichannel retail and operational resilience while the company reaffirms its fiscal 2025 guidance and signals continuity in its long-term value strategy for customers, employees, and shareholders.

The most recent analyst rating on (KR) stock is a Hold with a $67.00 price target. To see the full list of analyst forecasts on Kroger Company stock, see the KR Stock Forecast page.