Kroger Company (KR) AI Stock Analysis

• Market Cap: $39.50B
• Dividend Yield: 2.15%
• Average Volume (3M): 6.80M
• Price to Earnings (P/E): 57.2
• Beta (1Y): -0.03
• Revenue Growth: -1.77%
• EPS Growth: -70.83%
• Country: US
• Employees: 409,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Grocery Stores
• EPS (TTM): 1.05
• Shares Outstanding: 632,849,200
• 10 Day Avg. Volume: 7,042,910
• 30 Day Avg. Volume: 6,798,958
• PEG Ratio: 0.70
• Price to Book (P/B): 5.32
• Price to Sales (P/S): 0.30
• P/FCF Ratio: 24.80
• Enterprise Value/Market Cap: 1.61
• Enterprise Value/Revenue: 0.43
• Enterprise Value/Gross Profit: 1.91
• Enterprise Value/Ebitda: 12.05
• 1Y Price Target: $75.54
• Price Target Upside: 21.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: $65.00 ▲(4.35% Upside)

Kroger's overall stock score is driven by strong revenue growth and cash flow generation, but offset by challenges in profitability and high leverage. Technical analysis indicates bearish momentum, and valuation suggests overvaluation with a high P/E ratio. The earnings call highlights positive e-commerce growth and expansion plans, but also notes challenges such as fulfillment center closures and economic pressures.

Positive Factors

E-commerce Growth

Consistent e-commerce growth positions Kroger to capitalize on the increasing shift towards online grocery shopping, enhancing long-term revenue potential.

Expansion Plans

Expanding store footprint indicates strategic growth and increased market presence, potentially boosting sales and customer reach over time.

Cash Flow Generation

Strong cash flow generation enhances financial flexibility, allowing Kroger to invest in growth initiatives and manage debt effectively.

Negative Factors

High Leverage

Increased leverage raises financial risk, potentially limiting Kroger's ability to invest in growth and impacting long-term financial stability.

Profit Margin Decline

Declining profit margins suggest challenges in cost management and pricing power, potentially affecting long-term profitability.

Fulfillment Center Closures

Closure of fulfillment centers indicates operational challenges, potentially disrupting e-commerce efficiency and impacting future growth.

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

Kroger shows strong revenue growth and cash flow generation, but faces challenges with profitability and increased leverage. The income statement reflects stable gross profit margins but declining net profit margins. The balance sheet indicates high leverage with a rising debt-to-equity ratio, and cash flow shows significant improvement in free cash flow growth.

Income Statement

Kroger's income statement shows a stable gross profit margin around 22-23%, indicating consistent cost management. However, the net profit margin has decreased significantly in the TTM period to 0.54% from 1.81% in the previous year, reflecting challenges in maintaining profitability. Revenue growth in the TTM period is strong at 15.3%, but this follows a slight decline in the previous year, suggesting some volatility in sales performance. EBIT and EBITDA margins have also decreased, indicating pressure on operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 3.58 in the TTM period, up from 3.03 in the previous year, indicating increased leverage and potential financial risk. Return on equity has dropped to 9.42% from 32.17%, reflecting reduced profitability relative to shareholder equity. The equity ratio is not directly provided, but the high leverage suggests a lower proportion of equity financing.

Cash Flow

Kroger's cash flow statement shows a significant improvement in free cash flow growth at 162.7% in the TTM period, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 0.33, suggesting moderate efficiency in converting income to cash. The free cash flow to net income ratio is 0.37, reflecting a reasonable level of cash flow relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	147.22B	147.12B	150.04B	148.26B	137.89B	132.50B
Gross Profit	33.42B	33.40B	33.36B	31.78B	30.35B	30.90B
EBITDA	5.29B	7.64B	7.03B	7.02B	6.05B	7.29B
Net Income	789.00M	2.67B	2.16B	2.24B	1.66B	2.58B
Balance Sheet
Total Assets	51.44B	52.62B	50.51B	49.54B	49.09B	48.64B
Cash, Cash Equivalents and Short-Term Investments	5.07B	5.27B	3.10B	2.14B	2.90B	2.78B
Total Debt	25.20B	25.08B	19.25B	20.41B	20.44B	20.59B
Total Liabilities	44.40B	44.34B	38.90B	39.52B	39.66B	39.09B
Stockholders Equity	7.04B	8.29B	11.62B	10.04B	9.45B	9.58B
Cash Flow
Free Cash Flow	2.25B	1.78B	2.88B	1.23B	3.58B	3.95B
Operating Cash Flow	6.04B	5.79B	6.79B	4.31B	6.19B	6.82B
Investing Cash Flow	-3.84B	-3.23B	-3.75B	-3.02B	-2.61B	-2.81B
Financing Cash Flow	-11.62B	-490.00M	-2.17B	-2.29B	-3.44B	-2.71B

Kroger Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 62.29
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KR, the sentiment is Negative. The current price of 62.29 is below the 20-day moving average (MA) of 64.02, below the 50-day MA of 65.32, and below the 200-day MA of 67.42, indicating a bearish trend. The MACD of -0.89 indicates Positive momentum. The RSI at 42.15 is Neutral, neither overbought nor oversold. The STOCH value of 46.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KR.

Kroger Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IMKTA	72 Outperform	$1.33B	16.29	5.29%	0.92%	-5.42%	-20.80%
SFM	69 Neutral	$7.95B	15.54	36.96%	―	16.60%	49.76%
WMK	67 Neutral	$1.66B	17.71	7.22%	2.05%	3.11%	6.54%
ACI	64 Neutral	$9.57B	10.31	32.04%	3.44%	2.08%	-1.63%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
KR	56 Neutral	$39.50B	57.16	7.75%	2.15%	-1.77%	-70.83%
GO	52 Neutral	$981.37M	-211.13	-0.37%	―	7.22%	-108.99%

Kroger Company Corporate Events

Kroger Updates eCommerce Strategy Amid Fulfillment Closures

On November 18, 2025, Kroger announced updates to its eCommerce strategy, including the closure of certain fulfillment centers in the U.S., resulting in expected impairment charges of approximately $2.6 billion in the third fiscal quarter of 2025. Despite these closures, Kroger anticipates a $400 million improvement in eCommerce profitability by 2026, driven by expanded partnerships with Instacart, DoorDash, and Uber Eats, and a focus on enhancing customer experience and operating margins. The company’s hybrid eCommerce model aims to accelerate online growth and improve profitability, leveraging its store footprint and third-party delivery services.