KROGER CO
For the period ended Aug 16, 2025. Filed Sep 19, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 16, 2025 · Filed Sep 19, 2025
KR$67.70-2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-05-24; filed 2025-06-27.
0001558370-25-008960
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-08-16; filed 2025-09-19.
0001104659-25-091648
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 92 previous paragraphs and 104 current paragraphs.
56 unchanged; 32 reworded; 13 added; 4 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 55 previous and 68 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Kroger delivered another quarter of strong results, which demonstrates the clear and measurable progress we’ve made on our priorities – to simplify our organization, to improve the customer experience and to focus on work that creates the most value. Sales growth has been strong, led by pharmacy, eCommerce and Fresh, and we are encouraged by the improvement in grocery volumes. We are executing better in our stores and we are more focused on our core business and our core customer. We are moving with speed and we are simplifying the company.
Current report
Net earnings for the second quarter of 2025 include the following, which we define as the “2025 Second Quarter Adjusted Items”:
Current report
Net earnings for the first two quarters of 2024 include the following, which we define as the “2024 Adjusted Items”:
Current report
Net earnings for the second quarter of 2024 include the following, which we define as the “2024 Second Quarter Adjusted Items”:
Current report
Net Earnings per Diluted Share excluding the Adjusted Items (continued)
Current report
Our gross margin rates, as a percentage of sales, were 22.5% in the second quarter of 2025 and 22.1% in the second quarter of 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower gross margin rate, lower shrink, lower supply chain costs and decreased fuel sales, which have a lower gross margin rate, partially offset by increased pharmacy sales, which have a lower gross margin rate, increased promotional price investments and the LIFO charge.
Current report
Our LIFO charge was $62 million in the second quarter of 2025, compared to $21 million in the second quarter of 2024. Our LIFO charge was $102 million in the first two quarters of 2025, compared to $62 million in the first two quarters of 2024. Our increased LIFO charge reflects our expected annualized product cost inflation for 2025, compared to 2024.
Current report
Excluding the effect of fuel and the Labor Dispute, our FIFO gross margin rate increased 62 basis points in the first two quarters of 2025, compared to the first two quarters of 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower gross margin rate, lower shrink and lower supply chain costs, partially offset by increased pharmacy sales, which have a lower gross margin rate, and increased promotional price investments. Excluding the effect of fuel, Kroger Specialty Pharmacy and the Labor Dispute, our FIFO gross margin rate increased 15 basis points in the first two quarters of 2025, compared to the first two quarters of 2024.
Current report
OG&A expenses, as a percentage of sales, were 17.6% in the second quarter of 2025 and 17.4% in the second quarter of 2024. The increase in the second quarter of 2025, compared to the second quarter of 2024, resulted primarily from the effect of decreased fuel sales, which increases our OG&A rate, as a percentage of sales, the sale of our Kroger Specialty Pharmacy business, which has a lower OG&A rate to sales, the 2025 Second Quarter OG&A Adjusted Items and increased incentive plan costs, partially offset by the 2024 Second Quarter OG&A Adjusted Item, continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity, and a favorable comparison to the second quarter of 2024, related to hurricane costs and general liability claims.
Current report
Excluding the effect of fuel, Kroger Specialty Pharmacy, the 2025 Second Quarter OG&A Adjusted Items and the 2024 Second Quarter OG&A Adjusted Item, our OG&A rate decreased 41 basis points in the second quarter of 2025, compared to the second quarter of 2024.
Current report
Operating profit was $863 million, or 2.54% of sales, for the second quarter of 2025, compared to $815 million, or 2.40% of sales, for the second quarter of 2024. Operating profit, as a percentage of sales, increased 14 basis points in the second quarter of 2025, compared to the second quarter of 2024, primarily due to a higher FIFO gross margin rate, partially offset by increased OG&A, depreciation and amortization expenses and the LIFO charge, as a percentage of sales.
Current report
Operating profit was $2.2 billion, or 2.76% of sales, for the first two quarters of 2025, compared to $2.1 billion, or 2.66% of sales, for the first two quarters of 2024. Operating profit, as a percentage of sales, increased 10 basis points in the first two quarters of 2025, compared to the first two quarters of 2024, primarily due to a higher FIFO gross margin rate, partially offset by increased OG&A, depreciation and amortization expenses and the LIFO charge, as a percentage of sales.
Current report
FIFO operating profit was $925 million, or 2.73% of sales, for the second quarter of 2025, compared to $836 million, or 2.47% of sales, for the second quarter of 2024. FIFO operating profit, as a percentage of sales, excluding the 2025 and 2024 Second Quarter Adjusted Items, increased 32 basis points in the second quarter of 2025, compared to the second quarter of 2024, primarily due to a higher FIFO gross margin rate, partially offset by increased OG&A and depreciation and amortization expenses, as a percentage of sales.
Removed paragraphs (4)
Previous report
($ in millions, except per share amounts)
Previous report
Net earnings for the first quarter of 2024 include the following, which we define as the “2024 Adjusted Items”:
Previous report
($ in millions, except per share amounts)
Previous report
Operating profit was $1.3 billion, or 2.93% of sales, for the first quarter of 2025, compared to $1.3 billion, or 2.86% of sales, for the first quarter of 2024. Operating profit, as a percentage of sales, increased 7 basis points in the first quarter of 2025, compared to the first quarter of 2024, primarily due to a higher FIFO gross margin rate, partially offset by increased OG&A and depreciation and amortization expenses, as a percentage of sales.
Reworded paragraphs (32)
Previous wording
This discussion and analysis contains certain forward-looking statements about our future performance. These statements are based on management’s assumptions and beliefs in light of the information currently available to it. Such statements are indicated by words such as “accelerate,” “achieve,” “affect,” “anticipate,” “believe,” “committed,” “confident,” “continue,” “could,” “drive,” “enable,” “ensure,” “estimate,” “expect,” “future,” “goals,” “initiatives,” “maintain,” “may,” “model,” “plan,” “position,” “strategy,” “target,” “trend,” “will,” and “would,” and similar words or phrases. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially. These include the specific risk factors identified in “Risk Factors” in our Annual Report on Form 10-K for our last fiscal year and any subsequent filings, as well as those identified in this Form 10-Q.
Current wording
This discussion and analysis contains certain forward-looking statements about our future performance. These statements are based on management’s assumptions and beliefs in light of the information currently available to it. Such statements are indicated by words such as “accelerate,” “achieve,” “affect,” “anticipate,” “believe,” “committed,” “confident,” “continue,” “could,” “drive,” “enable,” “ensure,” “estimate,” “expect,” “future,” “goals,” “initiatives,” “maintain,” “may,” “model,” “plan,” “position,” “strategy,” “target,” “trend,” and “will,” and similar words or phrases. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially. These include the specific risk factors identified in “Risk Factors” in our Annual Report on Form 10-K for our last fiscal year and any subsequent filings, as well as those identified in this Form 10-Q.
Previous wording
Kroger’s proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel retail business, including fuel and health and wellness. By executing on our go-to- market strategy built on the four pillars of Fresh,Our Brands, Personalization and eCommerce, we are creating a shopping experience that builds loyalty and grows sales. Our retail business generates traffic and data which accelerates growth in our high operating margin alternative profit businesses, like Kroger Precision Marketing. In turn, the value generated from these businesses enables us to reinvest back into our retail business.
Current wording
Kroger’s proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel retail business, including fuel and health and wellness. By executing on our go-to- market strategy built on the four pillars of Fresh,Our Brands, Personalization and eCommerce, we are creating a shopping experience that builds loyalty and grows sales. Our retail business generates traffic and data which accelerates growth in our high operating margin alternative profit businesses, like retail media. In turn, the value generated from these businesses enables us to reinvest back into our retail business.
Previous wording
We are focused on enhancing our pillars and delivering an exceptional customer experience to accelerate this flywheel effect. By expanding our store network and improving our eCommerce capabilities, we expect to grow households and increase sales. Our model provides more ways than ever to generate net earnings growth.
Current wording
We are focused on enhancing our pillars and delivering an exceptional customer experience to accelerate this flywheel effect. By expanding our store network and improving our eCommerce capabilities, we expect to grow households and increase sales. Our model provides various ways to generate net earnings growth.
Previous wording
Kroger delivered solid first quarter results, with strong sales led by pharmacy, eCommerce and Fresh. We made good progress in streamlining our priorities, enhancing customer focus and running great stores to improve the shopping experience. We’re off to a solid start in 2025 and we are optimistic about the rest of the year. Our commitment to driving growth in our core business and moving with speed positions us well for the future. We continue to believe that our strategy focusing on Fresh,Our Brands and eCommerce will continue to resonate with customers and our resilient model positions us well to navigate the current environment. We are focused on investing in projects that will maximize return on invested capital over time, while remaining committed to maintaining our current investment grade rating, growing our dividend, subject to board approval, and returning excess capital to shareholders. We are confident that by executing on these key priorities, we will generate long-term growth and attractive shareholder returns.
Current wording
We continue to believe that our strategy focusing on Fresh,Our Brands and eCommerce will continue to resonate with customers and our resilient model positions us well to navigate the current environment. We are focused on investments that will grow our core business and maximize return on invested capital over time, while remaining committed to maintaining our current investment grade rating, growing our dividend, subject to board approval, and returning excess capital to shareholders. We are confident that by executing on these key priorities, we will generate long-term growth and attractive shareholder returns.
Previous wording
Notable items for the first quarter of 2025 are:
Current wording
Notable items for the second quarter and first two quarters of 2025 are:
Previous wording
The adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit metrics are important measures used by management to compare the performance of core operating results between periods. We believe adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit are useful metrics to investors and analysts because they present more accurate year-over-year comparisons of our net earnings, net earnings per diluted share and FIFO operating profit because adjusted items are not the result of our normal operations. Net earnings for the first quarter of 2025 include the following, which we define as the “2025 Adjusted Items”:
Current wording
The adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit metrics are important measures used by management to compare the performance of core operating results between periods. We believe adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit are useful metrics to investors and analysts because they present more accurate year-over-year comparisons of our net earnings, net earnings per diluted share and FIFO operating profit because adjusted items are not the result of our normal operations. Net earnings for the first two quarters of 2025 include the following, which we define as the “2025 Adjusted Items”:
Previous wording
Total sales decreased in the first quarter of 2025, compared to the first quarter of 2024, by 0.3%. The decrease was primarily due to a decrease in supermarket fuel sales and the sale of Kroger Specialty Pharmacy, partially offset by an increase in total sales to retail customers without fuel. Total supermarket fuel sales decreased 12.5% in the first quarter of 2025, compared to the first quarter of 2024, primarily due to a decrease in the average retail fuel price of 10.1% and a decrease in fuel gallons sold of 2.7%. The decrease in the average retail fuel price was caused by a decrease in the product cost of fuel. Total sales, excluding fuel, Kroger Specialty Pharmacy and the Labor Dispute, increased 3.7% in the first quarter of 2025, compared to the first quarter of 2024, which was primarily due to our identical sales increase, excluding fuel and the Labor Dispute, of 3.2%. Identical sales, excluding fuel and the Labor Dispute, for the first quarter of 2025, compared to the first quarter of 2024, increased primarily due to increased pharmacy, eCommerce and Fresh sales and increased spend per item, partially offset by a reduction in the number of items in basket.
Current wording
Total sales decreased in the first two quarters of 2025, compared to the first two quarters of 2024, by 0.2%. The decrease was primarily due to a decrease in supermarket fuel sales and the sale of Kroger Specialty Pharmacy, partially offset by an increase in total sales to retail customers without fuel. Total supermarket fuel sales decreased 11.5% in the first two quarters of 2025, compared to the first two quarters of 2024, primarily due to a decrease in the average retail fuel price of 8.8% and a decrease in fuel gallons sold of 3.0%. The decrease in the average retail fuel price was caused by a decrease in the product cost of fuel. Total sales, excluding fuel, Kroger Specialty Pharmacy and the Labor Dispute, increased 3.7% in the first two quarters of 2025, compared to the first two quarters of 2024, which was primarily due to our identical sales increase, excluding fuel and the Labor Dispute, of 3.3%. Identical sales, excluding fuel and the Labor Dispute, for the first two quarters of 2025, compared to the first two quarters of 2024, increased primarily due to increased pharmacy, eCommerce and Fresh sales and increased spend per item, partially offset by a reduction in the number of items in basket.
Previous wording
We calculate identical sales, excluding fuel, as sales to retail customers, including sales from all departments at identical supermarket locations and Delivery and Ship solutions. We define a supermarket as identical when it has been in operation without expansion or relocation for five full quarters. We include Kroger Delivery sales from customer fulfillment centers in the identical sales calculation if the delivery occurs in an existing Kroger supermarket geography or when the location has been in operation for five full quarters. Although identical sales is a relatively standard term, numerous methods exist for calculating identical sales growth. As a result, the method used by our management to calculate identical sales may differ from methods other companies use to calculate identical sales. It is important to understand the methods used by other companies to calculate identical sales before comparing our identical sales to those of other such companies. Our identical sales results, excluding fuel, are summarized in the following tables. We used the identical sales, excluding fuel, dollar figures presented below to calculate percentage changes for the first quarter of 2025.
Current wording
We calculate identical sales, excluding fuel, as sales to retail customers, including sales from all departments at identical supermarket locations and Delivery and Ship solutions. We define a supermarket as identical when it has been in operation without expansion or relocation for five full quarters. We include Kroger Delivery sales from customer fulfillment centers in the identical sales calculation if the delivery occurs in an existing Kroger supermarket geography or when the location has been in operation for five full quarters. Although identical sales is a relatively standard term, numerous methods exist for calculating identical sales growth. As a result, the method used by our management to calculate identical sales may differ from methods other companies use to calculate identical sales. It is important to understand the methods used by other companies to calculate identical sales before comparing our identical sales to those of other such companies. Our identical sales results, excluding fuel, are summarized in the following tables. We used the identical sales, excluding fuel, dollar figures presented below to calculate percentage changes for the second quarter and first two quarters of 2025.
Previous wording
Our gross margin rates, as a percentage of sales, were 23.0% in the first quarter of 2025 and 22.0% in the first quarter of 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower gross margin rate, lower shrink, lower supply chain costs and decreased fuel sales, which have a lower gross margin rate, partially offset by increased pharmacy sales, which have a lower gross margin rate.
Current wording
Our gross margin rates, as a percentage of sales, were 22.8% in the first two quarters of 2025 and 22.0% in the first two quarters of 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower gross margin rate, lower shrink, lower supply chain costs and decreased fuel sales, which have a lower gross margin rate, partially offset by increased pharmacy sales, which have a lower gross margin rate, increased promotional price investments and the LIFO charge.
Previous wording
Our fuel sales lower our FIFO gross margin rate due to the very low FIFO gross margin rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel and the Labor Dispute, our FIFO gross margin rate increased 79 basis points in the first quarter of 2025, compared to the first quarter of 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower gross margin rate, lower shrink and lower supply chain costs, partially offset by increased pharmacy sales, which have a lower gross margin rate. Excluding the effect of fuel, Kroger Specialty Pharmacy and the Labor Dispute, our FIFO gross margin rate increased 33 basis points in the first quarter of 2025, compared to the first quarter of 2024.
Current wording
Our fuel sales lower our FIFO gross margin rate due to the very low FIFO gross margin rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel, our FIFO gross margin rate increased 39 basis points in the second quarter of 2025, compared to the second quarter of 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower gross margin rate, lower shrink and lower supply chain costs, partially offset by increased pharmacy sales, which have a lower gross margin rate, and increased promotional price investments. Excluding the effect of fuel and Kroger Specialty Pharmacy, our FIFO gross margin rate decreased 9 basis points in the second quarter of 2025, compared to the second quarter of 2024.
Previous wording
OG&A expenses, as a percentage of sales, were 17.6% in the first quarter of 2025 and 16.8% in the first quarter of 2024. The increase in the first quarter of 2025, compared to the first quarter of 2024, resulted primarily from the effect of decreased fuel sales, which increases our OG&A rate, as a percentage of sales, the sale of our Kroger Specialty Pharmacy business, which has a lower OG&A rate to sales, the 2025 Multi-Employer Pension Contributions, the 2025 OG&A Adjusted Items and increased healthcare costs, partially offset by the 2024 OG&A Adjusted Items and continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity.
Current wording
OG&A expenses, as a percentage of sales, were 17.6% in the first two quarters of 2025 and 17.0% in the first two quarters of 2024. The increase in the first two quarters of 2025, compared to the first two quarters of 2024, resulted primarily from the effect of decreased fuel sales, which increases our OG&A rate, as a percentage of sales, the sale of our Kroger Specialty Pharmacy business, which has a lower OG&A rate to sales, the 2025 Multi-Employer Pension Contributions, the 2025 OG&A Adjusted Items and increased healthcare costs, partially offset by the 2024 OG&A Adjusted Items and continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity.
Previous wording
Our fuel sales lower our OG&A rate, as a percentage of sales, due to the very low OG&A rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel, the 2025 OG&A Adjusted Items, the Labor Dispute and the 2024 OG&A Adjusted Items, our OG&A rate increased 63 basis points in the first quarter of 2025, compared to the first quarter of 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower OG&A rate to sales, the 2025 Multi-Employer Pension Contributions and increased healthcare costs, partially offset by continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity.
Current wording
Our fuel sales lower our OG&A rate, as a percentage of sales, due to the very low OG&A rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel, the 2025 Second Quarter OG&A Adjusted Items and the 2024 Second Quarter OG&A Adjusted Item, our OG&A rate decreased 5 basis points in the second quarter of 2025, compared to the second quarter of 2024. This decrease resulted primarily from continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity, and a favorable comparison to the second quarter of 2024, related to hurricane costs and general liability claims, partially offset by the sale of our Kroger Specialty Pharmacy business, which has a lower OG&A rate to sales, and increased incentive plan costs.
Previous wording
Excluding the effect of fuel, Kroger Specialty Pharmacy, the 2025 OG&A Adjusted Items, the Labor Dispute, the 2024 OG&A Adjusted Items and the 2025 Multi-Employer Pension Contributions, our OG&A rate was relatively flat in the first quarter of 2025, compared to the first quarter of 2024.
Current wording
Excluding the effect of fuel, Kroger Specialty Pharmacy, the 2025 OG&A Adjusted Items, the Labor Dispute, the 2024 OG&A Adjusted Items and the 2025 Multi-Employer Pension Contributions, our OG&A rate decreased 9 basis points in the first two quarters of 2025, compared to the first two quarters of 2024.
Previous wording
Rent expense remained relatively consistent, as a percentage of sales, for the first quarter of 2025, compared to the first quarter of 2024.
Current wording
Rent expense remained relatively consistent, as a percentage of sales, for the second quarter and first two quarters of 2025, compared to the same periods of 2024.
Previous wording
Depreciation and amortization expense increased, as a percentage of sales, in the first quarter of 2025, compared to the first quarter of 2024. This increase was primarily due to the sale of our Kroger Specialty Pharmacy business, which has a lower depreciation & amortization rate to sales, additional depreciation on capital investments, excluding mergers and lease buyouts, of $3.6 billion during the rolling four quarter period ending with the first quarter of 2025 and a decrease in the average useful life on these capital investments.
Current wording
Depreciation and amortization expense increased, as a percentage of sales, in the second quarter and first two quarters of 2025, compared to the same periods of 2024. This increase was primarily due to the sale of our Kroger Specialty Pharmacy business, which has a lower depreciation & amortization rate to sales.
Previous wording
FIFO operating profit was $1.4 billion, or 3.02% of sales, for the first quarter of 2025, compared to $1.3 billion, or 2.95% of sales, for the first quarter of 2024. FIFO operating profit, as a percentage of sales, excluding the 2025 and 2024 Adjusted Items, increased 3 basis points in the first quarter of 2025, compared to the first quarter of 2024, primarily due to a higher FIFO gross margin rate, partially offset by increased OG&A and depreciation and amortization expenses, as a percentage of sales.
Current wording
FIFO operating profit was $2.3 billion, or 2.89% of sales, for the first two quarters of 2025, compared to $2.2 billion, or 2.74% of sales, for the first two quarters of 2024. FIFO operating profit, as a percentage of sales, excluding the 2025 and 2024 Adjusted Items, increased 15 basis points in the first two quarters of 2025, compared to the first two quarters of 2024, primarily due to a higher FIFO gross margin rate, partially offset by increased OG&A and depreciation and amortization expenses, as a percentage of sales.
Previous wording
Net interest expense totaled $199 million in the first quarter of 2025, compared to $123 million in the first quarter of 2024. This increase resulted primarily from increased average total outstanding debt in the first quarter of 2025, compared to the first quarter of 2024, from the net proceeds of the senior notes issuance during the third quarter of 2024, partially offset by increased interest income earned due to increased balances of cash and temporary cash investments in the first quarter of 2025, compared to the first quarter of 2024.
Current wording
Net interest expense totaled $144 million in the second quarter of 2025, compared to $84 million in the second quarter of 2024. Net interest expense totaled $343 million in the first two quarters of 2025, compared to $207 million in the first two quarters of 2024. This increase resulted primarily from increased average total outstanding debt in the first two quarters of 2025, compared to the first two quarters of 2024, from the net proceeds of the senior notes issuance during the third quarter of 2024, partially offset by increased interest income earned due to increased balances of cash and temporary cash investments in the first two quarters of 2025, compared to the first two quarters of 2024.
Previous wording
The effective income tax rate was 21.3% for the first quarter of 2025 and 19.8% for the first quarter of 2024. The effective income tax rate for the first quarter of 2025 differed from the federal statutory rate due to the effect of state income taxes, partially offset by the utilization of tax credits and deductions including the benefit from share-based payments, which includes the 2025 Income Tax Expense Adjusted Item. The effective income tax rate for the first quarter of 2024 differed from the federal statutory rate due to a tax benefit related to classifying Kroger Specialty Pharmacy as held for sale and the utilization of tax credits and deductions, partially offset by the effect of state income taxes.
Current wording
The effective income tax rate was 21.0% for the second quarter of 2025 and 24.1% for the second quarter of 2024. The effective income tax rate was 21.2% for the first two quarters of 2025 and the first two quarters of 2024. The effective income tax rate for the second quarter of 2025 equaled the federal statutory rate due to the effect of state income taxes being fully offset by the utilization of tax credits and deductions including the benefit from share-based payments. The effective income tax rate for the first two quarters of 2025 differed from the federal statutory rate due to the effect of state income taxes, partially offset by the utilization of tax credits and deductions including the benefit from share-based payments, which includes the 2025 Income Tax Expense Adjusted Item. The effective income tax rate for the second quarter of 2024 differed from the federal statutory rate due to the effect of state income taxes, partially offset by the utilization of tax credits and deductions. The effective tax rate for the first two quarters of 2024 differed from the federal statutory rate due to the effect of state income taxes, partially offset by a tax benefit related to classifying Kroger Specialty Pharmacy as held for sale and the utilization of tax credits and deductions.
Previous wording
Net earnings of $1.29 per diluted share for the first quarter of 2025 was consistent with net earnings of $1.29 per diluted share for the first quarter of 2024. Excluding the 2025 and 2024 Adjusted Items, adjusted net earnings of $1.49 per diluted share for the first quarter of 2025 represented an increase of 4.2% compared to adjusted net earnings of $1.43 per diluted share for the first quarter of 2024. The increase in adjusted net earnings per diluted share resulted primarily from increased adjusted FIFO operating profit, lower income tax expense and lower common shares outstanding, partially offset by increased net interest expense.
Current wording
Net earnings of $0.91 per diluted share for the second quarter of 2025 represented an increase of 42% compared to net earnings of $0.64 per diluted share for the second quarter of 2024. Excluding the 2025 and 2024 Second Quarter Adjusted Items, adjusted net earnings of $1.04 per diluted share for the second quarter of 2025 represented an increase of 12% compared to adjusted net earnings of $0.93 per diluted share for the second quarter of 2024. The increase in adjusted net earnings per diluted share resulted primarily from increased adjusted FIFO operating profit, excluding fuel, lower income tax expense and lower common shares outstanding, partially offset by increased net interest expense and decreased fuel earnings.
Previous wording
The following table summarizes our net increase in cash and temporary cash investments for the first quarter of 2025 and 2024:
Current wording
The following table summarizes our net increase in cash and temporary cash investments for the first two quarters of 2025 and 2024:
Previous wording
We generated $2.1 billion of cash from operations in the first quarter of 2025 compared to $2.3 billion in the first quarter of 2024. The decrease in cash generated from operations was primarily due to the following:
Current wording
We generated $3.7 billion of cash from operations in the first two quarters of 2025 compared to $3.5 billion in the first two quarters of 2024. The increase in cash generated from operations was primarily due to the following:
Previous wording
Cash paid for interest increased in the first quarter of 2025, compared to the first quarter of 2024, primarily due to increased interest payments related to the $5.8 billion of senior notes issued in the third quarter of 2024 and not redeemed in the fourth quarter of 2024. Cash paid for taxes increased in the first quarter of 2025, compared to the first quarter of 2024, primarily due to applying a 2023 tax overpayment to reduce our estimated tax payments in 2024.
Current wording
Cash paid for interest increased in the first two quarters of 2025, compared to the first two quarters of 2024, primarily due to increased interest payments related to the $5.8 billion of senior notes issued in the third quarter of 2024 and not redeemed in the fourth quarter of 2024. Cash paid for taxes increased in the first two quarters of 2025, compared to the first two quarters of 2024, primarily due to applying a 2023 tax overpayment to reduce our estimated tax payments in 2024.
Previous wording
Investing activities used cash of $1.0 billion in both the first quarters of 2025 and 2024. The amount of cash used by investing activities remained consistent in the first quarter of 2025, compared to the first quarter of 2024, primarily due to a decrease in the proceeds from the sale of assets due to the sale of an equity method investment in the first quarter of 2024, which was offset by a decrease in payments for property and equipment, including payments for lease buyouts, in the first quarter of 2025, compared to the first quarter of 2024.
Current wording
Investing activities used cash of $2.1 billion in the first two quarters of 2025 compared to $1.9 billion in the first two quarters of 2024. The amount of cash used by investing activities increased in the first two quarters of 2025, compared to the first two quarters of 2024, primarily due to a decrease in the proceeds from the sale of assets due to the sale of an equity method investment in the first two quarters of 2024, partially offset by a decrease in payments for property and equipment, including payments for lease buyouts, in the first two quarters of 2025, compared to the first two quarters of 2024 and the letter of credit drawdown by Ocado in the second quarter of 2025 under the Amended and Restated Partnership Framework Agreement.
Previous wording
The cash used for financing activities of $331 million in the first quarter of 2025 was consistent with the cash used for financing activities of $348 million in the first quarter of 2024.
Current wording
The cash used for financing activities of $657 million in the first two quarters of 2025 was consistent with the cash used for financing activities of $642 million in the first two quarters of 2024.
Previous wording
Capital investments, including changes in construction-in-progress payables and excluding the purchase of leased facilities, totaled $1.2 billion for both the first quarters of 2025 and 2024. During the rolling four quarter period ended with the first quarter of 2025, we opened, expanded, relocated or acquired 27 supermarkets and completed 210 remodels. We define a remodel as a project that is greater than or equal to a cost of $8 per square foot. Total supermarket square footage at the end of the first quarter of 2025 increased 0.9% from the end of the first quarter of 2024. Excluding mergers, acquisitions and operational closings, total supermarket square footage at the end of the first quarter of 2025 increased 1.1% over the end of the first quarter of 2024.
Current wording
Capital investments, including changes in construction-in-progress payables and excluding the purchase of leased facilities, remained relatively consistent in the first two quarters of 2025, compared to the first two quarters of 2024, and totaled $2,030 million for the first two quarters of 2025, compared to $2,076 million for the first two quarters of 2024. During the rolling four quarter period ended with the second quarter of 2025, we opened, expanded, relocated or acquired 25 supermarkets and completed 203 remodels. We define a remodel as a project that is greater than or equal to a cost of $8 per square foot. Total supermarket square footage at the end of the second quarter of 2025 increased 0.3% from the end of the second quarter of 2024. Excluding mergers, acquisitions and operational closings, total supermarket square footage at the end of the second quarter of 2025 increased 1.1% over the end of the second quarter of 2024.
Previous wording
As of May 24, 2025, we maintained a $2.75 billion (with the ability to increase by $2.0 billion), unsecured revolving credit facility that, unless extended, terminates on September 13, 2029. Outstanding borrowings under the credit facility, commercial paper borrowings and some outstanding letters of credit reduce funds available under the credit facility. As of May 24, 2025, we had no outstanding commercial paper and no borrowings under our revolving credit facility. The outstanding letters of credit that reduce funds available under our credit facility totaled $1 million as of May 24, 2025.
Current wording
As of August 16, 2025, we maintained a $2.75 billion (with the ability to increase by $2.0 billion), unsecured revolving credit facility that, unless extended, terminates on September 13, 2029. Outstanding borrowings under the credit facility, commercial paper borrowings and some outstanding letters of credit reduce funds available under the credit facility. As of August 16, 2025, we had no outstanding commercial paper and no borrowings under our revolving credit facility. The outstanding letters of credit that reduce funds available under our credit facility totaled $2 million as of August 16, 2025.
Previous wording
Total debt, including both the current and long-term portions of obligations under finance leases, of $17.9 billion as of May 24, 2025, remained consistent to our fiscal year end 2024 debt of $17.9 billion. During the first quarter of 2025, we did not have any payments or issuances of senior notes or borrowings or payments that occurred on our revolving credit facility.
Current wording
Total debt, including both the current and long-term portions of obligations under finance leases, increased $54 million as of August 16, 2025, compared to our fiscal year end 2024 debt of $17.9 billion due to a net increase in obligations under finance leases and property transactions. During the first two quarters of 2025, we did not have any payments or issuances of senior notes or borrowings or payments that occurred on our revolving credit facility.
Previous wording
During the first quarter of 2025, we invested $181 million to repurchase 2.7 million Kroger common shares at an average price of $67.82 per share. The shares repurchased in the first quarter of 2025 were reacquired under a share repurchase program announced on December 6, 1999 to repurchase common shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith (“1999 Repurchase Program”).
Current wording
For the first two quarters of 2025, we invested $203 million to repurchase 3.0 million Kroger common shares at an average price of $68.21 per share. The shares repurchased in the first two quarters of 2025 were reacquired under a share repurchase program announced on December 6, 1999 to repurchase common shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith (“1999 Repurchase Program”).
Previous wording
On December 11, 2024, our Board of Directors approved a $7.5 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, including ASR transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “December 2024 Repurchase Program”).
Current wording
On December 11, 2024, our Board of Directors approved a $7.5 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, including accelerated share repurchase (“ASR”) transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “December 2024 Repurchase Program”).
Previous wording
On December 19, 2024, we entered into an ASR agreement with two financial institutions to reacquire, in aggregate, $5.0 billion in shares of Kroger common stock. The ASR agreement will be completed under the December 2024 Repurchase Program. During 2024, we funded $5.0 billion and received a $4.0 billion initial delivery of approximately 65.6 million Kroger common shares at an average price of $61.54 per share, which includes excise taxes related to the shares repurchased. The total number of shares purchased by the Company pursuant to the ASR agreement will be based on the average of the volume-weighted average prices of Kroger common shares on specified dates during the term of each ASR agreement, less a discount, and subject to adjustments pursuant to the terms and conditions of the ASR agreement. Final settlement under the ASR agreement is expected to occur no later than the third fiscal quarter of our Fiscal 2025.
Current wording
On December 19, 2024, we entered into an ASR agreement with two financial institutions to reacquire, in aggregate, $5.0 billion in shares of Kroger common stock. The ASR agreement will be completed under the December 2024 Repurchase Program. During 2024, we funded $5.0 billion and received a $4.0 billion initial delivery of approximately 65.6 million Kroger common shares at an average price of $61.54 per share, which includes excise taxes related to the shares repurchased. The total number of shares purchased by the Company pursuant to the ASR agreement will be based on the average of the volume-weighted average prices of Kroger common shares on specified dates during the term of each ASR agreement, less a discount, and subject to adjustments pursuant to the terms and conditions of the ASR agreement. Final settlement under the ASR agreement is expected to occur in the third quarter of 2025.
Previous wording
We held cash and temporary cash investments of $4.7 billion as of May 24, 2025, which reflects our elevated operating performance over the last few years. We actively manage our cash and temporary cash investments in order to internally fund operating activities, support and invest in our core businesses, make scheduled interest and principal payments on our borrowings and return cash to shareholders through cash dividend payments and share repurchases. Our current levels of cash, borrowing capacity and balance sheet leverage provide us with the operational flexibility to adjust to changes in economic and market conditions. We remain committed to our dividend, and growing our dividend over time, subject to Board approval, as well as share repurchase programs and we will evaluate the optimal use of any excess free cash flow, consistent with our capital allocation strategy.
Current wording
We held cash and temporary cash investments of $4.9 billion as of August 16, 2025. We actively manage our cash and temporary cash investments in order to internally fund operating activities, support and invest in our core businesses, make scheduled interest and principal payments on our borrowings and return cash to shareholders through cash dividend payments and share repurchases. Our current levels of cash, borrowing capacity and balance sheet leverage provide us with the operational flexibility to adjust to changes in economic and market conditions. We remain committed to our dividend, and growing our dividend over time, subject to Board approval, as well as share repurchase programs and we will evaluate the optimal use of any excess free cash flow, consistent with our capital allocation strategy.
Previous wording
For additional information about our debt activity in the first quarter of 2025, see Note 2 to the Consolidated Financial Statements.
Current wording
For additional information about our debt activity in the first two quarters of 2025, see Note 2 to the Consolidated Financial Statements.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Total sales increased in the second quarter of 2025, compared to the second quarter of 2024, by 0.1%. The increase was primarily due to an increase in total sales to retail customers without fuel, partially offset by a decrease in supermarket fuel sales and the sale of Kroger Specialty Pharmacy. Total supermarket fuel sales decreased 10.1% in the second quarter of 2025, compared to the second quarter of 2024, primarily due to a decrease in the average retail fuel price of 7.0% and a decrease in fuel gallons sold of 3.3%. The decrease in the average retail fuel price was caused by a decrease in the product cost of fuel. Total sales, excluding fuel and Kroger Specialty Pharmacy, increased 3.8% in the second quarter of 2025, compared to the second quarter of 2024, which was primarily due to our identical sales increase, excluding fuel, of 3.4%. Identical sales, excluding fuel, for the second quarter of 2025, compared to the second quarter of 2024, increased primarily due to increased pharmacy, eCommerce and Fresh sales and increased spend per item, partially offset by a reduction in the number of items in basket.
Current report — wording carried from elsewhere
Excluding the effect of fuel, the 2025 OG&A Adjusted Items, the Labor Dispute and the 2024 OG&A Adjusted Items, our OG&A rate increased 34 basis points in the first two quarters of 2025, compared to the first two quarters of 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower OG&A rate to sales, the 2025 Multi-Employer Pension Contributions and increased healthcare costs, partially offset by continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity.
Current report — wording carried from elsewhere
Net earnings of $2.20 per diluted share for the first two quarters of 2025 represented an increase of 14% compared to net earnings of $1.93 per diluted share for the first two quarters of 2024. Excluding the 2025 and 2024 Adjusted Items, adjusted net earnings of $2.53 per diluted share for the first two quarters of 2025 represented an increase of 7% compared to adjusted net earnings of $2.36 per diluted share for the first two quarters of 2024. The increase in adjusted net earnings per diluted share resulted primarily from increased adjusted FIFO operating profit, excluding fuel, lower income tax expense and lower common shares outstanding, partially offset by increased net interest expense and decreased fuel earnings.