KROGER CO
For the period ended Nov 8, 2025. Filed Dec 12, 2025.
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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.
Nov 8, 2025 · Filed Dec 12, 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 2025-08-16; filed 2025-09-19.
0001104659-25-091648
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-11-08; filed 2025-12-12.
0001104659-25-120642
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 104 previous paragraphs and 105 current paragraphs.
43 unchanged; 50 reworded; 12 added; 9 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 68 previous and 71 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 (12)
Current report
We believe this will beachievedby:
Current report
Kroger delivered another quarter of strong results by consistently driving our strategic priorities. We continued to focus on serving our customers, running and supporting our stores and strengthening our core business. We are pleased with the continued momentum, with strong performance from eCommerce and pharmacy. We expect the outcome from our strategic review will make our eCommerce business profitable in 2026. We continue to sharpen our focus on cost structure and see opportunities to unlock additional cost savings. We are executing with greater speed and discipline and are simplifying the Company.
Current report
Net earnings (loss) for the third quarter of 2025 include the following, which we define as the “2025 Third Quarter Adjusted Items”:
Current report
Net earnings for the first three quarters of 2024 include the following, which we define as the “2024 Adjusted Items”:
Current report
Net earnings for the third quarter of 2024 include the following, which we define as the “2024 Third Quarter Adjusted Items”:
Current report
Excluding the effect of fuel, Kroger Specialty Pharmacy, the 2025 Third Quarter OG&A Adjusted Items and the 2024 Third Quarter OG&A Adjusted Item, our OG&A rate increased 9 basis points in the third quarter of 2025, compared to the third quarter of 2024. In addition to the recurring multi-employer pension contributions we make in the normal course of business, in the third quarter of 2025, we made an accelerated contribution of $24 million, $18 million net of tax, to multi-employer pension plans, helping stabilize future associate benefits and allowing us to pre-fund future requirements. This accelerated multi-employer pension contribution drove an 8 basis point increase in our OG&A rate, excluding fuel and Adjusted Items, in the third quarter of 2025, compared to the third quarter of 2024.
Current report
Operating Profit (Loss) and FIFO Operating Profit (Loss)
Current report
Operating Profit (Loss) excluding the Adjusted Items
Current report
Net Earnings (Loss) and Net Earnings (Loss) Per Diluted Share
Current report
We generated $4.7 billion of cash from operations in the first three quarters of 2025 compared to $4.4 billion in the first three quarters of 2024. The change in net earnings including noncontrolling interests is discussed in the Results of Operations section. Other significant items affecting net cash provided by operating activities include the following:
Current report
Cash provided (used) by financing activities was $(1.6) billion in the first three quarters of 2025, compared to $9.5 billion in the first three quarters of 2024. The amount of cash used by financing activities decreased in the first three quarters of 2025, compared to the first three quarters of 2024, primarily due to decreased proceeds from the issuance of long-term debt and an increase in treasury stock purchases.
Current report
For the first three quarters of 2025, we invested $947 million to repurchase 14.0 million Kroger common shares at an average price of $67.47 per share, which includes excise tax related to the shares repurchased. In addition, the final delivery under the ASR agreement occurred during the third quarter of 2025, which included the settlement of 10.0 million Kroger common shares. The shares repurchased in the first three quarters of 2025 were reacquired under the December 2024 Repurchase Program and the 1999 Repurchase Program.
Removed paragraphs (9)
Previous report
This will beachievedby:
Previous 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.
Previous report
Net earnings for the second quarter of 2025 include the following, which we define as the “2025 Second Quarter Adjusted Items”:
Previous report
Net earnings for the first two quarters of 2024 include the following, which we define as the “2024 Adjusted Items”:
Previous report
Net earnings for the second quarter of 2024 include the following, which we define as the “2024 Second Quarter Adjusted Items”:
Previous 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.
Previous report
Operating Profit and FIFO Operating Profit
Previous report
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 report
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.
Reworded paragraphs (50)
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,” 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.
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,” “continue,” “could,” “creating,” “drive,” “enable,” “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
Statements elsewhere in this report and below regarding our expectations, projections, beliefs, intentions or strategies are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. While we believe that the statements are accurate, uncertainties about the general economy, our labor relations, our ability to execute our plans on a timely basis and other uncertainties described in this report and other reports that we file with the Securities and Exchange Commission could cause actual results to differ materially. We assume no obligation to update the information contained in this report unless required by applicable law.
Current wording
Statements elsewhere in this Form 10-Q and below regarding our expectations, projections, beliefs, intentions or strategies are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). While we believe that the statements are accurate, uncertainties about the general economy, our labor relations, our ability to execute our plans on a timely basis and other uncertainties described in this report and other reports that we file with the Securities and Exchange Commission (“SEC”) could cause actual results to differ materially. We assume no obligation to update the information contained in this report unless required by applicable law.
Previous 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.
Current wording
We 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 second quarter and first two quarters of 2025 are:
Current wording
Notable items for the third quarter and first three quarters of 2025 are:
Previous wording
The accompanying Consolidated Financial Statements, including the related notes, are presented in accordance with generally accepted accounting principles (“GAAP”). We provide non-GAAP measures, including First-In, First-Out (“FIFO”) gross margin, FIFO operating profit, adjusted FIFO operating profit, adjusted net earnings and adjusted net earnings per diluted share because management believes these metrics are useful to investors and analysts. These non- GAAP financial measures should not be considered as an alternative to gross margin, operating profit, net earnings and net earnings per diluted share or any other GAAP measure of performance. These measures should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP.
Current wording
The accompanying Consolidated Financial Statements, including the related notes, are presented in accordance with generally accepted accounting principles (“GAAP”). We provide non-GAAP measures, including FIFO gross margin, FIFO operating profit (loss), adjusted FIFO operating profit, adjusted net earnings and adjusted net earnings per diluted share because management believes these metrics are useful to investors and analysts. These non-GAAP financial measures should not be considered as an alternative to gross margin, operating profit (loss), net earnings (loss) and net earnings (loss) per diluted share or any other GAAP measure of performance. These measures should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP.
Previous wording
We calculate FIFO gross margin as FIFO gross profit divided by sales. FIFO gross profit is calculated as sales less merchandise costs, including advertising, warehousing and transportation expenses, but excluding the Last-In, First-Out (“LIFO”) charge, rent and depreciation and amortization. FIFO gross margin is an important measure used by management, and management believes FIFO gross margin is a useful metric to investors and analysts because it measures the merchandising and operational effectiveness of our go-to-market strategy.
Current wording
We calculate FIFO gross margin as FIFO gross profit divided by sales. FIFO gross profit is calculated as sales less merchandise costs, including advertising, warehousing and transportation expenses, but excluding the LIFO charge, rent and depreciation and amortization. FIFO gross margin is an important measure used by management, and management believes FIFO gross margin is a useful metric to investors and analysts because it measures the merchandising and operational effectiveness of our go-to-market strategy.
Previous wording
We calculate FIFO operating profit as operating profit excluding the LIFO charge. FIFO operating profit is an important measure used by management, and management believes FIFO operating profit is a useful metric to investors and analysts because it measures the operational effectiveness of our financial model.
Current wording
We calculate FIFO operating profit (loss) as operating profit (loss) excluding the LIFO charge. FIFO operating profit (loss) is an important measure used by management, and management believes FIFO operating profit (loss) is a useful metric to investors and analysts because it measures the operational effectiveness of our financial model.
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 two quarters 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 (loss), net earnings (loss) per diluted share and FIFO operating profit (loss) because adjusted items are not the result of our normal operations. Net earnings for the first three quarters of 2025 include the following, which we define as the “2025 Adjusted Items”:
Previous wording
Please refer to the “Net Earnings per Diluted Share excluding the Adjusted Items” table below for reconciliations of certain non-GAAP financial measures reported in this Quarterly Report on Form 10-Q to the most comparable GAAP financial measures and related disclosure.
Current wording
Please refer to the “Net Earnings per Diluted Share excluding the Adjusted Items” table below for reconciliations of certain non-GAAP financial measures reported in this Form 10-Q to the most directly comparable GAAP financial measures and related disclosure.
Previous wording
The following table provides a reconciliation of net earnings attributable to The Kroger Co. to adjusted net earnings attributable to The Kroger Co. and a reconciliation of net earnings attributable to The Kroger Co. per diluted common share to adjusted net earnings attributable to The Kroger Co. per diluted common share, excluding the 2025 and 2024 Adjusted Items:
Current wording
The following table provides a reconciliation of net earnings (loss) attributable to The Kroger Co. to adjusted net earnings attributable to The Kroger Co. and a reconciliation of net earnings (loss) attributable to The Kroger Co. per diluted common share to adjusted net earnings attributable to The Kroger Co. per diluted common share, excluding the 2025 and 2024 Adjusted Items:
Previous wording
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 wording
Total sales increased in the third quarter of 2025, compared to the third quarter of 2024, by 0.7%. 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 4.9% in the third quarter of 2025, compared to the third quarter of 2024, primarily due to a decrease in fuel gallons sold of 4.8%. Total sales, excluding fuel and Kroger Specialty Pharmacy, increased 2.6% in the third quarter of 2025, compared to the third quarter of 2024, which was primarily due to our identical sales increase, excluding fuel, of 2.6%. Identical sales, excluding fuel, for the third quarter of 2025, compared to the third quarter of 2024, increased primarily due to increased pharmacy and eCommerce sales and increased spend per item, partially offset by a reduction in the number of units sold.
Previous 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.
Current wording
Total sales increased in the first three quarters of 2025, compared to the first three quarters 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 9.6% in the first three quarters of 2025, compared to the first three quarters of 2024, primarily due to a decrease in the average retail fuel price of 6.4% and a decrease in fuel gallons sold of 3.5%. 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 3.4% in the first three quarters of 2025, compared to the first three quarters of 2024, which was primarily due to our identical sales increase, excluding fuel and the Labor Dispute, of 3.1%. Identical sales, excluding fuel and the Labor Dispute, for the first three quarters of 2025, compared to the first three 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 units sold.
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 second quarter and first two quarters 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 third quarter and first three quarters of 2025.
Previous wording
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 wording
Our gross margin rates, as a percentage of sales, were 22.8% in the third quarter of 2025 and 22.4% in the third quarter of 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower gross margin rate,Our Brands performance, lower shrink and lower supply chain costs, partially offset by increased pharmacy sales, which have a lower gross margin rate, increased promotional price investments and the LIFO charge.
Previous 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.
Current wording
Our gross margin rates, as a percentage of sales, were 22.8% in the first three quarters of 2025 and 22.1% in the first three 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 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 wording
Our LIFO charge was $44 million in the third quarter of 2025, compared to $4 million in the third quarter of 2024. Our LIFO charge was $146 million in the first three quarters of 2025, compared to $66 million in the first three quarters of 2024. The increase in the LIFO charge was due to our higher expected annualized product cost inflation for 2025, compared to 2024.
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, 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.
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 49 basis points in the third quarter of 2025, compared to the third quarter of 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower gross margin rate,Our Brands performance, 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 increased 24 basis points in the third quarter of 2025, compared to the third quarter of 2024.
Previous wording
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 wording
Excluding the effect of fuel and the Labor Dispute, our FIFO gross margin rate increased 58 basis points in the first three quarters of 2025, compared to the first three 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 18 basis points in the first three quarters of 2025, compared to the first three quarters of 2024.
Previous wording
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 wording
OG&A expenses, as a percentage of sales, were 25.0% in the third quarter of 2025 and 17.5% in the third quarter of 2024. The increase in the third quarter of 2025, compared to the third quarter of 2024, resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower OG&A rate to sales, the 2025 Third Quarter OG&A Adjusted Items, increased healthcare costs andplanned investment in associates, partially offset by the 2024 Third Quarter OG&A Adjusted Item, continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity, and decreased incentive plan costs.
Previous 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.
Current wording
OG&A expenses, as a percentage of sales, were 19.8% in the first three quarters of 2025 and 17.2% in the first three quarters of 2024. The increase in the first three quarters of 2025, compared to the first three 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 OG&A Adjusted Items, increased healthcare costs and increased multi-employer pension contributions, partially offset by the 2024 OG&A Adjusted Item 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 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.
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 Third Quarter OG&A Adjusted Items and the 2024 Third Quarter OG&A Adjusted Item, our OG&A rate increased 27 basis points in the third quarter of 2025, compared to the third 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, increased healthcare costs andplanned investment in associates, partially offset by continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity, and decreased incentive plan costs.
Previous wording
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 wording
Excluding the effect of fuel, the 2025 OG&A Adjusted Items, the Labor Dispute and the 2024 OG&A Adjusted Item, our OG&A rate increased 32 basis points in the first three quarters of 2025, compared to the first three 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, increased healthcare costs and increased multi-employer pension contributions, partially offset by continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity.
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 decreased 9 basis points in the first two quarters of 2025, compared to the first two quarters of 2024.
Current wording
Excluding the effect of fuel, Kroger Specialty Pharmacy, the 2025 OG&A Adjusted Items, the Labor Dispute and the 2024 OG&A Adjusted Item, our OG&A rate increased 2 basis points in the first three quarters of 2025, compared to the first three quarters of 2024.
Previous 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.
Current wording
Rent expense remained relatively consistent, as a percentage of sales, for the third quarter and first three quarters of 2025, compared to the same periods of 2024.
Previous 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.
Current wording
Depreciation and amortization expense increased, as a percentage of sales, in the third quarter and first three 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
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 wording
Operating profit (loss) was $(1.5) billion, or (4.55)% of sales, for the third quarter of 2025, compared to $828 million, or 2.46% of sales, for the third quarter of 2024. The results for the third quarter of 2025 include $2.6 billion of fulfillment network impairment and related charges. Operating profit, as a percentage of sales, decreased 701 basis points in the third quarter of 2025, compared to the third quarter of 2024, primarily due to increased OG&A, depreciation and amortization expenses and the LIFO charge, as a percentage of sales, partially offset by a higher FIFO gross margin rate.
Previous wording
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 wording
Operating profit was $644 million, or 0.57% of sales, for the first three quarters of 2025, compared to $2.9 billion, or 2.60% of sales, for the first three quarters of 2024. The results for the first three quarters of 2025 include $2.6 billion of fulfillment network impairment and related charges. Operating profit, as a percentage of sales, decreased 203 basis points in the first three quarters of 2025, compared to the first three quarters of 2024, primarily due to increased OG&A expenses, depreciation and amortization expenses and the LIFO charge, as a percentage of sales, partially offset by a higher FIFO gross margin rate.
Previous wording
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.
Current wording
FIFO operating profit (loss) was $(1.5) billion, or (4.42)% of sales, for the third quarter of 2025, compared to $832 million, or 2.47% of sales, for the third quarter of 2024. The results for the third quarter of 2025 include $2.6 billion of fulfillment network impairment and related charges. FIFO operating profit, as a percentage of sales, excluding the 2025 and 2024 Third Quarter Adjusted Items, increased 21 basis points in the third quarter of 2025, compared to the third 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.
Previous 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.
Current wording
FIFO operating profit was $790 million, or 0.70% of sales, for the first three quarters of 2025, compared to $3.0 billion, or 2.66% of sales, for the first three quarters of 2024. The results for the first three quarters of 2025 include $2.6 billion of fulfillment network impairment and related charges. FIFO operating profit, as a percentage of sales, excluding the 2025 and 2024 Adjusted Items, increased 17 basis points in the first three quarters of 2025, compared to the first three 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
Specific factors contributing to the trends driving operating profit and FIFO operating profit identified above are discussed earlier in this section.
Current wording
Specific factors contributing to the trends driving operating profit (loss) and FIFO operating profit (loss) identified above are discussed earlier in this section.
Previous wording
The following table provides a reconciliation of operating profit to FIFO operating profit, and to Adjusted FIFO operating profit, excluding the 2025 and 2024 Adjusted Items:
Current wording
The following table provides a reconciliation of operating profit (loss) to FIFO operating profit (loss), and to Adjusted FIFO operating profit, excluding the 2025 and 2024 Adjusted Items:
Previous 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.
Current wording
Net interest expense totaled $146 million in the third quarter of 2025, compared to $86 million in the third quarter of 2024. Net interest expense totaled $490 million in the first three quarters of 2025, compared to $294 million in the first three quarters of 2024. This increase resulted primarily from increased average total outstanding debt in the first three quarters of 2025, compared to the first three quarters of 2024, from the net proceeds of the senior notes issuance during the third quarter of 2024, and decreased interest income earned due to decreased balances of cash and temporary cash investments in the first three quarters of 2025, compared to the first three quarters of 2024, primarily due to the $5.0 billion we funded in 2024 under the accelerated share repurchase (“ASR”) transaction and the payment we made in 2024 to redeem $4.7 billion aggregate principal amount of the senior notes that included a special mandatory redemption feature following the termination of the merger with Albertsons.
Previous 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.
Current wording
The effective income tax rate was 26.5% for the third quarter of 2025 and 23.3% for the third quarter of 2024. The effective income tax rate was (94.0)% for the first three quarters of 2025 and 21.8% for the first three quarters of 2024. The effective income tax rate for the third quarter of 2025, which represents a tax benefit on a net loss before income tax expense, differed from the federal statutory rate due to a tax benefit related to classifying a certain subsidiary as held for sale and the utilization of tax credits and deductions, partially offset by the effect of state income taxes. The effective income tax rate for the first three quarters of 2025, which represents a tax benefit on net earnings before income tax expense, differed from the federal statutory rate due to a tax benefit related to classifying a certain subsidiary as held for sale and the utilization of tax credits and deductions including the benefit from share based payments, which includes $7 million for executive stock compensation for a former executive, partially offset by the effect of state income taxes. The effective income tax rate for the third 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 income tax rate for the first three 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
Our net earnings are based on the factors discussed in the Results of Operations section.
Current wording
Our net earnings (loss) are based on the factors discussed in the Results of Operations section.
Previous 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.
Current wording
Net earnings (loss) of $(2.02) per diluted share for the third quarter of 2025 represented a decrease compared to net earnings of $0.84 per diluted share for the third quarter of 2024. Excluding the 2025 and 2024 Third Quarter Adjusted Items, adjusted net earnings of $1.05 per diluted share for the third quarter of 2025 represented an increase of 7% compared to adjusted net earnings of $0.98 per diluted share for the third 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 an increased LIFO charge.
Previous wording
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.
Current wording
Net earnings of $0.23 per diluted share for the first three quarters of 2025 represented a decrease of 92% compared to net earnings of $2.77 per diluted share for the first three quarters of 2024. Excluding the 2025 and 2024 Adjusted Items, adjusted net earnings of $3.58 per diluted share for the first three quarters of 2025 represented an increase of 7% compared to adjusted net earnings of $3.34 per diluted share for the first three 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, decreased fuel earnings and an increased LIFO charge.
Previous wording
The following table summarizes our net increase in cash and temporary cash investments for the first two quarters of 2025 and 2024:
Current wording
The following table summarizes our net (decrease) increase in cash and temporary cash investments for the first three quarters of 2025 and 2024:
Previous 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.
Current wording
Cash paid for net interest increased in the first three quarters of 2025, compared to the first three quarters of 2024, primarily due to increased interest payments related to the $5.8 billion aggregate principal amount of senior notes issued in the third quarter of 2024 and not redeemed in the fourth quarter of 2024.
Previous 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.
Current wording
Investing activities used cash of $3.0 billion in the first three quarters of 2025, compared to $2.4 billion in the first three quarters of 2024. The amount of cash used by investing activities increased in the first three quarters of 2025, compared to the first three quarters of 2024, primarily due to a decrease in the proceeds from the sale of assets due to the sale of an equity investment and the sale of our Kroger Specialty Pharmacy business in the first three 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, partially offset by a decrease in payments for property and equipment, including payments for lease buyouts, in the first three quarters of 2025, compared to the first three quarters of 2024.
Previous 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.
Current wording
Capital investments, including changes in construction-in-progress payables and excluding the purchase of leased facilities, remained relatively consistent in the first three quarters of 2025, compared to the first three quarters of 2024, and totaled $2,863 million for the first three quarters of 2025, compared to $2,816 million for the first three quarters of 2024. During the rolling four quarter period ended with the third quarter of 2025, we opened, expanded, relocated or acquired 29 supermarkets and completed 199 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 third quarter of 2025 decreased 0.6% from the end of the third quarter of 2024. Excluding mergers, acquisitions and operational closings, total supermarket square footage at the end of the third quarter of 2025 increased 1.2% over the end of the third quarter of 2024.
Showing the first 40 of 50 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Operating Profit excluding the Adjusted Items
Previous report — wording carried elsewhere
Net Earnings and Net Earnings Per Diluted Share