Kroger Co. (NYSE: KR) has reported its financial results for the fourth quarter and full-year 2025, along with guidance for 2026. The company's identical sales without fuel saw a 2.4% increase in the fourth quarter, and a 2.9% increase for the full fiscal year 2025. Adjusted FIFO operating profit for the fourth quarter was $1,206 million, with an adjusted EPS of $1.28, representing an increase from the previous year. For the full fiscal year 2025, adjusted FIFO operating profit was $4.9 billion, and adjusted EPS was $4.85. The company also reported an increase in adjusted eCommerce sales by 20% in the fourth quarter.
In terms of financial performance, Kroger's gross margin was 23.1% for the fourth quarter, compared to 22.7% for the same period the previous year. The FIFO gross margin rate remained unchanged. For the full fiscal year 2025, the gross margin was 22.9%, compared to 22.3% in the previous year. The FIFO gross margin rate saw an increase of 44 basis points. Additionally, the operating, general, and administrative rate increased by 21 basis points in the fourth quarter, and by 29 basis points for the full fiscal year 2025.
Kroger's capital allocation strategy includes a $5 billion accelerated share repurchase program and an additional $2 billion share repurchase authorization, with the aim of driving long-term sustainable net earnings growth. The company's net total debt to adjusted EBITDA ratio is 1.76, compared to 1.79 a year ago.
Looking ahead, Kroger's guidance for full-year 2026 includes expectations of identical sales without fuel growth of 1.0% to 2.0%, adjusted FIFO operating profit of $5.0 to $5.2 billion, and adjusted EPS of $5.10 to $5.30. The company's guidance also accounts for an approximately 130 basis point headwind from the inflation reduction act.
As a result of these announcements, the company's shares have moved 1.12% on the market, and are now trading at a price of $63.19. For more information, read the company's full 8-K submission here.
