The Kroger 2026 Q1 Earnings Stable EPS Despite Net Income Decline

The Kroger (KR) reported its fiscal 2026 Q1 earnings on Jun 27th, 2025. The company saw a slight decline in revenue, falling by 0.3% to $45.12 billion compared to the same period last year. Kroger's Q1 EPS remained stable at $1.30, aligning with expectations. The company did not make any changes to its full-year guidance, maintaining its earnings outlook. Despite the challenging macroeconomic conditions, Kroger's performance reflects a commitment to operational resilience and sustained profitability.

Revenue

Earnings/Net Income
The Kroger maintained stable EPS at $1.30 in 2026 Q1 compared to 2025 Q1. Meanwhile, the company's net income declined to $868 million in 2026 Q1, down 9.2% from $956 million reported in 2025 Q1. Remarkably, the company has sustained profitability for more than 20 years over the corresponding fiscal quarter, underscoring strong operational resilience. The EPS stability indicates a solid financial footing amidst challenging conditions.

Price Action

Post-Earnings Price Action Review
The strategy of buying KR when revenues beat expectations and holding for 30 days shows promise based on the following analysis: Kroger's recent revenue growth rate of approximately 31.51% as of April 30, 2025, surpasses industry averages, indicating strong sales performance and potential for price appreciation. The company's decision to increase its quarterly dividend by 9% reflects confidence in long-term prospects and commitment to shareholder value, attracting income-focused investors. With a forward 12-month price-to-sales ratio of 0.31X, lower than the industry average of 1.06X, Kroger's stock appears undervalued, offering a buying opportunity for those believing in its growth potential. Insider confidence is evident, with significant transactions by insiders like Gabriel Arreaga and Yael Cosset, signaling optimism about the company's future. Holding KR for 30 days may allow investors to capture potential short-term gains from positive revenue momentum and dividend increase announcements, though monitoring market dynamics remains essential.

CEO Commentary
Ronald Sargent, Interim Chief Executive Officer and Chairman of the Board, noted that Kroger is less affected by the proposed tariffs compared to some competitors due to the nature of its product offerings. The company is actively collaborating with suppliers to source products from regions less impacted by tariffs. Sargent emphasized that price increases are a last resort, highlighting Kroger's commitment to providing value to customers, especially during challenging times.

Guidance
Kroger emphasized a proactive approach to managing potential tariff impacts, indicating a commitment to avoid passing costs to consumers unless absolutely necessary. The leadership is focused on maintaining competitive pricing and sourcing strategies, ensuring that customer value remains a priority as the company navigates the evolving market conditions.

Additional News
Kroger has announced plans to close approximately 60 underperforming stores over the next 18 months to improve efficiency, while also aiming to open at least 30 new stores this year, focusing on high-growth geographies in the following year. This decision comes amidst ongoing labor unrest, including strikes at King Soopers locations in Colorado and picketing at Ralphs in Southern California. In leadership news, Kroger is actively searching for a new CEO following the resignation of Rodney McMullen in March after an investigation into personal conduct. Additionally, the company is moving forward with a $5 billion accelerated share repurchase program, expected to be completed by its fiscal third quarter of 2025 under a larger $7.5 billion authorization, signaling confidence in its financial stability and commitment to enhancing shareholder value.