The Kroger 2026 Q2 Earnings Strong Performance as Net Income Surges 31.2%

The Kroger reported its fiscal 2026 Q2 earnings on September 11, 2025. The results beat expectations with robust earnings growth. The company raised its identical sales guidance and provided updated net operating profit and EPS projections, reflecting optimism about its performance trajectory.

Revenue
The Kroger reported total revenue of $33.94 billion in 2026 Q2, a 0.1% increase compared to $33.91 billion in the prior year’s second quarter. While the overall top-line growth was modest, the company emphasized strong performance in key areas, including pharmacy, e-commerce, and fresh categories. Excluding fuel, the company reported identical sales growth of 3.4%, signaling positive momentum from in-store and digital initiatives.

Earnings/Net Income
Kroger’s earnings per share (EPS) surged 42.2% year-over-year to $0.91 in Q2 2026, from $0.64 in the same period in 2025. Net income also rose significantly, reaching $610 million in the latest quarter, representing a 31.2% increase from $465 million in Q2 2025. The earnings performance, which marks 20 consecutive years of profitability in the quarter, reflects strong operational discipline and cost management.

Price Action
The stock price of The Kroger declined 2.57% on the latest trading day and fell 0.90% over the full week. On a month-to-date basis, the stock has dropped 9.58%, reflecting mixed investor sentiment despite the strong earnings results.

Post-Earnings Price Action Review
Ronald Sargent, Chairman of the Board & Interim CEO, highlighted the company’s solid second-quarter results, driven by identical sales growth of 3.4% excluding fuel. This growth was attributed to strong performance in pharmacy, e-commerce, and fresh categories. Sargent outlined strategic initiatives including the closure of 60 unprofitable stores, a reduction of nearly 1,000 corporate staff, and investments in AI to improve pricing, reduce shrink, and enhance fulfillment efficiency. Looking ahead, Sargent expressed confidence in the company’s ability to sustain momentum through leadership upgrades and 30 new store openings in 2025. He also mentioned strategic reviews of noncore assets and e-commerce fulfillment, with further updates expected in the third quarter.

Guidance
Kroger raised its identical sales without fuel guidance to a range of 2.7% to 3.4%, with Q3 expected to be slightly below the midpoint. The company provided adjusted FIFO net operating profit guidance of $4.8 billion to $4.9 billion and adjusted EPS guidance of $4.70 to $4.80. Kroger also expects to complete its $5 billion share repurchase program by Q3 2025 and continue returning capital through dividends and buybacks. With a net debt-to-EBITDA ratio of 1.63 and strong free cash flow, the company remains well-positioned for strategic reinvestment and shareholder returns.

Additional News
In the three weeks following the earnings report, Kroger announced several strategic moves. The company confirmed the closure of an additional 15 underperforming stores, bringing the total to 75 locations to be shuttered by the end of 2025. On the leadership front, Sargent confirmed the appointment of two new senior vice presidents to oversee digital transformation and supply chain optimization. In terms of capital return, the company announced that it had repurchased 2.1 million shares at an average price of $32.50 during the quarter, bringing the total repurchases under the $5 billion program to 80%. These actions reflect Kroger’s ongoing commitment to enhancing operational efficiency and delivering long-term value to shareholders.