Executive Summary
The Kroger Co delivered QQ1 2025 revenue of $45.118 billion, a slight year-over-year dip of 0.3% but a robust sequential expansion of 31.5% from the prior quarter, driven by seasonality and a favorable mix. Net income of $0.866 billion and an EPS of $1.30 (diluted $1.29) reflect continued earnings resilience in a low-margin, high-competition grocery environment. Gross margin stood at 21.09%, with an operating margin of 3.19% and a net margin of 1.92%, underscoring the ongoing cost pressures and promotional intensity in the sector. Free cash flow reached $972 million, supported by $2.016 billion of operating cash flow and modest capital expenditures of $1.044 billion, enabling continued deleveraging and shareholder-friendly activities such as share repurchases and dividends.
Key Performance Indicators
Key Insights
Revenue: $45.118B (QoQ +31.51%, YoY -0.33%). Gross Profit: $9.516B (QoQ +32.89%, YoY +3.81%). Operating Income: $1.438B (QoQ +20.84%, YoY -2.11%). Net Income: $0.866B (QoQ +36.59%, YoY -8.55%). EPS: $1.30 (diluted $1.29) (QoQ +44.44%, YoY +0%). Gross Margin: 21.09%. Operating Margin: 3.19%. Net Margin: 1.92%. EBITDA: $2.603B. EBITDA Margin: 5.77%. Net Debt: $20.47B. Cash and Cash Equivalents: $4.738B. Net Cash from Operating Activities: $2.016B. Free Cash Flow: $0.972B. Current Ratio: ~0.95. Qui...
Financial Highlights
Revenue: $45.118B (QoQ +31.51%, YoY -0.33%). Gross Profit: $9.516B (QoQ +32.89%, YoY +3.81%). Operating Income: $1.438B (QoQ +20.84%, YoY -2.11%). Net Income: $0.866B (QoQ +36.59%, YoY -8.55%). EPS: $1.30 (diluted $1.29) (QoQ +44.44%, YoY +0%). Gross Margin: 21.09%. Operating Margin: 3.19%. Net Margin: 1.92%. EBITDA: $2.603B. EBITDA Margin: 5.77%. Net Debt: $20.47B. Cash and Cash Equivalents: $4.738B. Net Cash from Operating Activities: $2.016B. Free Cash Flow: $0.972B. Current Ratio: ~0.95. Quick Ratio: ~0.48. Total Debt: $25.208B. Return on Equity: ~9.7%. ROA: ~1.6%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
45.12B |
-0.33% |
31.51% |
| Gross Profit |
9.52B |
3.81% |
32.89% |
| Operating Income |
1.44B |
-2.11% |
20.84% |
| Net Income |
866.00M |
-8.55% |
36.59% |
| EPS |
1.30 |
0.00% |
44.44% |
Management Commentary
Note: Transcript data was not provided in the prompt. The following highlights are synthesized themes consistent with a typical Kroger QQ1 2025 earnings discussion and the reported financials. - Revenue and mix: Management typically emphasizes discipline in pricing, promotions, and assortment to defend traffic and margin in a highly competitive grocery environment. The QoQ revenue jump suggests seasonality and campaign-driven volume recovery into the new fiscal quarter. - Margin discipline and cost control: With gross margin around 21.1%, the focus remains on cost-to-serve optimization, supply chain efficiency, and SG&A leverage to protect margins amid input cost volatility. - Cash flow and capital allocation: Operating cash flow of $2.016B supports free cash flow of $972M, funding capex of $1.044B and continued shareholder returns (dividends and modest buybacks). - Balance sheet and liquidity: The company maintains a strong liquidity position with cash of $4.74B against total debt of $25.21B, underscoring ongoing leverage considerations even as FCF supports deleveraging opportunities over time.
Forward Guidance
No explicit forward-looking guidance was provided in the data supplied. Given the QQ1 2025 results, investors should monitor: (1) the pace of same-store sales and traffic, (2) ongoing promotional activity and its impact on gross margin, (3) cost inflation and supply chain normalization, (4) the trajectory of debt reduction and balance sheet optimization, and (5) any announced capital allocation plans (dividends, buybacks, or strategic investments in e-commerce and automation). A cautious stance on leverage is warranted given net debt/EBITDA around 7.9x, suggesting a need for continued deleveraging over the coming quarters to restore financial flexibility.