Executive Summary
The Kroger Co delivered a Q3 2024 revenue of $33.634 billion, a year-over-year decline of 9.25% and a sequential (QoQ) drop of 0.82%. Gross profit amounted to $6.929 billion on a gross margin of approximately 20.6%, with operating income of $1.014 billion and net income of $0.618 billion (EPS $0.85). The quarter showed margin stabilization relative to the prior year, but the top line remains pressured by macro dynamics and competitive intensity in the grocery sector. Cash flow remained solid on an operating basis ($0.926 billion), but free cash flow was essentially flat to negative at -$0.028 billion as capital expenditures rose to $0.954 billion, underscoring Kroger’s continued investments in store modernization, speed of commerce, and supply chain efficiency. The balance sheet remains cash-rich with $13.358 billion of cash and equivalents and total debt of $29.78 billion, yielding a net debt position of $16.42 billion. Key profitability and liquidity metrics suggest ongoing earnings resilience, but leverage remains a focal point for investors. Looking ahead, management’s emphasis on cost discipline, price investments to defend share, and omnichannel growth will be pivotal to sustaining margins and driving free cash flow in a competitive environment.
Key Performance Indicators
QoQ: 32.62% | YoY:-16.03%
QoQ: 32.81% | YoY:-16.67%
Key Insights
Revenue: $33.634B (YoY -9.25%, QoQ -0.82%); Gross Profit: $6.929B (Gross Margin ~20.6%); Operating Income: $1.014B (Operating Margin ~3.01%); Net Income: $0.618B (Net Margin ~1.84%); EPS: $0.85 (Diluted $0.84); EBITDA: $1.787B; Net Debt: $16.422B; Cash & Equivalents: $13.358B; Free Cash Flow: -$0.028B; Operating Cash Flow: $0.926B; Capex: $0.954B; Current Ratio: 1.54; Debt/Capitalization: 0.698; Interest Coverage: 9.63x; Dividend Yield: ~0.53%; P/E: ~17.5; P/BV: 3.36; DSO: 5.87 days; DIO: 26...
Financial Highlights
Revenue: $33.634B (YoY -9.25%, QoQ -0.82%); Gross Profit: $6.929B (Gross Margin ~20.6%); Operating Income: $1.014B (Operating Margin ~3.01%); Net Income: $0.618B (Net Margin ~1.84%); EPS: $0.85 (Diluted $0.84); EBITDA: $1.787B; Net Debt: $16.422B; Cash & Equivalents: $13.358B; Free Cash Flow: -$0.028B; Operating Cash Flow: $0.926B; Capex: $0.954B; Current Ratio: 1.54; Debt/Capitalization: 0.698; Interest Coverage: 9.63x; Dividend Yield: ~0.53%; P/E: ~17.5; P/BV: 3.36; DSO: 5.87 days; DIO: 26.31 days; CCC: -4.32 days.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
33.63B |
-9.25% |
-0.82% |
| Gross Profit |
6.93B |
-9.92% |
0.42% |
| Operating Income |
1.01B |
-27.62% |
5.30% |
| Net Income |
618.00M |
-16.03% |
32.62% |
| EPS |
0.85 |
-16.67% |
32.81% |
Key Financial Ratios
operatingProfitMargin
2.46%
operatingCashFlowPerShare
$1.28
freeCashFlowPerShare
$-0.04
dividendPayoutRatio
37.4%
Management Commentary
N/A — No earnings call transcript was provided in the data set. Expected themes from Kroger’s Q3 2024 call (if available) would typically cover: 1) Strategy and price investment timing (defensive positioning vs. promotional intensity), 2) Operating efficiency and supply chain progress (inventory turns, cost-to-serve, automation), 3) Digital and omnichannel growth (pickup/delivery adoption, loyalty program monetization), 4) Fuel margin dynamics and their impact on non-fuel profitability, and 5) Balance sheet management (debt reduction vs. capital allocation and share repurchases).
Forward Guidance
No explicit forward guidance was provided in the supplied data (QQ3 2024 10-Q). Given the observed revenue decline yet margin stabilization, a cautious outlook would emphasize: (i) continued focus on cost containment and operating leverage to preserve margins in a deflationary or low-inflation environment, (ii) selective price investments to defend market share in a highly competitive US grocery landscape, (iii) capital allocation prioritizing cash flow generation and debt refinancing opportunities, and (iv) ongoing investments in omnichannel capabilities and supply chain resilience. Key factors to monitor include grocery inflation/deflation trends, wage and labor costs, fuel price fluctuations, supply chain disruptions, and the pace of store modernization initiatives which could influence operating margins and capex needs.