- The Kroger Co achieved QQ3 2025 identical sales without fuel growth of 2.6% year over year and a 2-year stack acceleration of 4.9%, led by strength in pharmacy and e-commerce. E-commerce grew 17% in the quarter, with notable gains in delivery and a favorable shift toward pickup and third-party partnerships that broaden geographic reach and speed.
- The quarter was materially affected by a large non-cash impairment charge of $2.6 billion related to automated fulfillment centers, contributing to a negative net income of $1.32 billion and GAAP EPS of -$2.02. Management emphasizes these charges as part of a strategic shift toward a more profitable e-commerce and store-network model, with a pathway to e-commerce profitability in 2026 driven by a $400 million incremental operating profit contribution.
- Management outlined a multi-year plan to expand the store base (14 new stores in Q4 and ~30% higher new-store builds in 2026), accelerate capex into higher-return store formats, and push cost reductions through procurement, technology, and a hybrid e-commerce model. The company also highlighted ongoing macro headwinds (SNAP timing, inflation dynamics, and Inflation Reduction Act effects in pharmacy) and a reoriented capital-allocation framework aimed at 8-11% total shareholder return over time, supported by debt/adjusted EBITDA discipline (net debt to EBITDA 1.73 vs a target of 2.3-2.5). These factors frame a transition from near-term earnings pressure to longer-term, higher-margin growth in groceries, e-commerce, and media.