Kroger posted mixed results in the third quarter, impacted by the shutdown of the United States Federal Government and shoppers who were more selective in their spending.
Net loss was $1.32 billion, or $2.02 per diluted share, versus net earnings of $618 million, or 84 cents per diluted share, in the year-earlier quarter, the company reported. Adjusted for one-time events, company earnings were $697 million, or $1.05 per diluted share, versus $719 million, or 98 cents per diluted share, in the quarter a year prior.
An analyst consensus estimate from Zacks Investment Research forecasts earnings per adjusted diluted share of $1.04 and revenues of $34.29 billion.
Identical sales without the impact of fuel operations increased 2.6% year over year in the quarter, Kroger stated, adding that e-commerce sales grew by 17%.
Total company sales were $33.86 billion versus $33.63 billion in the year-before quarter. Results in the year-past quarter included sales of $387 million from the spun-off Kroger Specialty Pharmacy, the company noted.
Operating loss was $1.54 billion versus operating profit of $828 million in the year-previous period.
Kroger pointed out that its operating, general and administrative expense rate, excluding fuel and adjustment items, increased 27 basis points compared to the same period in the year past, primarily due to the sale of Kroger Specialty Pharmacy and investments in associate wages and benefits, partially offset by lower incentive plan costs and improved productivity. In addition, the company decided to make an accelerated contribution to multi-employer pension plans in the third quarter to help stabilize associates’ future benefits and reduce ongoing obligations, it asserted, which increased the operating, general and administrative rate, excluding fuel and adjustment items, by eight basis points year over year. Operating general and administrative expenses were 25% of sales in the most recent third quarter, versus 17.5% in the year-past period.
Kroger adjusted its guidance for the fiscal year, now putting identical sales without fuel at 2.8%-3.0%, from 2.7%-3.4%, and earnings per adjusted share at $4.75 – $4.80, from $4.70 – $4.80.
The company’s chairman and CEO, Ron Sargent, said on a conference call that many Kroger customers shopped cautiously in October and November due to concerns about the U.S. government shutdown and the pause in SNAP benefits. Customers were more selective and promotional in their purchasing, reducing discretionary spending and driving general merchandise to negative comparable sales.
In announcing the financial results, Sargent said, “Kroger delivered another quarter of strong results reflecting meaningful progress on our strategic priorities. Our e-commerce business posted another quarter of impressive performance. We have now completed our strategic review, which we expect will make our e-commerce business profitable in 2026. We continue to focus on what matters most, serving our customers, running great stores and strengthening our core business. Our results show we are improving the customer experience and building a strong foundation for long-term growth.”
