Kroger (KR)
NYSEConsumer StaplesGrocery StoresSnapshot 2026-09-04
$58.59+0.14%
Close 2026-09-04 · 1-day change
NYSEConsumer StaplesGrocery StoresSnapshot 2026-09-04
Intact: The reason to own it still holds.
Kroger keeps growing sales about 2% a year. Profit guidance is steady with adjusted EPS of $5.10 to $5.30 and free cash flow near $2.9 billion. The $1.65 billion Giant Eagle deal boosts market share and growth potential. Capital spending stays strong at about $4 billion to support stores.
Margin pressure and government limits on beef prices could hurt profits. The recent selloff shows investor worries about growth and earnings. Share repurchases may slow after losing sponsorship deals. The company faces risks from rising costs and competitive grocery markets.
The price is about 12% below our fair value near $65 and 8% below the Street median. Analysts expect very high revenue growth, but implied earnings growth is negative. Our view is more cautious on growth and margins.
Breaks if: Capital expenditures fall below $3.8 billion in FY26
Sustain capital expenditures in the range of $3.8 to $4.0 billion for fiscal year 2026 to support growth and store investments.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on long-term sustainable earnings growth. The current thesis is in a watch state due to mixed recent performance and sector headwinds.
The market currently prices Kroger at a premium compared to peers, indicating that investors expect solid performance. However, there is a slight expectations gap, suggesting that the market may not fully account for potential challenges ahead.
Kroger's fundamentals are likely to remain stable, as management has reaffirmed guidance for earnings and cash flow. However, recent financial performance has been below that of industry peers, which could pose risks in the near term.
The thesis hinges on management's ability to meet their earnings guidance and the broader Consumer Staples sector performance. Key factors include potential inflationary pressures and the performance of sector bellwethers that could influence Kroger's momentum.
The most important moves since the prior daily snapshot.
Mixed, the news cuts both ways. Citi expects Kroger to narrow its sales guidance. This indicates increased competitive pressure from Walmart in the grocery sector. Kroger's foot traffic dropped 0.22% in July. This signals weaker demand despite prior sales growth.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Stated as a priority in 3 of last 3 quarters. Kroger consistently reaffirmed capital expenditure guidance of $3.8 to $4.0 billion for 2026. This steady guidance reflects management's commitment to maintaining investment levels to support growth and store improvements.
“Kroger expects capital expenditures of $3.8 to $4.0 billion for 2026.”
“Kroger expects capital expenditures of $3.8 to $4.0 billion for 2026.”
“Kroger expects capital expenditures of $3.8 to $4.0 billion for 2026.”
Breaks if: Free cash flow falls below $2.7 billion in FY26
Continue investing in the business to drive long-term sustainable net earnings growth while maintaining investment grade debt rating.
Stated as a priority in 5 of last 5 quarters. Kroger reaffirmed 2026 guidance including adjusted FIFO operating profit of $5.0 to $5.2 billion, adjusted EPS of $5.10 to $5.30, and free cash flow of $2.7 to $2.9 billion. Management consistently emphasizes investing in the business to drive long-term sustainable net earnings growth, and the financial guidance aligns with this commitment, indicating delivery on this priority.
“Kroger expects to continue to generate strong free cash flow and remains committed to investing in the business to drive long-term sustainable net earnings growth.”
“Kroger expects to continue to generate strong free cash flow and remains committed to investing in the business to drive long-term sustainable net earnings growth.”
“Kroger expects to continue to generate strong free cash flow and remains committed to investing in the business to drive long-term sustainable net earnings growth.”
“Kroger expects to continue to generate strong free cash flow and remains committed to investing in the business to drive long-term sustainable net earnings growth.”
“Kroger expects to continue to generate strong free cash flow and remains committed to investing in the business to drive long-term sustainable net earnings growth.”
Breaks if: Acquisition fails to close or significantly dilutes earnings
Breaks if: Profit margins decline significantly due to pricing pressure
Breaks if: Adjusted EPS falls below $5.10 in FY26
Continue investing in the business to drive long-term sustainable net earnings growth while maintaining investment grade debt rating.
Stated as a priority in 5 of last 5 quarters. Kroger reaffirmed 2026 guidance including adjusted FIFO operating profit of $5.0 to $5.2 billion, adjusted EPS of $5.10 to $5.30, and free cash flow of $2.7 to $2.9 billion. Management consistently emphasizes investing in the business to drive long-term sustainable net earnings growth, and the financial guidance aligns with this commitment, indicating delivery on this priority.
“Kroger expects to continue to generate strong free cash flow and remains committed to investing in the business to drive long-term sustainable net earnings growth.”
“Kroger expects to continue to generate strong free cash flow and remains committed to investing in the business to drive long-term sustainable net earnings growth.”
“Kroger expects to continue to generate strong free cash flow and remains committed to investing in the business to drive long-term sustainable net earnings growth.”
“Kroger expects to continue to generate strong free cash flow and remains committed to investing in the business to drive long-term sustainable net earnings growth.”
“Kroger expects to continue to generate strong free cash flow and remains committed to investing in the business to drive long-term sustainable net earnings growth.”
Over the next 1 to 3 years, Kroger's performance will depend on management execution and external market conditions. Not investment advice.