Kroger Co. reported a modest increase in total sales for the fiscal year ending January 31, 2026, reaching $147.6 billion, up 0.4% from $147.1 billion in the previous year. However, net earnings attributable to the company saw a significant decline of 61.9%, falling to $1.016 billion, or $1.54 per diluted share, compared to $2.665 billion, or $3.67 per diluted share, in 2025. The decrease in profitability was largely attributed to a $2.5 billion impairment charge related to the company's fulfillment network, which did not meet operational or financial expectations.
In terms of operational performance, Kroger's identical sales, excluding fuel, increased by 2.9%, driven primarily by growth in eCommerce, pharmacy, and fresh food departments. eCommerce sales alone surged by 16%, reflecting strong demand for delivery solutions. The company served approximately 63 million households annually, with over 95% of transactions linked to its loyalty program. Despite these positive indicators, the overall operating profit dropped to $1.89 billion, a decrease of 50.9% from the previous year, primarily due to increased operating expenses and the aforementioned impairment charges.
Strategically, Kroger has been focusing on enhancing its eCommerce capabilities and optimizing its store network. The company closed approximately 60 underperforming stores, incurring related costs of $100 million, and reduced its corporate administrative team by nearly 1,000 associates to improve efficiency. Additionally, Kroger completed the sale of its Kroger Specialty Pharmacy business for $464 million in 2024, which contributed to a gain on sale of $79 million. The company also announced a $2 billion share repurchase program to enhance shareholder value.
Kroger's total employee count stood at over 403,000 as of January 31, 2026, reflecting the company's commitment to maintaining a robust workforce amid ongoing labor market challenges. The company continues to invest in its workforce, increasing average hourly wages to over $20, with a focus on attracting and retaining talent. Looking ahead, Kroger aims to leverage its investments in Fresh, Our Brands, Personalization, and eCommerce to drive customer loyalty and sustainable growth, with expectations of achieving a total shareholder return in the range of 8% to 11% over time.
About KROGER CO
Kroger is a leading U.S. grocery retailer offering supermarkets, pharmacies, and fuel centers across multiple formats. It focuses on delivering value, convenience, and personalized shopping experiences through its extensive store network and digital ecosystem. The company leverages data analytics, private label brands, and omnichannel services to enhance customer loyalty and drive high-margin alternative revenue streams.
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