Kroger: A Solid First Quarter

Kroger reported first-quarter earnings per share that exceeded expectations.
However, revenue missed estimates, and the company's guidance was a bit disappointing.
The challenging macroeconomic environment has created a lot of uncertainty.
10 stocks we like better than Kroger ›
Here's our initial take on Kroger's (NYSE: KR) fiscal 2025 first-quarter financial report.
Metric
Q1 2024
Q1 2025
Change
vs. Expectations
Revenue
$45.27 billion
$45.12 billion
0%
Missed
Earnings per share (adjusted)
$1.43
$1.49
4.2%
Beat
Gross margin
22%
23%
100 bps
n/a
Debt-to-Adj. EBITDA ratio
1.25
1.69
35%
n/a
In the first quarter, Kroger reported solid earnings, although revenue fell short of expectations. The grocery giant reported $1.49 in earnings per share, three cents ahead of analysts' consensus, but sales came in just modestly short of estimates (although same-store sales excluding fuel purchases grew by 3.2% year over year).
E-commerce sales were a particularly bright spot, up 15% year over year and becoming more of a part of the company's business. It will be very interesting to keep an eye on this metric going forward.
Speaking of going forward, Kroger reaffirmed most of its guidance, including its expectation for full-year EPS in the range of $4.60 to $4.80. Analysts expected to see $4.76, so at the midpoint, management's guidance range is a little weak, especially considering that Kroger beat earnings estimates in the first quarter. On the other hand, Kroger raised its same-store sales guidance (which it refers to as "identical sales without fuel"), so it's fair to say that guidance is a mixed bag.
Management also provided some key updates on Kroger's capital allocation strategy, specifically saying that it expects to not only maintain, but increase its dividend over time. The company also addressed its $5 billion accelerated share repurchase program, which started in the fourth quarter of last year, stating that it expects it to be complete "no later than" the third quarter.
The initial market reaction to Kroger's earnings report was rather neutral. As of 8:15 a.m. EDT, about 15 minutes after the announcement, Kroger stock was up by less than 0.5%. This isn't too surprising, considering the mixed results with revenue, earnings, and forward-looking guidance.
However, it's worth noting that this reaction was before management's quarterly earnings call, which was scheduled for later on the same morning. Depending on the comments made, the stock could definitely react one way or another.
In CFO David Kennerley's comments, he specifically called out the uncertain macroeconomic environment as the reason why Kroger didn't raise its guidance for earnings, free cash flow, and other key metrics even though it beat expectations in the first quarter. Tariffs are a key factor to keep an eye on (Kroger sells a lot of products not made here), but it's generally important to realize that there's a lot that is outside of the company's control that can result in better- or worse-than-expected earnings as 2025 goes on.
Full earnings report
Investor relations page
Additional coverage: Where Will Kroger Stock Be in 1 Year?
Before you buy stock in Kroger, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Kroger wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!*
Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join .
See the 10 stocks »
*Stock Advisor returns as of June 9, 2025
Matt Frankel has no position in any of the stocks mentioned. The Motley Fool recommends Kroger. The Motley Fool has a disclosure policy.
Kroger: A Solid First Quarter was originally published by The Motley Fool

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Business Wire

23 minutes ago

• Business Wire

Amrize Debuts as Independent, Publicly Traded Company

NEW YORK & ZURICH--(BUSINESS WIRE)--Amrize announces its debut today as an independent, publicly traded company with the completion of its 100% spin-off from Holcim. Amrize shares will begin trading today on the New York Stock Exchange (NYSE) and the SIX Swiss Exchange under the ticker symbol 'AMRZ.' Amrize is building North America, as the partner of choice for professional builders with advanced branded solutions from foundation to rooftop. With over 1,000 sites and a highly efficient distribution network, Amrize delivers for its customers in every U.S. state and Canadian province. Its 19,000 teammates uniquely serve every construction market from infrastructure, commercial and residential to new build, repair and refurbishment. Jan Jenisch, Amrize Chairman and CEO: 'This is an exciting day for all our teammates across North America as we begin our journey together as Amrize. As an independent, publicly traded company, Amrize will capitalize on North America's attractive construction market driven by long term mega-trends from infrastructure modernization and onshoring of manufacturing to data center expansion and the opportunity to bridge the housing gap. With our track record of profitable growth, market-leading operations and broad range of advanced building solutions, we are ideally positioned to be the partner of choice for the professional builders of North America and to unlock value for all stakeholders. 'It has been a privilege to be part of Holcim since 2017 and I thank the entire Holcim team for their outstanding performance and contributions over the years, including the exceptional execution of our spin-off creating two distinct, independent champions. I wish the Holcim team every success as they begin their next chapter.' The spin-off is completed via the distribution of a dividend-in-kind of one Amrize share for every Holcim share owned as of the close of business on June 20, 2025. In 2024, Amrize generated $11.7 billion in revenue, a 13% CAGR from 2021; and achieved $3.2 billion in Adjusted EBITDA 1, a 16% CAGR since 2021, with an overall 27% Adjusted EBITDA Margin 2. The company generated $1.7 billion in Free Cash Flow 3 in 2024, a 15% CAGR since 2021, and has consistently delivered Adjusted EBITDA Cash Conversion Ratio 4 of more than 50% each year. The company has completed 36 acquisitions since 2018. Amrize presented its business strategy and mid-term financial targets at its investor day in New York on March 25. Now an independent, publicly traded company, Amrize will continue to deliver superior performance and value creation with above market growth, margin expansion and leading cash generation. It will pursue a growth-focused strategy with capital allocation prioritizing investments in the business, value accretive M&A and superior shareholder returns. Company leaders will mark the milestone by ringing the NYSE opening bell today at 9:30 am ET. Amrize leaders will then visit sites across the U.S. and Canada to celebrate and thank teammates. About Amrize Amrize (NYSE: AMRZ) is building North America, as the partner of choice for professional builders with advanced branded solutions from foundation to rooftop. With over 1,000 sites and a highly efficient distribution network, we deliver for our customers in every U.S. state and Canadian province. Our 19,000 teammates uniquely serve every construction market from infrastructure, commercial and residential to new build, repair and refurbishment. Amrize achieved $11.7 billion in revenue in 2024 and is listed on the New York Stock Exchange and the SIX Swiss Exchange. We are ready to build your ambition. Learn more at Important disclaimer – forward-looking statements: This media release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements do not constitute forecasts and include all statements that are not historical statements of fact and those regarding our intent, belief, targets or expectations, including, but not limited to: future commercial or financial performance or the anticipated benefits or effects of the spin-off; Amrize's expected areas of focus and strategy to drive growth and profitability and create long-term shareholder value; the impact of planned acquisitions and divestments and any other statements regarding Amrize's future operations, anticipated business levels, planned activities, anticipated growth, market opportunities, strategies and other expectations. Although Amrize believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions as at the time of publishing this media release, investors are cautioned that these statements are not guarantees of future performance. No assurance can be given that any plan, initiative, projection, goal, commitment, expectation or prospect set forth in this media release can or will be achieved, or that Amrize will be able to realize any strategic benefits or opportunities as a result of these actions. Neither can there be any guarantee that shareholders will achieve any particular level of returns, or that Amrize will be commercially successful in the future or achieve any particular financial result. We caution investors not to place undue reliance on any such forward-looking statements. Words such as "anticipate(s)," "expect(s)," "intend(s)," "believe(s)," "plan(s)," "may," "will," "would," "could," "should," "seek(s)," and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained, and Amrize assumes no (and disclaims any) obligation to revise or update such forward-looking statements to reflect future events or circumstances. We make no representations or warranties as to the accuracy of any statements or information contained in this media release. Important factors that could cause actual results to differ from those in our forward-looking statements include, without limitation: 1) the effect of political, economic and market conditions and geopolitical events, 2) the logistical and other challenges inherent in our operations, 3) the actions and initiatives of current and potential competitors, 4) the level and volatility of, interest rates and other market indices, 5) the outcome of pending litigation, 6) the impact of current, pending and future legislation and regulation, 7) factors related to the failure of Amrize to achieve some or all of the expected strategic benefits or opportunities expected from the separation, 8) that Amrize may incur material costs and expenses as a result of the separation, 9) that Amrize has no history operating as an independent, publicly traded company, 10) that Amrize's historical and pro forma financial information is not necessarily representative of the results that it would have achieved as a separate, publicly traded company and therefore may not be a reliable indicator of its future results, 11) Amrize's obligation to indemnify Holcim pursuant to the agreements entered into connection with the separation and the risk Holcim may not fulfill any obligations to indemnify Amrize under such agreements, 12) that under applicable tax law, Amrize may be liable for certain tax liabilities of Holcim following the separation if Holcim were to fail to pay such taxes, 13) the fact that Amrize may receive worse commercial terms from third-parties for services it presently receives from Holcim, 14) that after the separation, certain of Amrize's executive officers and directors may have actual or potential conflicts of interest because of their previous positions at Holcim, 15) potential difficulties in maintaining relationships with key personnel and 16) that Amrize will not be able to rely on the earnings, assets or cash flow of Holcim and Holcim will not provide funds to finance Amrize's working capital or other cash requirements. Readers should carefully review the final information statement relating to the spin-off, including but not limited to the matters described under "Risk Factors", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in other sections. The final information statement identifies and addresses other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. A copy of the final information statement has been filed with the SEC as Exhibit 99.1 to the Current Report on Form 8-K dated June 2, 2025 and is available at This media release does not constitute an offer to sell, or a solicitation of an offer to buy or subscribe for, any securities nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on, in connection with any contract therefore. This media release does not constitute a prospectus as defined in the Swiss Financial Services Act of 15 June 2018 or a prospectus under the securities laws and regulations of the United States or any other laws. This media release does not constitute a recommendation with respect to the shares of Amrize. Non-GAAP Financial Measures This media release contains certain financial measures of historical performance and financial positions that are not prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). We refer to these measures as "non-GAAP" financial measures. Management believes that these non-GAAP financial measures are useful information to help describe the performance of Amrize. These non-GAAP financial measures should not be considered as alternatives to financial measures prepared in accordance with U.S. GAAP. The reasons Amrize uses these non-GAAP financial measures are included in Amrize's final information statement filed with the SEC and the reconciliations to their most directly comparable GAAP financial measures are included below. Definitions of Non-GAAP Financial Measures: EBITDA is defined as Net income (loss), excluding Depreciation, depletion, accretion and amortization, Interest expense, net and Income tax benefit (expense). 1 Adjusted EBITDA is defined as Segment Adjusted EBITDA including unallocated corporate costs. Segment Adjusted EBITDA is defined as Net income (loss), excluding unallocated corporate costs, Depreciation, depletion, accretion and amortization, Loss on impairments, Other non-operating income (expense), net, Interest expense, net, Income tax benefit (expense), Income from equity method investments, and certain other items, such as costs related to acquisitions, certain litigation costs, restructuring costs, charges associated with non-core sites and certain warranty charges related to a pre-acquisition manufacturing issue and transaction costs related to the spin-off. 2 Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenues. 3 Free Cash Flow is defined net cash provided by (used in) operating activities plus proceeds from property and casualty insurance, proceeds from land expropriation and proceeds from disposals of long-lived assets less purchases of property, plant and equipment. 4 Adjusted EBITDA Cash Conversion Ratio is defined as Free Cash Flow divided by Adjusted EBITDA. The table below reconciles our net income and net income margin, the most directly comparable financial measures calculated in accordance with U.S. GAAP, to Adjusted EBITDA and Adjusted EBITDA Margin, respectively. (1) Other non-operating (income) expense, net primarily consists of costs related to pension and other postretirement benefit plans and gains on proceeds from property and casualty insurance. (2) Other primarily consists of costs related to acquisitions, certain litigation costs, restructuring costs, charges associated with non-core sites, certain warranty charges related to a pre-acquisition manufacturing issue and transaction costs related to the spin-off. Expand The table below reconciles our net cash provided by operating activities, the most directly comparable financial measure calculated in accordance with U.S. GAAP, to Free Cash Flow and Adjusted EBITDA Cash Conversion Ratio. (1) Capital expenditures, net includes purchases of property, plant and equipment, proceeds from property and casualty insurance income, proceeds from land expropriation and proceeds from disposals of long-lived assets. Expand

Yahoo

26 minutes ago

• Yahoo

Worthington (WOR) Q2 Earnings: What To Expect

Diversified industrial manufacturing company Worthington (NYSE:WOR) will be reporting results this Tuesday after market hours. Here's what investors should know. Worthington beat analysts' revenue expectations by 6.7% last quarter, reporting revenues of $304.5 million, down 3.9% year on year. It was a very strong quarter for the company, with an impressive beat of analysts' EPS estimates and a solid beat of analysts' adjusted operating income estimates. Is Worthington a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting Worthington's revenue to decline 5.6% year on year to $301.1 million, improving from the 13.6% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.84 per share. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Worthington has missed Wall Street's revenue estimates six times over the last two years. With Worthington being the first among its peers to report earnings this season, we don't have anywhere else to look to get a hint at how this quarter will unravel for industrial machinery stocks. However, investors in the segment have had steady hands going into earnings, with share prices flat over the last month. Worthington is down 1.9% during the same time and is heading into earnings with an average analyst price target of $59.20 (compared to the current share price of $58.38). Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. Sign in to access your portfolio

Business Insider

4 hours ago

• Business Insider

Coterra Energy (CTRA) Receives a Buy from Wells Fargo

Wells Fargo analyst Roger Read maintained a Buy rating on Coterra Energy (CTRA – Research Report) on June 20 and set a price target of $31.00. The company's shares closed last Friday at $26.97. Confident Investing Starts Here: According to TipRanks, Read is a 3-star analyst with an average return of 1.7% and a 53.80% success rate. Read covers the Energy sector, focusing on stocks such as Valero Energy, EOG Resources, and Phillips 66. In addition to Wells Fargo, Coterra Energy also received a Buy from Piper Sandler's Mark Lear in a report issued on June 16. However, on June 9, Morgan Stanley maintained a Hold rating on Coterra Energy (NYSE: CTRA). Based on Coterra Energy's latest earnings release for the quarter ending March 31, the company reported a quarterly revenue of $924 million and a net profit of $516 million. In comparison, last year the company earned a revenue of $1.37 billion and had a net profit of $352 million Based on the recent corporate insider activity of 39 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CTRA in relation to earlier this year. Last month, Stephen Bell, the EVP – Business Development of CTRA sold 100,000.00 shares for a total of $2,525,000.00.