Fri, Jun 27, 8:12 PM (17 days ago)
**Summary of The Kroger Co. (KR) Q1 2025 Financial Performance** **Financial Health and Performance:** - **Revenue:** $45.12 billion (down 0.3% YoY) - **Operating Profit:** $1.32 billion (up 2.2% YoY) - **Net Earnings:** $866 million (down 8.6% YoY) - **EPS:** $1.29 (flat YoY) - **Adjusted EPS:** $1.49 (up 4.2% YoY) - **Cash Flow from Operations:** $2.15 billion (down 8% YoY) **Key Metrics and Trends:** - **Identical Sales (excluding fuel):** Up 3.2% YoY, driven by pharmacy, eCommerce, and Fresh sales. - **eCommerce Sales:** Up 15% YoY, with strong demand for Delivery solutions. - **Gross Margin Rate:** 23.0% (up from 22.0% YoY), driven by the sale of Kroger Specialty Pharmacy and decreased fuel sales. - **Operating, General & Administrative (OG&A) Expenses:** 17.6% of sales (up from 16.8% YoY), impacted by decreased fuel sales, pension contributions, and healthcare costs. - **Debt:** $17.9 billion (flat YoY), with no outstanding commercial paper or borrowings under the revolving credit facility. **Uncertainties and Future Operations:** - **Opioid Litigation Settlements:** Kroger has recorded $1.13 billion in estimated settlement liabilities, with payments expected over 11 years. - **Merger Termination:** Albertsons sued Kroger for a $600 million termination fee, which Kroger disputes. - **Capital Investments:** $1.2 billion in capital investments, excluding mergers and lease buyouts, with plans to open, expand, or acquire 27 supermarkets and complete 210 remodels. - **Share Repurchases:** $181 million invested to repurchase 2.7 million shares, with $2.5 billion remaining under the December 2024 Repurchase Program. **Conclusion:** Kroger delivered solid first-quarter results, with strong sales led by pharmacy, eCommerce, and Fresh. The company is focused on driving growth in its core business and moving with speed to position itself well for the future. Kroger remains committed to maintaining its investment-grade rating, growing its dividend, and returning excess capital to shareholders. The outcome of the eCommerce operations review could have a material effect on financial statements.