Title

Earning Preview: Kroger revenue is expected to increase by 1.62%, and institutional views are mostly bullish

Abstract

Kroger will report fiscal fourth-quarter results on March 5, 2026 Pre-Market; this preview summarizes last quarter’s performance, the company’s current-quarter revenue and EPS projections with year-over-year comparisons, key operating drivers to watch, and the latest institutional views since January 1, 2026.

Market Forecast

Based on current-quarter projections, Kroger is expected to deliver revenue of 35.07 billion, up 1.62% year over year, EBIT of 1.15 billion, up 1.76% year over year, and adjusted EPS of 1.20, up 7.69% year over year. Forecast gross margin and net profit margin were not provided; consensus points to stable top-line growth and modest operating profit expansion into the print. Non-fuel supermarkets remain the core revenue engine, supported by value-oriented offerings and merchandising that aim to hold share of wallet amid a low-inflation backdrop. The “Other” segment, which contributed 327.00 million last quarter, is positioned to benefit from digital, media and services initiatives alongside the company’s anticipated 1.62% year-over-year revenue growth in the current quarter.

Last Quarter Review

In the prior quarter, Kroger reported revenue of 33.86 billion (up 0.67% year over year), a gross profit margin of 23.34%, a GAAP net loss attributable to shareholders of 1.32 billion with a net profit margin of -3.90%, and adjusted EPS of 1.05 (up 7.14% year over year). A key highlight was the divergence between reported and adjusted performance: despite the GAAP net loss, adjusted EPS advanced year over year, indicating underlying operating resilience. In terms of mix, non-fuel supermarkets generated 30.36 billion (approximately 89.67% of quarterly revenue), while total company revenue rose 0.67% year over year, underscoring a largely stable demand environment.

Current Quarter Outlook

Core Supermarket Operations (Non-Fuel)

The core non-fuel supermarkets business remains the principal driver of quarterly outcomes, with last quarter’s 30.36 billion representing roughly 89.67% of sales. Heading into this print, key variables include promotional intensity, price elasticity in center-store and fresh categories, and the effectiveness of household penetration and retention initiatives through loyalty and personalization. Given the modest company-level revenue growth expectation of 1.62% for this quarter, trends in volume versus mix—especially within private brands—will be central to whether topline growth translates into margin stability. Private-brand penetration typically supports gross profit rate, especially when national-brand inflation cools and price gaps compress. A calmer inflation backdrop can help stabilize price investments while still allowing category resets to encourage trade-up into higher-margin private-brand tiers. The mix between fresh and ambient also matters: sustained momentum in fresh can support traffic and basket, while shelf resets and curated assortments can keep center-store units trending positively. A strong in-store execution narrative—on-stock rates, waste control in perishables, and effective markdown management—can be a quiet but meaningful contributor to gross margin holding up versus the prior quarter’s 23.34%. Macro factors flagged by recent sell-side commentary point to a mixed near-term environment: food disinflation and government benefit normalization could temper unit growth for some customer cohorts, while select wellness trends may change category-level demand in areas such as snacks and prepared foods. Against that backdrop, execution around value (everyday pricing and promotions) and personalization (price targeting, offers, rewards) is likely to determine whether the core non-fuel business modestly outperforms or simply meets the low single-digit growth bar implied by the 1.62% total revenue forecast.

Alternative Profit and Digital Levers

While not broken out in the tool’s forecasts, the “Other” segment’s 327.00 million from last quarter captures digital and services activities that management and analysts often cite as structurally accretive to profitability. Retail media, data monetization, and precision marketing bolster gross profit rate without requiring equivalent additions to physical labor or inventory, providing operating leverage that can support EPS growth even during periods of modest sales increases. The 7.69% projected year-over-year gain in adjusted EPS (to 1.20) this quarter implicitly assumes that margin-accretive initiatives continue to offset pockets of volume softness. Digital fulfillment—pickup and delivery—remains an important part of customer engagement. Higher order density and improved routing can lower per-order costs, while vendor-funded promotions and media placements can raise effective gross profit. Personalization at scale, enabled by first-party data, tends to raise offer relevance, increase conversion, and improve wallet share among engaged households. In a low-inflation environment, targeted promotions supported by vendor funding can preserve price credibility and expand unit demand without overly pressuring gross margin. The upshot is that even modest topline growth—1.62% year over year—can translate to faster EPS growth if these alternative profit channels continue to compound. What to watch at the print: indications of retail media growth, improvements in digital fulfillment economics, and commentary on the breadth of advertiser demand. Evidence that these channels are sustaining momentum would support the EBIT estimate of 1.15 billion (up 1.76% year over year) and help validate the anticipated 7.69% EPS expansion, particularly if the core supermarkets business trends in line with expectations.

Near-Term Share Price Drivers

Leadership is a focal point this quarter, with the appointment of Greg Foran as chief executive officer effective in early February 2026. Investors will be attentive to any qualitative framing he provides around near-term merchandising discipline, store standards, growth prioritization, and digital monetization. Even if formal strategic pivots are not announced at the print, clarity on execution priorities often reshapes expectations for comp trajectories and operating leverage through the year. Sell-side positioning has been active in recent weeks. Multiple institutions reiterated or initiated positive stances with higher price targets, while a few expressed more neutral views. The skew of recommendations since January 1, 2026 has been toward the positive side, and that bullish tilt can influence sensitivity around the print; in such cases, solid in-line results may suffice to keep momentum intact, whereas a revenue miss versus the 35.07 billion projection or any sign of margin pressure could produce a disproportionate reaction. Against this backdrop, confirmations of stable gross profit rate drivers and disciplined expense management would likely be well received. Finally, investors often scrutinize fuel dynamics separately, given inherent volatility and the 3.17 billion contribution from fuel last quarter. Fuel unit volumes and wholesale-retail spread behavior can swing quarterly earnings. That said, with fuel representing a smaller share of total sales than the non-fuel base, visibility into core food and household categories remains the key determinant of how the market interprets the quarter. Taken together, the combination of leadership clarity, progress in alternative profit channels, and a steady core supermarket performance constitutes the main narrative path to achieving the 1.20 EPS estimate and 35.07 billion revenue expectation.

Analyst Opinions

Across the views collected since January 1, 2026, the balance of opinion is tilted toward bullish. Among identifiable stances, bullish calls materially outnumber bearish ones, with numerous neutral holds in the mix. Counting directionally, bullish versus bearish sentiment approximates 7:1 when neutrals are excluded, indicating that the majority of institutional commentary remains constructive ahead of the report. The bullish camp emphasizes resilient earnings power and execution. Evercore ISI maintained an Outperform stance and raised its price target to 84, citing a favorable risk-reward skew supported by earnings durability and ongoing progress in high-margin alternative profit streams. Jefferies reiterated a Buy with a target of 80, highlighting the company’s ability to deliver steady EPS growth even as revenue trends normalize in a lower-inflation environment. Roth MKM kept a Buy and a 75 price target, pointing to the balance of stable core operations and operational enhancements in digital and media channels that can continue to underpin margin. Guggenheim reaffirmed a Buy with a 78 target and similar reasoning around a well-managed P&L and consistent execution on cost and mix initiatives. Bank of America’s positive view—citing strategic advancements and growth potential—aligns with this majority thesis, which anticipates sustainable profit growth driven by improving leverage in alternative profit pools and disciplined expense control. Argus also maintained a Buy, underscoring an intact long-term trajectory and sufficient near-term catalysts to support earnings. On balance, the bullish narrative expects the quarter to come in broadly consistent with the revenue estimate of 35.07 billion (up 1.62% year over year) and adjusted EPS of 1.20 (up 7.69% year over year), with upside risk if gross profit rate benefits from a constructive mix of private brands and continued traction in retail media. The expectation is that even if topline growth remains in the low-single-digit range, merchandise mix, vendor-funded promotions, and digital monetization can support EBIT growth of around 1.76% year over year to 1.15 billion. Analysts also point out that the quarterly dividend of 0.35 per share was reaffirmed in late January, consistent with an earnings and cash flow profile viewed as stable by the bullish majority. Though there have been a few neutral updates and one or two more cautious takes, the prevailing view anticipates steady execution and a constructive earnings cadence into the new leadership tenure, with post-print commentary on strategy and operational priorities serving as an additional catalyst. In summary, the majority of institutional research anticipates a quarter that confirms Kroger’s capacity to translate modest revenue growth into faster EPS expansion via mix, media, and cost discipline. Provided the company delivers near consensus on revenue and demonstrates stable gross profit drivers, the bullish view contends that guidance and qualitative commentary under new leadership can keep investor confidence intact and set the stage for a consistent year of earnings delivery.