Kroger Beats Q2 Earnings but Cuts Full-Year Sales Forecast, Guides FY2026 EPS Below Consensus

SentiSense · Published Sep 11, 2026, 6:56 AM ET · Updated Sep 28, 2026, 2:45 AM ET

Kroger reported adjusted second-quarter EPS of $1.09 against a $1.06 consensus, up from $1.04 a year earlier, with adjusted FIFO operating profit of $1.076 billion. Digital carried the quarter: adjusted e-commerce sales rose 20% and Kroger Precision Marketing profit rose 24%, while identical sales excluding fuel grew only 0.2%. Full-year FY2026 EPS guidance of $5.10 to $5.30 has a $5.20 midpoint below the $5.27 consensus, and Bloomberg reported the grocer cut its sales forecast as competition intensifies.

KR beat on the bottom line and guided below it. Kroger reported adjusted second-quarter earnings of $1.09 a share against a $1.06 consensus, up from $1.04 in the year-ago quarter, with adjusted FIFO operating profit of $1.076 billion. Full-year FY2026 guidance of $5.10 to $5.30 carries a $5.20 midpoint that sits below the $5.27 analyst consensus, and Bloomberg reported the company cut its sales forecast as grocery competition intensifies.

The mix underneath the beat is the part that matters. Adjusted e-commerce sales grew 20% and Kroger Precision Marketing, the retail-media arm, grew profit 24%, both high-margin businesses the company has been leaning on. Against that, identical sales excluding fuel rose just 0.2%, which points to essentially flat underlying traffic and volume in the core stores. A grocer running a 0.71% net margin has very little room to absorb a price war, so the divergence between a fast-growing digital layer and a stalled physical base is the operating story here, not the three-cent beat.

Capital returns moved the other way. Kroger raised the quarterly dividend to $0.39 from $0.35, an annualized $1.56 and a 2.7% yield at the current price. The stock opened at $56.87 on Friday, against a 12-month range of $54.15 to $76.58, and trades below both its 50-day average of $57.78 and its 200-day average of $63.69, so the shares were already carrying a discount into the print.

The Street had been trimming ahead of this. JPMorgan cut its target to $70 from $72 with a neutral rating in June, Morgan Stanley went to $67 from $73 at equal weight, and Jefferies held a buy with an $80 target; the blended picture is a Moderate Buy with an average target of $71.31 across ten buys and nine holds. Whether those targets survive a below-consensus guide is the near-term question, and the thing to watch next quarter is whether identical sales excluding fuel can move off flat while the digital and retail-media lines keep compounding.