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Kroger Stock Falls on a Mixed Quarter. What Stood Out.

Dec 03, 2025 15:31:00 -0500 by Evie Liu | #Consumer #Earnings Report

Supermarket chain Kroger posted mixed results for its fiscal third quarter and narrowed its fiscal-year earnings guidance range. (Shelby Tauber/Bloomberg)

Key Points

Kroger stock declined on Thursday after the supermarket chain reported mixed third-quarter results.

Total sales came in at $33.9 billion, roughly flat from a year ago and missing the $34.2 billion Wall Street had forecast. Same-store sales without fuel increased 2.6% from a year ago, also missing the consensus expectation of 2.9%.

Kroger posted an operating loss of $1.5 billion in the quarter, compared with a profit of $828 million in the year-ago period. The loss was largely due to the $2.6 billion impairment and related charges for its automated fulfillment network—a system of high-tech warehouses and logistics set up to process online grocery orders with minimal human labor.

Adjusted for the one-time costs, earnings came at $1.05 a share, up from 98 cents a year ago and inching past the $1.03 consensus estimate among analysts polled by FactSet.

Kroger’s e-commerce continues to grow quickly, generating 17% more sales compared with a year ago. Management said the e-commerce business is expected to turn profitable in 2026.

Despite that segment’s growth, weaker-than-expected overall sales and soaring costs have weighed on investor sentiment. The stock tumbled more than 5% in Thursday trading. Shares are up just 1.2% year to date.

The grocer narrowed its fiscal-year adjusted earnings outlook to a range of $4.75 to $4.80 a share, compared with a prior guide of $4.70 to $4.80 a share. Kroger said it sees same-store sales growth, excluding fuel, of between 2.8% and 3%, versus 2.7% to 3.4% previously.

Rising prices at restaurants have pushed more people to shop at grocery stores and eat at home. Over the past 12 months, costs for “food away from home”—a measurement for restaurant prices used by the Bureau of Labor Statistics—increased 3.7%, outpacing “food at home,” or grocery costs, by one percentage point.

Still, consumer demand could wobble as rising food prices continue to squeeze shoppers’ wallets. Tariffs imposed earlier this year have further boosted costs of various imported foods, although President Donald Trump’s administration recently rolled back the levies on many agricultural products, including beef, coffee, and cocoa.

Survey data suggest that many Americans are feeling the pinch. In a September survey by Axios and the Harris Poll, roughly half of Americans said it’s harder to afford groceries now than a year ago. Another survey by retail consulting firm Dunnhumby showed that 28.5% of American consumers reported reducing meal size or skipping meals due to economic hardship.

Things could get worse when federal food assistance gets taken away. In November, benefits from the Supplemental Nutrition Assistance Program, or SNAP, were paused due to funding lapses during a federal government shutdown—the first time in the program’s 60-year history.

The pause translated almost immediately into a contraction in grocery demand—a blow not only to low-income households, but also food retailers and their suppliers. Roughly 42 million Americans rely on SNAP to buy food essentials, receiving nearly $100 billion benefits in 2024.

While SNAP funding resumed this month, some enrollees may still lose their food assistance due to new work requirements for the program. There are other legal and political battles over SNAP as well.

This week, Agriculture Secretary Brooke Rollins threatened to cut off federal funding for food stamps in more than 20 Democratic-led states that have—according to her—refused to share the program’s personal data on recipients with the Trump administration.

Write to Evie Liu at evie.liu@barrons.com and Mackenzie Tatananni at mackenzie.tatananni@barrons.com