NYSE · Consumer Defensive

The Kroger Co.

KR · Grocery Stores

$56.61

▼ -5.21 (-8.43%)

Cached · 10 min

Overall Grade

Defensive

Enterprising

Profitability

F⤢

Gross Profit Margin 23.4%

Operating Margin 3.6%

Net Income Margin 2.5%

Fin. Health

F⤢

Years to Pay Off Debt 28.7 yrs

Working Capital vs Long-Term Debt -$18.1B

Working Capital -$3.6B

Valuation

F⤢

Margin of Safety 0.0%

Price-to-Book 5.89x

Cash Flow

C⤢

Free Cash Flow $1.7B

CapEx % of Net Income 109.9%

Owner Earnings $2.7B

Profitability

Gross Profit Margin 23.4%

Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.

Operating Margin 3.6%

Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.

Net Income Margin 2.5%

Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.

Financial Health

Years to Pay Off Debt 28.7 yrs

Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.

Working Capital vs Long-Term Debt -$18.1B

Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.

Working Capital -$3.6B

Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.

Cash Flow

Free Cash Flow $1.7B

Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.

CapEx % of Net Income 109.9%

Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.

Owner Earnings $2.7B

Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.

Defensive — Graham's strict criteria (P/B, P/E, dividends, stability) · Enterprising — Profitability & cash flow focused, accepts higher valuations for quality

About The Kroger Co.

The Kroger Co. operates as a food and drug retailer in the United States. The company operates combination food and drug stores, multi-department stores, marketplace stores, and price impact warehouses. Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce; and its multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products, and toys. The company's marketplace stores offer full-service grocery, pharmacy, health and beauty care, and perishable goods, as well as general merchandise, including apparel, home goods, and toys; and its price impact warehouse stores provide grocery, and health and beauty care items, as well as meat, dairy, baked goods, and fresh produce items. It also manufactures and processes food products for sale in its supermarkets and online; and sells fuel through its fuel centers. The company sells its products through its stores, fuel centers, and online platforms. The Kroger Co. was founded in 1883 and is based in Cincinnati, Ohio.

Market Data

Market Cap $34.9B

Enterprise Value $72.5B

P/E (TTM) 36.76

Dividend Yield 2.22%

Exchange NYSE

Key Margins

Gross Profit 23.4%

Operating Margin 3.6%

Net Margin 2.5%

Company Info

Sector Consumer Defensive

Industry Grocery Stores

Employees 403000

Country United States

Visit website

📖

Full Graham Analysis

Mr. Market is currently offering The Kroger Co. at $56.61.

The business passes only 2 of 6 of Graham's defensive criteria — well below his required standard.

At $56.61, the stock trades at a 231% premium to its Graham Number of $17.09. Graham would consider this price speculative.

There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..

Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.

Showing Key Metrics

Income Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Gross Profit %	23.4%▲	23.3%•	N/A
Operating Margin %	3.6%▲	-4.6%•	N/A
Net Income %	2.5%▲	-3.9%•	N/A
Diluted EPS	1.35▲	-2.02•	N/A

Balance Sheet Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Total Assets	$50.0B	$51.4B	N/A
Total Debt	$24.7B▼	$25.2B•	N/A
Working Capital	-$3.6B▼	-$2.2B•	N/A
Years to Pay Debt	28.68	-19.09	N/A

Cash Flow Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Free Cash Flow	$1.7B▲	$29M•	N/A
Owner Earnings	$2.7B	$537M	N/A
CapEx % of Net Income	109.9%	N/A	N/A

Income Statement

	2026	2025	2024
Tax Effect Of Unusual Items	5,255	-26,765
Tax Rate For Calcs	0	0
Normalized EBITDA	2,099,000	-627,000
Total Unusual Items	23,000	-101,000
Total Unusual Items Excluding Goodwill	23,000	-101,000
Net Income From Continuing Operation Net Minority Interest	861,000	-1,320,000
Reconciled Depreciation	857,000	916,000
Reconciled Cost Of Revenue	26,467,000	25,823,000
EBITDA	2,122,000	-728,000
EBIT	1,265,000	-1,644,000
Net Interest Income	-149,000	-146,000
Interest Expense	149,000	146,000
Normalized Income	843,255	-1,245,765
Net Income From Continuing And Discontinued Operation	861,000	-1,320,000
Total Expenses	33,479,000	35,400,000
Rent Expense Supplemental	205,000	194,000
Total Operating Income As Reported	1,246,000	-1,541,000
Diluted Average Shares	631,000	655,000
Basic Average Shares	629,000	655,000
Diluted EPS	0	0
Basic EPS	0	0
Diluted NI Availto Com Stockholders	854,000	-1,320,000
Net Income Common Stockholders	854,000	-1,320,000
Net Income	861,000	-1,320,000
Minority Interests	0	-5,000
Net Income Including Noncontrolling Interests	861,000	-1,315,000
Net Income Continuous Operations	861,000	-1,315,000
Tax Provision	255,000	-475,000
Pretax Income	1,116,000	-1,790,000
Other Income Expense	19,000	-103,000
Other Non Operating Income Expenses	-4,000	-2,000
Special Income Charges	0	0	79,000
Gain On Sale Of Business	0	0	79,000
Gain On Sale Of Security	23,000	-101,000
Net Non Operating Interest Income Expense	-149,000	-146,000
Interest Expense Non Operating	149,000	146,000
Operating Income	1,246,000	-1,541,000
Operating Expense	6,877,000	9,443,000
Other Operating Expenses	5,950,000	8,467,000
Depreciation Amortization Depletion Income Statement	722,000	782,000
Depreciation And Amortization In Income Statement	722,000	782,000
Selling General And Administration	205,000	194,000
General And Administrative Expense	205,000	194,000
Rent And Landing Fees	205,000	194,000
Gross Profit	8,123,000	7,902,000
Cost Of Revenue	26,602,000	25,957,000
Total Revenue	34,725,000	33,859,000
Operating Revenue	34,725,000	33,859,000

Balance Sheet

	2026	2025	2024
Treasury Shares Number	1,303,000	1,276,000	1,194,000
Ordinary Shares Number	615,000	641,678
Share Issued	1,918,000	1,917,678
Net Debt	12,541,000	11,995,000
Total Debt	24,692,000	25,199,000
Tangible Book Value	2,524,000	3,508,000
Invested Capital	21,802,000	22,993,000
Working Capital	-3,603,000	-2,228,000
Net Tangible Assets	2,524,000	3,508,000
Capital Lease Obligations	8,817,000	9,248,000
Common Stock Equity	5,927,000	7,042,000
Total Capitalization	20,436,000	21,591,000
Total Equity Gross Minority Interest	5,936,000	7,039,000
Minority Interest	9,000	-3,000
Stockholders Equity	5,927,000	7,042,000
Gains Losses Not Affecting Retained Earnings	-635,000	-613,000
Other Equity Adjustments	-635,000	-613,000
Treasury Stock	28,113,000	26,339,000
Retained Earnings	28,850,000	28,205,000
Additional Paid In Capital	3,907,000	3,871,000
Capital Stock	1,918,000	1,918,000
Common Stock	1,918,000	1,918,000
Total Liabilities Net Minority Interest	44,017,000	44,401,000
Total Non Current Liabilities Net Minority Interest	25,909,000	26,179,000
Other Non Current Liabilities	2,169,000	2,295,000
Employee Benefits	421,000	370,000
Non Current Pension And Other Postretirement Benefit Plans	421,000	370,000
Non Current Deferred Liabilities	1,094,000	917,000
Non Current Deferred Taxes Liabilities	1,094,000	917,000
Long Term Debt And Capital Lease Obligation	22,225,000	22,597,000
Long Term Capital Lease Obligation	7,716,000	8,048,000
Long Term Debt	14,509,000	14,549,000
Current Liabilities	18,108,000	18,222,000
Other Current Liabilities	3,886,000	3,857,000
Current Debt And Capital Lease Obligation	2,467,000	2,602,000
Current Capital Lease Obligation	1,101,000	1,200,000
Current Debt	1,366,000	1,402,000
Other Current Borrowings	1,366,000	1,402,000
Payables And Accrued Expenses	11,755,000	11,763,000
Current Accrued Expenses	1,267,000	1,216,000
Payables	10,488,000	10,547,000
Accounts Payable	10,488,000	10,547,000
Total Assets	49,953,000	51,440,000
Total Non Current Assets	35,448,000	35,446,000
Other Non Current Assets	1,103,000	1,034,000
Goodwill And Other Intangible Assets	3,403,000	3,534,000
Other Intangible Assets	808,000	860,000
Goodwill	2,595,000	2,674,000
Net PPE	30,942,000	30,878,000
Accumulated Depreciation	-35,763,000
Gross PPE	66,705,000	30,878,000
Leases	15,695,000
Construction In Progress	2,820,000
Other Properties	27,812,000	30,878,000
Buildings And Improvements	16,754,000
Land And Improvements	3,624,000
Current Assets	14,505,000	15,994,000
Other Current Assets	843,000	840,000
Inventory	6,892,000	7,714,000
Inventories Adjustments Allowances	-2,553,000	-2,541,000
Other Inventories	9,445,000	10,255,000
Receivables	2,192,000	2,373,000
Accounts Receivable	2,192,000	2,373,000
Cash Cash Equivalents And Short Term Investments	4,578,000	5,067,000
Other Short Term Investments	1,244,000	1,111,000
Cash And Cash Equivalents	3,334,000	3,956,000

Cash Flow

	2026	2025	2024
Free Cash Flow	1,707,000	29,000
Repurchase Of Capital Stock	-1,758,000	-738,000
Repayment Of Debt	-360,000	-58,000
Issuance Of Debt	5,000
Issuance Of Capital Stock	2,000	17,000
Capital Expenditure	-946,000	-941,000
Interest Paid Supplemental Data	63,000	200,000
Income Tax Paid Supplemental Data	105,000	115,000
End Cash Position	3,334,000	3,956,000
Beginning Cash Position	3,956,000	4,883,000
Changes In Cash	-622,000	-927,000
Financing Cash Flow	-2,376,000	-989,000
Cash Flow From Continuing Financing Activities	-2,376,000	-989,000
Net Other Financing Charges	-39,000	-11,000
Cash Dividends Paid	-226,000	-237,000
Common Stock Dividend Paid	-226,000	-237,000
Net Common Stock Issuance	-1,756,000	-721,000
Common Stock Payments	-1,758,000	-738,000
Common Stock Issuance	2,000	17,000
Net Issuance Payments Of Debt	-355,000	-20,000
Net Long Term Debt Issuance	-355,000	-20,000
Long Term Debt Payments	-360,000	-58,000
Long Term Debt Issuance	5,000
Investing Cash Flow	-899,000	-908,000
Cash Flow From Continuing Investing Activities	-899,000	-908,000
Net Other Investing Changes	-5,000	33,000
Net Business Purchase And Sale	52,000
Sale Of Business	52,000
Net PPE Purchase And Sale	-946,000	-941,000
Purchase Of PPE	-946,000	-941,000
Operating Cash Flow	2,653,000	970,000
Cash Flow From Continuing Operating Activities	2,653,000	970,000
Change In Working Capital	728,000	-925,000
Change In Other Working Capital	-169,000	-111,000
Change In Other Current Liabilities	-79,000	-159,000
Change In Payables And Accrued Expense	-8,000	394,000
Change In Accrued Expense	106,000	-122,000
Change In Payable	-114,000	516,000
Change In Account Payable	-114,000	516,000
Change In Prepaid Assets	-32,000	20,000
Change In Inventory	810,000	-988,000
Change In Receivables	206,000	-81,000
Other Non Cash Items	24,000	61,000
Stock Based Compensation	37,000	37,000
Asset Impairment Charge	-26,000	2,596,000	13,000
Deferred Tax	192,000	-491,000
Deferred Income Tax	192,000	-491,000
Depreciation Amortization Depletion	857,000	916,000
Depreciation And Amortization	857,000	916,000
Depreciation	857,000	916,000
Operating Gains Losses	-20,000	91,000
Gain Loss On Investment Securities	-23,000	101,000
Net Income From Continuing Operations	861,000	-1,315,000

📊 Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.

Quarter vs Same Quarter Last Year

YoY strips seasonality

Revenue Growth (YoY)

Prior year: $34.3B ▲ $34.7B +1.2%

Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.

Gross Margin

Prior year: 23.1% ▲ 23.4% +0.3pp

Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.

Operating Margin

Prior year: 3.6% ▲ 3.6% -0.0pp

Graham: operating margin reflects true business economics before financing. Trend matters as much as level.

Net Margin

Prior year: 1.8% ▲ 2.5% +0.6pp

Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.

Quarterly Health Checks

3 Graham/Buffett criteria that are valid and reliable on quarterly data

✅ Adequate Size

Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.

$34.7B/qtr (≈$138.9B ann.)

vs > $1.5B annualised revenue

❌ Financial Condition

Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.

0.80x current ratio

vs ≥ 2.0x

✅ Free Cash Flow

Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.

$1.7B

vs Positive

Operating Cash Flow

$2.7B

Latest quarter · Buffett's cash reality check

ROIC

3.1%

Based on latest annual operating income

Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.

Market Cap / Net Assets

5.9x

Net Assets: $5.9B

Peers & Industry

No auto-detected peers for Grocery Stores. You can manually compare KR against any stock using the Compare tool.

"The management of a business is its most important single factor — more important than market position, patents, or financial structure."

— Benjamin Graham

Capital Allocation & Alignment

Insider Ownership

8.44%

Moderate — some alignment with shareholders

Return on Equity (ROE)

14.5%

Adequate — returns are moderate

Return on Assets (ROA)

1.7%

Poor — assets are not generating adequate returns

Share Buybacks (Latest Year)

$2.7B

Management is returning capital to shareholders via buybacks

Debt Trend YoY

-2.0% YoY

Debt is declining — management is deleveraging

Leadership Team

David John Christopher Kennerley

Executive VP & CFO

Age 51

Pay: $2,682,419

0.312% of net income

Gregory Foran

CEO & Director

Age 64

Robinson Quast CPA

Vice President of Investor Relations

Dana Zurcher

President of the Columbus Division

Top Institutional Holders

Institution	% Owned	Shares
Blackrock Inc.	8.67%	53,118,358
Berkshire Hathaway, Inc	8.16%	50,000,000
Vanguard Capital Management LLC	5.95%	36,423,947
Vanguard Portfolio Management LLC	5.17%	31,655,062
State Street Corporation	4.97%	30,450,904
Wellington Management Group, LLP	3.83%	23,470,023
Geode Capital Management, LLC	2.61%	15,981,614
Franklin Resources, Inc.	2.48%	15,221,187

⚠️ Very high debt-to-equity — leverage risk

⚠️ Current ratio below 1 — liquidity risk

Risk Analysis

Beta (Market Risk)

0.42

Low volatility — more stable than the market

Short Interest

5.1% of float

Moderate short interest

Debt-to-Equity

4.16x

High leverage — significant financial risk

Current Ratio

0.80x

Weak liquidity — current liabilities exceed current assets

52-Week Price Range

Low: $56.32 Current: $56.61 High: $76.58

Currently at 1% of 52-week range

The Kroger Co.

Metric Explanations

Full Graham Analysis

Income Highlights

Balance Sheet Highlights

Cash Flow Highlights

Quarter vs Same Quarter Last Year

Quarterly Health Checks

Operating Cash Flow

ROIC

Market Cap / Net Assets

Peers & Industry

Capital Allocation & Alignment

Leadership Team

Top Institutional Holders

Risk Analysis