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 Margin2.8%
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 Margin1.9%
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
F
Years to Pay Off Debt37.7 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-$19.4B
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-$5.5B
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.
Valuation
F
Margin of Safety0.0%
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book6.09x
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Cash Flow
C
Free Cash Flow$167M
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 Income178.5%
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.
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.
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.
Metric Explanations
What each dimension measures and where the thresholds come from.
Gross Profit Margin
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
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
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.
Years to Pay Off Debt
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
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
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.
Margin of Safety
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Free Cash Flow
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
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
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.
Mr. Market is currently offering The Kroger Co. at $59.69.
The business passes only 2 of 6 of Graham's defensive criteria — well below his required standard.
At $59.69, the stock trades at a 292% premium to its Graham Number of $15.21. 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
Q3 2026
Q4 2025
Gross Profit %
22.7%▼
23.3%
Operating Margin %
2.8%▲
-4.6%
Net Income %
1.9%▲
-3.9%
Diluted EPS
1.05▲
-2.02
Balance Sheet Highlights
Metric
Q3 2026
Q4 2025
Total Assets
$49.5B
$51.4B
Total Debt
$24.2B▼
$25.2B
Working Capital
-$5.5B▼
-$2.2B
Years to Pay Debt
37.69
-19.09
Cash Flow Highlights
Metric
Q3 2026
Q4 2025
Free Cash Flow
$167M▲
$29M
Owner Earnings
$2.7B
$537M
CapEx % of Net Income
178.5%
N/A
Income Statement
2026
2025
Tax Effect Of Unusual Items
8,024
-26,765
Tax Rate For Calcs
0
0
Normalized EBITDA
1,834,000
-627,000
Total Unusual Items
34,000
-101,000
Total Unusual Items Excluding Goodwill
34,000
-101,000
Net Income From Continuing Operation Net Minority Interest
641,000
-1,320,000
Reconciled Depreciation
872,000
916,000
Reconciled Cost Of Revenue
26,628,000
25,823,000
EBITDA
1,868,000
-728,000
EBIT
996,000
-1,644,000
Net Interest Income
-156,000
-146,000
Interest Expense
156,000
146,000
Normalized Income
615,024
-1,245,765
Net Income From Continuing And Discontinued Operation
641,000
-1,320,000
Total Expenses
33,650,000
35,400,000
Rent Expense Supplemental
198,000
194,000
Total Operating Income As Reported
971,000
-1,541,000
Diluted Average Shares
608,000
655,000
Basic Average Shares
606,000
655,000
Diluted EPS
0
0
Basic EPS
0
0
Diluted NI Availto Com Stockholders
641,000
-1,320,000
Net Income Common Stockholders
641,000
-1,320,000
Net Income
641,000
-1,320,000
Minority Interests
-1,000
-5,000
Net Income Including Noncontrolling Interests
642,000
-1,315,000
Net Income Continuous Operations
642,000
-1,315,000
Tax Provision
198,000
-475,000
Pretax Income
840,000
-1,790,000
Other Income Expense
25,000
-103,000
Other Non Operating Income Expenses
-9,000
-2,000
Gain On Sale Of Security
34,000
-101,000
Net Non Operating Interest Income Expense
-156,000
-146,000
Interest Expense Non Operating
156,000
146,000
Operating Income
971,000
-1,541,000
Operating Expense
6,887,000
9,443,000
Other Operating Expenses
5,952,000
8,467,000
Depreciation Amortization Depletion Income Statement
737,000
782,000
Depreciation And Amortization In Income Statement
737,000
782,000
Selling General And Administration
198,000
194,000
General And Administrative Expense
198,000
194,000
Rent And Landing Fees
198,000
194,000
Gross Profit
7,858,000
7,902,000
Cost Of Revenue
26,763,000
25,957,000
Total Revenue
34,621,000
33,859,000
Operating Revenue
34,621,000
33,859,000
Balance Sheet
2026
2025
Treasury Shares Number
1,276,000
Ordinary Shares Number
616,561
641,678
Share Issued
616,561
1,917,678
Net Debt
13,691,000
11,995,000
Total Debt
24,158,000
25,199,000
Tangible Book Value
2,368,000
3,508,000
Invested Capital
21,207,000
22,993,000
Working Capital
-5,492,000
-2,228,000
Net Tangible Assets
2,368,000
3,508,000
Capital Lease Obligations
8,791,000
9,248,000
Common Stock Equity
5,840,000
7,042,000
Total Capitalization
19,755,000
21,591,000
Total Equity Gross Minority Interest
5,846,000
7,039,000
Minority Interest
6,000
-3,000
Stockholders Equity
5,840,000
7,042,000
Gains Losses Not Affecting Retained Earnings
-618,000
-613,000
Other Equity Adjustments
-618,000
-613,000
Treasury Stock
29,382,000
26,339,000
Retained Earnings
29,947,000
28,205,000
Additional Paid In Capital
3,975,000
3,871,000
Capital Stock
1,918,000
1,918,000
Common Stock
1,918,000
1,918,000
Total Liabilities Net Minority Interest
43,645,000
44,401,000
Total Non Current Liabilities Net Minority Interest
25,227,000
26,179,000
Other Non Current Liabilities
1,978,000
2,295,000
Employee Benefits
409,000
370,000
Non Current Pension And Other Postretirement Benefit Plans
409,000
370,000
Non Current Deferred Liabilities
1,184,000
917,000
Non Current Deferred Taxes Liabilities
1,184,000
917,000
Long Term Debt And Capital Lease Obligation
21,656,000
22,597,000
Long Term Capital Lease Obligation
7,741,000
8,048,000
Long Term Debt
13,915,000
14,549,000
Current Liabilities
18,418,000
18,222,000
Other Current Liabilities
3,935,000
3,857,000
Current Debt And Capital Lease Obligation
2,502,000
2,602,000
Current Capital Lease Obligation
1,050,000
1,200,000
Current Debt
1,452,000
1,402,000
Other Current Borrowings
1,452,000
1,402,000
Payables And Accrued Expenses
11,981,000
11,763,000
Current Accrued Expenses
1,206,000
1,216,000
Payables
10,775,000
10,547,000
Accounts Payable
10,775,000
10,547,000
Total Assets
49,491,000
51,440,000
Total Non Current Assets
36,565,000
35,446,000
Other Non Current Assets
1,075,000
1,034,000
Goodwill And Other Intangible Assets
3,472,000
3,534,000
Other Intangible Assets
848,000
860,000
Goodwill
2,624,000
2,674,000
Net PPE
32,018,000
30,878,000
Accumulated Depreciation
Gross PPE
32,018,000
30,878,000
Leases
Construction In Progress
Other Properties
32,018,000
30,878,000
Buildings And Improvements
Land And Improvements
Current Assets
12,926,000
15,994,000
Other Current Assets
721,000
840,000
Inventory
7,282,000
7,714,000
Inventories Adjustments Allowances
-2,644,000
-2,541,000
Other Inventories
9,926,000
10,255,000
Receivables
2,187,000
2,373,000
Accounts Receivable
2,187,000
2,373,000
Cash Cash Equivalents And Short Term Investments
2,736,000
5,067,000
Other Short Term Investments
1,060,000
1,111,000
Cash And Cash Equivalents
1,676,000
3,956,000
Cash Flow
2026
2025
Free Cash Flow
167,000
29,000
Repurchase Of Capital Stock
-1,058,000
-738,000
Repayment Of Debt
-45,000
-58,000
Issuance Of Debt
Issuance Of Capital Stock
6,000
17,000
Capital Expenditure
-1,144,000
-941,000
Interest Paid Supplemental Data
109,000
200,000
Income Tax Paid Supplemental Data
120,000
115,000
End Cash Position
1,676,000
3,956,000
Beginning Cash Position
2,873,000
4,883,000
Changes In Cash
-1,197,000
-927,000
Financing Cash Flow
-1,368,000
-989,000
Cash Flow From Continuing Financing Activities
-1,368,000
-989,000
Net Other Financing Charges
-55,000
-11,000
Cash Dividends Paid
-216,000
-237,000
Common Stock Dividend Paid
-216,000
-237,000
Net Common Stock Issuance
-1,052,000
-721,000
Common Stock Payments
-1,058,000
-738,000
Common Stock Issuance
6,000
17,000
Net Issuance Payments Of Debt
-45,000
-20,000
Net Long Term Debt Issuance
-45,000
-20,000
Long Term Debt Payments
-45,000
-58,000
Long Term Debt Issuance
Investing Cash Flow
-1,140,000
-908,000
Cash Flow From Continuing Investing Activities
-1,140,000
-908,000
Net Other Investing Changes
4,000
33,000
Net Business Purchase And Sale
Sale Of Business
Net PPE Purchase And Sale
-1,144,000
-941,000
Purchase Of PPE
-1,144,000
-941,000
Operating Cash Flow
1,311,000
970,000
Cash Flow From Continuing Operating Activities
1,311,000
970,000
Change In Working Capital
-335,000
-925,000
Change In Other Working Capital
-11,000
-111,000
Change In Other Current Liabilities
-158,000
-159,000
Change In Payables And Accrued Expense
-210,000
394,000
Change In Accrued Expense
357,000
-122,000
Change In Payable
-567,000
516,000
Change In Account Payable
-567,000
516,000
Change In Prepaid Assets
174,000
20,000
Change In Inventory
-42,000
-988,000
Change In Receivables
-88,000
-81,000
Other Non Cash Items
58,000
61,000
Stock Based Compensation
44,000
37,000
Asset Impairment Charge
47,000
2,596,000
Deferred Tax
43,000
-491,000
Deferred Income Tax
43,000
-491,000
Depreciation Amortization Depletion
872,000
916,000
Depreciation And Amortization
872,000
916,000
Depreciation
872,000
916,000
Operating Gains Losses
-60,000
91,000
Gain Loss On Investment Securities
-34,000
101,000
Net Income From Continuing Operations
642,000
-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: $33.9B▲ $34.6B+2.0%
Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.
Gross Margin
Prior year: 23.0%▲ 22.7%-0.3pp
Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.
Operating Margin
Prior year: 2.9%▲ 2.8%-0.1pp
Graham: operating margin reflects true business economics before financing. Trend matters as much as level.
Net Margin
Prior year: 1.8%▲ 1.9%+0.1pp
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.
$34.6B/qtr (≈$138.5B ann.)
vs > $1.5B annualised revenue
❌ Financial Condition
Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.
0.70x 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.
$167M
vs Positive
Operating Cash Flow
$1.3B
Latest quarter · Buffett's cash reality check
ROIC
2.5%
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
6.1x
Net Assets: $5.8B
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
6.87%
Moderate — some alignment with shareholders
Return on Equity (ROE)
11.0%
Adequate — returns are moderate
Return on Assets (ROA)
1.3%
Poor — assets are not generating adequate returns
Share Buybacks (Latest Year)
$2.7B
Management is returning capital to shareholders via buybacks
Debt Trend YoY
-0.1% YoY
Debt is declining — management is deleveraging
Leadership Team
Ronald Sargent
Non-Executive Chairman
Age 69
Pay: $4,066,469
0.634% of net income
David John Christopher Kennerley
Executive VP & CFO
Age 51
Pay: $2,682,419
0.418% of net income
Michael Marx
Senior Vice President of Retail Divisions
Colleen Lindholz
President of Kroger Health
Scott Hays
President of the Cincinnati/Dayton Division
Top Institutional Holders
Institution
% Owned
Shares
Blackrock Inc.
8.87%
54,330,207
Berkshire Hathaway, Inc
6.37%
39,000,000
Vanguard Capital Management LLC
5.80%
35,522,344
Vanguard Portfolio Management LLC
5.05%
30,961,732
State Street Corporation
4.77%
29,233,695
Wellington Management Group, LLP
2.76%
16,920,677
FMR, LLC
2.71%
16,603,705
Geode Capital Management, LLC
2.57%
15,753,578
⚠️Very high debt-to-equity — leverage risk
⚠️Current ratio below 1 — liquidity risk
Risk Analysis
Beta (Market Risk)
0.41
Low volatility — more stable than the market
Short Interest
4.7% of float
Low short interest — market is not heavily bearish
Debt-to-Equity
4.13x
High leverage — significant financial risk
Current Ratio
0.70x
Weak liquidity — current liabilities exceed current assets
52-Week Price Range
Low: $54.15Current: $59.69High: $76.58
Currently at 25% of 52-week range
The Kroger Co. (KR) fundamental analysis — Overall grade F based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: $15.21. Margin of safety: 0%. Gross profit margin: 22.7%. Operating margin: 2.8%. Net margin: 1.9%. Market cap: $35.6B. Sector: Consumer Defensive. Industry: Grocery Stores. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
Disclaimer: 360investing is provided for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice. All data is sourced from public third-party providers
and may be delayed, inaccurate, or incomplete. Past performance is not indicative of future results. Analysis, scores, and valuations are algorithmic and do not represent professional investment recommendations. Always conduct your own due
diligence and consult a qualified financial adviser before making any investment decision. Use of this tool constitutes acceptance that 360investing and its operators bear no liability for decisions made based on information presented here.