Adjusted EPS grew 12% year-over-year to $1.04, the strongest growth rate since 2023.
Adjusted FIFO operating profit was $1.1 billion for the quarter.
E-commerce sales grew 16%, driven by increased households and order frequency, with delivery sales surpassing pickup sales for the first time.
Excluding the pharmacy mix and sale impact, FIFO gross margin rate decreased 9 basis points, in line with expectations to remain margin neutral.
FIFO gross margin rate increased 39 basis points year-over-year, primarily due to the sale of Kroger Specialty Pharmacy and lower supply chain costs.
Fuel sales and profitability declined due to lower retail prices and fewer gallons sold, with expectations for continued lower gallons sold through 2025.
Identical sales without fuel grew 3.4%, marking the sixth consecutive quarter of improvement.
Operating general and administrative (OG&A) rate improved, decreasing 5 basis points year-over-year, and 41 basis points on an underlying basis after adjustments.
Adjusted gross margin contracted 160 basis points to 61.7%, impacted by $9 million in additional tariffs despite mitigation efforts.
Adjusted net earnings per share were $1.26, slightly above guidance.
Adjusted operating profit was $28 million (7% margin), down from $57 million (13.5% margin) in prior year due to investments and challenging environment.
Adjusted SG&A expenses increased 5% to $224 million, driven by new store openings and higher employment and occupancy costs.
Consolidated net sales were $403 million in Q2 2025, down from $420 million in Q2 2024, near the midpoint of guidance ($395M-$415M).
Inventory increased 19% on LIFO basis, primarily due to tariff-related accelerated purchases and capitalized costs.
Long-term debt was $81 million, up from $31 million at fiscal 2024-end, reflecting capital expenditures and share repurchases.
Total company comparable sales declined 5% in Q2, consistent with guidance.
Dafinchi
