The Kroger Co. operates in the food retailing industry, which is characterized by the proliferation of local, regional, and national retailers, including both retail and digital formats, and intense and ever-increasing competition ranging from online retailers, mass merchants, club stores, regional chains, deep discounters, dollar stores, and ethnic, specialty and natural food stores. The industry continues to be shaped by e-commerce, cooking at home and prepared foods to go and other customer needs and preferences. Kroger is a leading grocery retailer, serving approximately 63 million households annually ¹, and over 95% of customer transactions are tethered to a Kroger loyalty card ².

Primary competitors named in the filing include online retailers, mass merchants, club stores, regional chains, deep discounters, dollar stores, and ethnic, specialty and natural food stores. The peer group used for the performance graph consists of Albertsons Companies, Inc., Costco Wholesale Corporation, CVS Health Corporation, Koninklijke Ahold Delhaize N.V., Target Corporation, Walgreens Boots Alliance Inc., and Walmart Inc. Kroger's competitive advantages include its rewards program, over 20 years of investment in data science capabilities, and its ecosystem that monetizes traffic and data insights to create fast-growing, asset-light and margin-rich revenue streams.

Kroger generates revenue predominately by selling consumer products to customers in its stores and fuel centers and via its online platforms. The company earns income by selling products at price levels that produce revenues in excess of the costs incurred to make these products available to customers, including procurement and distribution costs, facility occupancy and operational costs, and overhead expenses. Revenues are predominately earned and cash is generated as consumer products are sold. The company utilizes data and traffic generated by its retail business to create personalized experiences and value for customers, which also enables its fast-growing, high operating margin alternative profit business, including third-party media revenue.

As of January 31, 2026, Kroger operated 2,697 supermarkets ³, of which 2,250 had pharmacies ⁴ and 1,731 had fuel centers ⁵. Approximately 51% of supermarkets were operated in Company-owned facilities ⁶. Kroger offers Pickup and Harris Teeter ExpressLane at 2,408 of its supermarkets ⁷ and provides Delivery solutions to substantially all customers. Kroger Precision Marketing, the retail media business, leverages first-party data to provide targeted, measurable advertising solutions for consumer-packaged goods companies. Our Brands represented over $39 billion of sales in 2025 ⁸. The company owned 33 food production plants ⁹ as of January 31, 2026, consisting of 14 dairies ¹⁰, nine deli or bakery plants ¹¹, five grocery product plants ¹², two beverage plants ¹³, one meat plant ¹⁴ and two cheese plants ¹⁵.

Kroger's supermarkets stock on average over 13,000 private label items ¹⁶. Our Brands products are produced and sold in three tiers: Private Selection (premium quality), The Kroger brand (majority of private label items), and Smart Way (value brand), along with the Simple Truth brand for natural and organic products. Approximately 20% of Our Brands units sold in supermarkets are produced in the company's food production plants ¹⁷. Fuel centers typically include four to nine islands of fuel dispensers and storage tanks with capacity for 35,000 to 50,000 gallons of fuel ¹⁸.

During 2025, Kroger paid two quarterly cash dividends of $0.32 per share ¹⁹ and two quarterly cash dividends of $0.35 per share ²⁰. During 2024, the company paid two quarterly cash dividends of $0.29 per share ²¹ and two quarterly cash dividends of $0.32 per share ²². On December 23, 2025, the Board of Directors approved a $2.0 billion share repurchase program ²³ (the December 2025 Repurchase Program), incremental to the existing December 2024 Repurchase Program. On December 11, 2024, the Board approved a $7.5 billion share repurchase program ²⁴ (the December 2024 Repurchase Program). In 2025, Kroger spent approximately $183 million on training associates ²⁵. The company increased associate wages, resulting in an average hourly rate of more than $20 ²⁶, and a rate of more than $26 with comprehensive benefits factored in ²⁷, which is a 43% increase in rate in the last eight years ²⁸.

Total revenues for fiscal 2025 were $147.163 billion ²⁹, compared to $147.104 billion ³⁰ in fiscal 2024. Net earnings attributable to The Kroger Co. were $2.270 billion ³¹ in 2025, compared to $2.356 billion ³² in 2024. Diluted earnings per share were $3.13 ³³ in 2025 versus $3.26 ³⁴ in 2024. FIFO operating profit was $5.066 billion ³⁵ in 2025, compared to $5.010 billion ³⁶ in 2024. Net cash provided by operating activities was $6.807 billion ³⁷ in 2025, compared to $6.312 billion ³⁸ in 2024.

Kroger's growth strategy is focused on growing households and increasing customer loyalty by delivering great value and convenience, and investing in Fresh, Our Brands, Personalization and eCommerce. The company intends to continue investing in new store growth as a key driver of long-term value creation, expecting new store development to contribute to improved return on invested capital, volume growth and stronger market share performance. Kroger believes its retail media business represents a significant and growing opportunity, and the company intends to continue investing in the technology, talent, and collaborations needed to grow this business and expand the range of solutions offered to advertisers.

Kroger's alternative profit business, including Kroger Precision Marketing, is a key contributor to the company's strategy, focusing on generating revenue from assets and capabilities that complement the core grocery business. The retail media business carries an attractive margin profile relative to traditional operations and is an important driver of digital profitability. The company expects to make continued associate investments in 2026.

The filing does not contain specific margin or cost outlook figures or targets.

Kroger expects to continue investing in new store growth and in technology, talent, and collaborations to grow its retail media business. The company continues to invest in new platforms and applications to make learning more accessible to associates. Kroger expects to make continued associate investments in 2026.

The filing does not specify R&D spending levels, capital expenditure plans, or share repurchase authorization amounts beyond the $7.5 billion December 2024 Repurchase Program and the $2.0 billion December 2025 Repurchase Program already disclosed. The company currently expects to continue to pay comparable cash dividends on a quarterly basis, that will increase over time, depending on earnings and other factors, including approval by the Board.

The filing identifies several headwinds and constraints, including labor negotiations and potential work stoppages, changes in the unemployment rate, pressures in the labor market, pricing and promotional activities of competitors, the state of the economy including interest rates and inflationary trends, changes in tariffs, fuel cost volatility, and the uncertainty of economic growth or recession. The company also faces risks related to the outcome of litigation matters, including those relating to the terminated transaction with Albertsons Companies, Inc.

The filing notes that the operating environment for the food retailing industry continues to be characterized by intense and ever-increasing competition. Evolving customer preferences and the advancement of online, delivery, ship to home and mobile channels have increased competition. The emergence of artificial intelligence-powered agentic shopping tools could further disrupt traditional grocery retail. If customers increasingly delegate purchasing decisions to AI agents that prioritize price, speed or other factors over retailer preference or brand loyalty, Kroger could become disintermediated from the customer relationship.

Management's message emphasizes that Kroger is built on the foundation of its retail grocery business, which includes the added convenience of retail pharmacies and fuel centers. The strategy is focused on growing households and increasing customer loyalty by delivering great value and convenience, and investing in Fresh, Our Brands, Personalization and eCommerce. Management highlights that the company utilizes data and traffic generated by its retail business to create personalized experiences and value for customers, which also enables fast-growing, high operating margin alternative profit businesses, including third-party media revenue. The value generated from these businesses enables reinvestment back into the retail business. Management states that Kroger intends to continue investing in new store growth as a key driver of long-term value creation, and expects new store development to contribute to improved return on invested capital, volume growth and stronger market share performance. The company believes its retail media business represents a significant and growing opportunity and intends to continue investing in the technology, talent, and collaborations needed to grow this business.

Total revenues for fiscal 2025 were $147.163 billion ⁴⁰, compared to $147.104 billion ⁴¹ in fiscal 2024. Net earnings attributable to The Kroger Co. were $2.270 billion ⁴² in 2025, compared to $2.356 billion ⁴³ in 2024. Diluted earnings per share were $3.13 ⁴⁴ in 2025 versus $3.26 ⁴⁵ in 2024. FIFO operating profit was $5.066 billion ⁴⁶ in 2025, compared to $5.010 billion ⁴⁷ in 2024. Net cash provided by operating activities was $6.807 billion ⁴⁸ in 2025, compared to $6.312 billion ⁴⁹ in 2024. Total debt, including finance lease obligations, was $14.602 billion ⁵⁰ as of January 31, 2026, compared to $14.448 billion ⁵¹ as of February 1, 2025. Cash and cash equivalents were $1.654 billion ⁵² as of January 31, 2026, compared to $1.418 billion ⁵³ as of February 1, 2025. The company's net total debt to EBITDA ratio was 1.82 ⁵⁴ for 2025, compared to 1.85 ⁵⁵ for 2024. FIFO gross margin rate was 22.3% ⁵⁶ in 2025, compared to 22.2% ⁵⁷ in 2024. The LIFO charge was $0.1 billion ⁵⁸ in 2025, compared to $0.1 billion ⁵⁹ in 2024. Operating, general and administrative expenses as a percentage of sales were 17.8% ⁶⁰ in 2025, compared to 17.7% ⁶¹ in 2024.

Kroger faces intense competition from a wide range of retailers including online retailers, mass merchants, club stores, deep discounters, and dollar stores, and if the company fails to meet evolving customer preferences or adapt to digital and AI-driven shopping trends, its sales and profitability could be adversely affected. More than two-thirds of associates are covered by approximately 350 collective bargaining agreements ³⁹, and work stoppages or inability to control healthcare, pension, and wage costs could materially affect operations. The company contributes to several multi-employer pension plans where the present value of actuarially accrued liabilities exceeds assets held in trust, and Kroger expects contributions to most of these funds will increase over the next few years, which could adversely affect financial condition. Kroger is subject to various legal proceedings, including opioid litigation and litigation with Albertsons, and adverse outcomes could result in substantial losses. The company's business is increasingly dependent on complex information technology systems, and cybersecurity threats or data breaches could result in loss of customer or business information, negative publicity, and exposure to claims, with the company unable to guarantee that its security systems will successfully defend against cyberattacks.