Kroger Lowers Full-Year Sales Outlook Amid Pharmacy Headwinds and Cyclospora Outbreak
Kroger reported modest second-quarter identical sales growth of just 0.2% excluding fuel, citing several challenges including pharmacy headwinds from the Inflation Reduction Act, a Cyclospora produce outbreak, egg deflation, and cautious consumer spending. Despite these pressures, Kroger maintained its full-year adjusted FIFO operating-profit guidance between $5 billion to $5.2 billion and EPS guidance of $5.10–$5.30 due to improved gross margins and cost-saving initiatives. The company lowered its full-year identical-sales outlook from 1%–2% to a narrower range of 0.2%–0.8%, reflecting ongoing challenges expected through the remainder of the year, including lingering Cyclospora effects in Q3 and increased pharmacy-related sales impact in Q4 due to new high-cost drugs like GLP-1 medications being added to formularies. Kroger highlighted continued growth drivers such as e-commerce (up 20%), retail media revenue (up 24%), and private-label products (over 14% increase). The company also repurchased $1.2 billion in shares during the first half of the year, while its pending Giant Eagle acquisition is expected to close by 2027.
Tickers: $KR
Topics: cyclospora_outbreak guidance_update pharmacy_headwinds retail sales_performance