The Kroger outlook for fiscal 2026 remained unchanged on October 20, 2026, with the grocer reaffirming identical sales growth excluding fuel of 0.2%–0.8%, free cash flow of $2.7 billion–$2.9 billion and capital spending of $3.8 billion–$4.0 billion. The reaffirmation preserves a sales forecast that management lowered in September, rather than signaling an upgrade.
Key Takeaways
- Kroger maintained its fiscal 2026 sales, free cash flow and capital spending forecasts.
- Second-quarter adjusted earnings per share rose despite slower identical sales growth.
- Further dividend increases remain subject to board approval, while remaining authorized buybacks are expected by fiscal year-end.
Table of Contents
- Kroger outlook retains the lower sales growth range
- Quarterly earnings improved despite slower sales growth
- Dividend growth and buybacks remain part of capital plans
- Conclusion
Kroger outlook retains the lower sales growth range
Kroger’s second-quarter 2026 results and guidance, released September 11, established the current identical sales growth range excluding fuel. Management reduced that forecast from 1.0%–2.0% while keeping its adjusted earnings and operating profit targets unchanged.
The sales outlook includes an approximately 140-basis-point unfavorable impact from the Inflation Reduction Act. Chief Financial Officer David Kennerley cited first-half results and the macroeconomic environment when explaining the September reduction.
The October reaffirmation leaves the company targeting modest sales growth alongside continued investment. These are management forecasts for the full fiscal year, not completed results.
| Item | Details |
|---|---|
| Fiscal 2026 adjusted EPS guidance | $5.10–$5.30, maintained in the September 11 outlook. |
| Fiscal 2026 adjusted FIFO operating profit guidance | $5.0 billion–$5.2 billion, maintained in the September 11 outlook. |
| Second-quarter dividend declared | $0.39 per common share, versus $0.35 a year earlier. |
| Net total debt to adjusted EBITDA | 1.91 at second-quarter end, compared with 1.63 a year earlier. |
Quarterly earnings improved despite slower sales growth
For the second quarter ended August 15, 2026, identical sales excluding fuel increased 0.2%, compared with 3.4% a year earlier. Total company sales reached $34.6 billion, up from $33.9 billion.
Adjusted earnings per share rose to $1.09 from $1.04, while reported earnings per share increased to $1.05 from $0.91. Kennerley attributed adjusted earnings growth to cost savings, strong pharmacy and fuel performance, and improved eCommerce profitability.
The earnings improvement was not uniform across operating measures: adjusted first-in, first-out operating profit declined to $1.076 billion from $1.091 billion. Chief Executive Officer Greg Foran said improving sales momentum remained a top priority.
Dividend growth and buybacks remain part of capital plans
Kroger said in September that it had increased its dividend by 11%, marking its 20th consecutive year of increases. The company expects to continue quarterly payments and increase them over time, subject to board approval; that intention does not guarantee future payouts.
The grocer repurchased $1.0 billion of shares in the second quarter, bringing fiscal year-to-date repurchases to $1.2 billion. About $800 million remained under its December 2025 authorization at quarter-end.
Kroger also reiterated its commitment to investing in the business and maintaining its investment-grade debt rating. Cash generation therefore supports several priorities, rather than dividends alone.
Conclusion
The unchanged outlook keeps attention on sales execution and cash generation. Kroger’s stated next capital-return milestone is completing the remaining authorized share repurchases by the end of fiscal 2026.
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