Kroger CEO Greg Foran attended his first quarterly earnings call since taking the reins in February, and the results were good-to-mixed.
The country’s largest traditional supermarket chain reported first-quarter sales of $46.1 billion, topping Wall Street expectations and posting year-over-year growth. However, investors focused instead on mounting cost pressures and slowing consumer spending trends that sent shares lower following the earnings release.
The Cincinnati, OH-based grocer generated adjusted earnings of $1.58 per share, roughly in line with analyst expectations, while identical sales excluding fuel increased 1%. Management maintained its full-year outlook, calling for identical sales growth of 1% to 2% and adjusted earnings per share of $5.10 to $5.30.
Despite the convincing top-line performance, Kroger’s gross margin slipped to 22.7% from 23% a year ago. The company cited higher transportation and fuel costs, planned price investments, and unfavorable category mix as factors weighing on profitability. Those pressures were partially offset by improved e-commerce profitability, sourcing efficiencies, and favorable pharmacy performance.
CEO Foran noted consumers remain under pressure and are increasingly shopping promotions rather than filling complete baskets. “We’re getting too many promotional trips and not enough of the full basket,” Foran said, describing a shopper who is becoming more selective amid rising living costs.
Foran’s comments echo themes emerging across the grocery industry.
Food inflation accelerated slightly in May, particularly in categories such as beverages, bakery products, fruits and vegetables, while retailers continue competing aggressively on price. Kroger said it plans broad price reductions across thousands of items in an effort to defend market share against rivals including Walmart and Costco.
One bright spot was digital. Kroger reported continued improvement in e-commerce profitability, a closely watched metric as grocers seek to balance online growth with the higher fulfillment costs associated with digital orders. The company has also continued investing in private brands, retail media and other alternative profit streams designed to improve long-term margins.
Ultimately, Kroger’s results illustrate the challenge facing much of the supermarket industry in 2026. Sales remain resilient, but transportation costs, competitive pricing pressure and value-seeking consumers are making profitable growth increasingly difficult. For operators across the Northeast, the report is another reminder that driving traffic is no longer enough; the bigger challenge is converting those trips into larger baskets without sacrificing margin.
