Kroger Co (NYSE:KR) stock rose 3.84% (As on March 6, 11:22:00 AM UTC-4, Source: Google Finance) after the company reported its fourth quarter financial results, with earnings surpassing Wall Street expectations, even as the food retailer’s revenue slightly lagged estimates. Adjusted EBITDA fell short of expectations, totaling $1.34 billion compared with the anticipated $1.94 billion, representing a margin of 3.9%, down from estimates. Same-store sales increased 2.4% year over year, in line with the prior-year period, and operating margin held steady at 3.6%. Free cash flow margin improved to 4.8%, up from 1.5% in the fourth quarter of 2024. The company recorded over $16 billion in eCommerce sales for 2025 and completed a strategic review of its eCommerce operations, projecting $400 million in operating profit improvements for 2026. Adjusted eCommerce sales increased 20% for the quarter.

Moreover, Kroger also highlighted its alternative profit businesses, which generated $1.5 billion in operating profit, and ongoing capital returns, including a $7.5 billion share repurchase authorization, with $5 billion executed through an accelerated program and an additional $2.5 billion in open-market transactions. The board approved an additional $2 billion share repurchase authorization. The company has appointed Greg Foran as Chief Executive Officer. Kroger’s net total debt to adjusted EBITDA ratio is 1.76, compared to 1.79 a year ago. The company’s net total debt to adjusted EBITDA ratio target range is 2.30 to 2.50.

KR in the fourth quarter of FY25 has reported the adjusted earnings per share of $1.28, beating the analysts’ estimates for the adjusted earnings per share of $1.2. The company had reported the adjusted revenue growth of 1.2 percent to $34.73 billion in the fourth quarter of FY25, missing the analysts’ estimates for revenue by 1.09%. Gross margin was 23.1% of sales for the fourth quarter compared to 22.7% for the same period last year. The result was primarily attributable to sourcing improvements, lower supply chain costs, better fuel margins, decreased depreciation, and lower shrink, partially offset by price investments and the mix effect from growth in pharmacy sales, which has lower margins. The Operating, General and Administrative rate, excluding fuel and adjustment items, increased 21 basis points compared to the same period last year. The increase in rate was primarily attributable to cycling real estate gains from a year ago and labor investments to improve the customer experience, partially offset by lower incentive plan costs and improved productivity.