Kroger (KR) Delivers Strong Sales but Weaker Margins, Says BMO Capital

The Kroger Co. (NYSE:KR) is included among the Top 12 Dividend Stocks to Buy According to Billionaire Cliff Asness.

Kroger (KR) Delivers Strong Sales but Weaker Margins, Says BMO Capital

On June 19, BMO Capital lowered its price recommendation on The Kroger Co. (NYSE:KR) to $60 from $70. It reiterated a Market Perform rating following the company’s first-quarter results. The firm said grocery sales came in stronger than expected, but margins were weaker. BMO also noted that Kroger’s guidance is more heavily weighted toward the second half of the year than anticipated because of a softer second quarter. In a research note, the analyst said BMO expects “continued quarterly choppiness” and believes Kroger is still in the early stages of its turnaround efforts.

During the company’s Q1 2026 earnings call, CEO and Director Gregory Foran said Kroger delivered 1% identical sales growth, excluding fuel. The increase was driven by strong performance in e-commerce, Fresh, and the company’s private-label brands.

Foran also said that Kroger’s e-commerce business, including its media operations, became profitable during the quarter.

Executive Vice President and CFO David John Kennerley said the company continued to invest in competitive pricing in a disciplined way. He added that these investments were fully funded through cost-saving initiatives while Kroger maintained a strong focus on margin performance.

The Kroger Co. (NYSE:KR) is a food and drug retailer that operates supermarkets, multi-department stores, and fulfillment centers across the United States.

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