Fresh Prospects: KR 1Q Preview

Research evidence excerpt

Fresh Prospects: KR 1Q Preview

Deutsche Bank

Research

Rating Company Date

Buy Kroger Co. 17 June 2026

North America Reuters Bloomberg Rating Buy

United States KR.N KR US Price target (USD) 79.00 Price at 16 Jun 26 64.13

52-week range 75.60 – 59.28

Consumer

Retailing / Food & Drug Chains Valuation & Risks

Krisztina Katai

While we expect relatively in-line 1Q results, the key question into earnings is Research Analyst

+1-212-250-0590 whether KR will reduce its EPS outlook on the back of greater price investments

or if its operational and pricing agenda can be funded internally. Our view is that Jessica Taylor

FY guidance will be maintained; however, 1Q will likely not settle the debate. Research Associate

+1-212-250-3165

From our perspective, KR has multiple levers to fund its pricing agenda internally.

These include redeploying the ~$400M of e-commerce cost savings realized last Nick Breckenridge

year, securing incremental vendor support through pricing renegotiations, Research Associate

+1-212-250-9179 establishing direct sourcing, rationalizing SKU breadth, and optimizing the store

base via closures of underperforming locations. In parallel, we expect CEO Greg

Foran to emphasize operational execution, with a focus on improving in-stocks,

elevating store standards, and enhancing perishables quality.

Importantly, we do not believe KR is attempting to fully close the price gap versus

big-box peers (e.g., WMT and COST). Rather, we see a more targeted effort to

sharpen its hi-lo pricing architecture, with the goal of driving improved

competitiveness and recapturing share from other hi-lo operators and

independent grocers.

While pricing investment will be the primary focal point, we are also monitoring

several other drivers including underlying volume trends, the impact of