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KR, Kroger Company (The)

Kroger runs supermarkets across the United States, selling groceries and household goods to ordinary shoppers. It operates a stable of regional store banners, fuel centers at many locations, and in-store pharmacies, and it sells a wide range of its own private-label "Our Brands" goods alongside name brands. The money comes from the markup between what it pays suppliers and what shoppers pay at the register, a markup that is thin by the nature of selling food.

We utilize the data and traffic generated by our retail business to create personalized experiences and value for our customers.

Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores and fuel centers and via our online platforms.

Latest annual: FY2026 10-K

KR · Kroger Company (The)

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2026

$147.6B

+0.4% YoY · 2% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $148.6B 5-yr avg $146.2B

Gross margin 36%

Operating margin 1.3% 5-yr avg 2.3%

ROIC 9% 5-yr avg 13%

Owner-earnings margin 2% 5-yr avg 2%

Free cash flow margin 2% 5-yr avg 2%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is led by Non perishable (53%) and Fresh (25%), with 2 more lines behind.
What moves the needle: A supermarket is closer to a commodity than a franchise: shoppers can buy the same milk and bread almost anywhere, so the game is the low-cost-producer's, won on scale in buying, tight operating expense, and squeezing more sales through each store and distribution network. Two levers stand out. The first is private label, where its own brands carry a fatter margin and give shoppers a reason to come back that a rival must match with a label of its own rather than stock off the same shelf. The second is the data and fuel and pharmacy traffic that pull shoppers in and lift the basket. The bad case is the trade it lives in: margins are slim by design, Walmart and Costco and the discounters press on price, and online grocery threatens to take the trip away. Whether scale and own-brands buy any durable edge shows in the margins and the returns on capital in the record below.
Is it a good business?: Return on capital has sat near the cost of capital (median 12%). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Drafted from the company's filings and reviewed by hand; every number is shown in full in the sections below.

Where the money comes from

read the 10-K →

Revenue spreads across 5 lines, the largest Non perishable at 53%.

Revenue by product line, FY2026

Non perishable53%$77.6B
Fresh25%$37.2B
Pharmacy12%$18.2B
Supermarket fuel9%$13.6B
Other1%$1.1B

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2017–2026

realized figures from each filing · older years to the left

2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	2026’26	TTMTTMMay 2026
											Income statement
$115.3B	$123.3B	$121.9B	$122.3B	$132.5B	$137.9B	$148.3B	$150.0B	$147.1B	$147.6B	$148.6B	RevenueRevenue
22%	22%	—	—	—	—	—	—	—	—	36%	Gross marginGross mgn
$3.5B	$2.6B	$2.6B	$2.3B	$2.8B	$3.5B	$4.1B	$3.1B	$3.8B	$1.9B	$2.0B	Operating incomeOp. inc.
3.0%	2.1%	2.1%	1.8%	2.1%	2.5%	2.8%	2.1%	2.6%	1.3%	1.3%	Operating marginOp. mgn
$2.0B	$1.9B	$3.1B	$1.7B	$2.6B	$1.7B	$2.2B	$2.2B	$2.7B	$1.0B	$1.1B	Net incomeNet inc.
33%	—	22%	22%	23%	19%	23%	24%	20%	15%	17%	Effective tax rateTax rate
											Cash flow & returns
$4.3B	$3.4B	$4.2B	$4.7B	$6.8B	$6.2B	$4.5B	$6.8B	$5.8B	$7.3B	$6.9B	Operating cash flowOp. cash
$2.3B	$2.4B	$2.5B	$2.6B	$2.7B	$2.8B	$3.0B	$3.1B	$3.2B	$3.3B	$3.3B	DepreciationDeprec.
($184M)	($1.1B)	($1.6B)	$201M	$1.3B	$1.5B	($901M)	$1.3B	($292M)	$2.8B	$2.4B	Working capital & otherWC & other
$3.7B	$2.8B	$3.0B	$3.1B	$2.9B	$2.6B	$3.1B	$3.9B	$4.0B	$3.9B	$4.1B	CapexCapex
3.2%	2.3%	2.4%	2.6%	2.2%	1.9%	2.1%	2.6%	2.7%	2.6%	2.8%	Capex / revenueCapex/rev
$1.9B	$604M	$1.2B	$1.5B	$4.0B	$3.6B	$1.4B	$2.9B	$1.8B	$3.5B	$3.7B	Owner earningsOwner earn.
1.7%	0.5%	1.0%	1.3%	3.0%	2.6%	1.0%	1.9%	1.2%	2.3%	2.5%	Owner earnings marginOE mgn
$573M	$604M	$1.2B	$1.5B	$4.0B	$3.6B	$1.4B	$2.9B	$1.8B	$3.5B	$2.8B	Free cash flowFCF
0.5%	0.5%	1.0%	1.3%	3.0%	2.6%	1.0%	1.9%	1.2%	2.3%	1.9%	Free cash flow marginFCF mgn
$401M	$16M	$197M	—	—	—	—	—	—	—	$197M	AcquisitionsAcquis.
$429M	$443M	$437M	$486M	$534M	$589M	$682M	$796M	$883M	$885M	$889M	Dividends paidDiv. paid
$1.8B	$1.6B	$2.0B	$465M	$1.3B	$1.6B	$993M	$62M	$4.2B	$2.7B	—	BuybacksBuybacks
12%	12%	9%	8%	11%	15%	16%	12%	15%	9%	9%	ROICROIC
29%	28%	39%	19%	27%	18%	22%	19%	32%	17%	16%	Return on equityROE
23%	21%	34%	14%	21%	11%	16%	12%	22%	2%	3%	Retained to equityRetained/eq
											Balance sheet
$322M	$347M	$429M	$399M	$1.7B	$1.8B	$1.0B	$1.9B	$4.0B	$3.3B	$2.9B	Cash & investmentsCash+inv
$1.6B	$1.6B	$1.6B	$1.7B	$1.8B	$1.8B	$2.2B	$2.1B	$2.2B	$2.2B	$2.1B	ReceivablesReceiv.
$5.8B	$5.9B	$6.1B	$6.3B	$6.7B	$7.1B	$10.2B	$10.4B	$10.1B	$10.5B	$11.3B	Accounts payablePayables
($4.2B)	($4.2B)	($4.5B)	($4.6B)	($4.9B)	($5.3B)	($7.9B)	($8.2B)	($7.9B)	($8.3B)	($3.9B)	Operating working capitalOper. WC
$10.3B	$11.1B	$10.8B	$10.9B	$12.5B	$12.2B	$12.7B	$12.9B	$15.3B	$14.5B	$14.2B	Current assetsCur. assets
$12.9B	$14.2B	$14.3B	$14.2B	$15.4B	$16.3B	$17.2B	$16.1B	$15.9B	$18.1B	$18.0B	Current liabilitiesCur. liab.
0.8×	0.8×	0.8×	0.8×	0.8×	0.7×	0.7×	0.8×	1.0×	0.8×	0.8×	Current ratioCurr. ratio
$3.0B	$2.9B	$3.1B	$3.1B	$3.1B	$3.1B	$2.9B	$2.9B	$2.7B	$2.6B	$2.6B	GoodwillGoodwill
$36.5B	$37.2B	$38.1B	$45.3B	$48.7B	$49.1B	$49.6B	$50.5B	$52.6B	$50.0B	$50.3B	Total assetsAssets
$13.3B	$14.8B	$14.4B	$13.3B	$12.4B	$11.7B	$11.3B	$10.2B	$15.9B	$15.9B	$15.4B	Total debtDebt
$13.0B	$14.4B	$13.9B	$12.9B	$10.7B	$9.9B	$10.3B	$8.3B	$11.9B	$12.5B	$12.5B	Net debt / (cash)Net debt
6.6×	4.3×	4.2×	3.7×	5.1×	6.1×	7.7×	7.0×	—	—	4.9×	Interest coverageInt. cov.
$6.7B	$6.9B	$7.9B	$8.6B	$9.6B	$9.5B	$10.0B	$11.6B	$8.3B	$5.9B	$6.5B	Shareholders’ equityEquity
0.1%	0.1%	0.1%	0.1%	0.1%	0.1%	0.1%	0.1%	0.1%	0.1%	0.1%	Stock comp / revenueSBC/rev
—	$110M	—	—	—	—	$160M	—	$242M	—	$242M	Goodwill written downGW imp.
											Per share
958M	904M	818M	805M	781M	754M	727M	725M	720M	655M	615M	Shares out (diluted)Shares
$120.39	$136.37	$148.96	$151.91	$169.65	$182.88	$203.93	$206.95	$204.34	$225.41	$241.70	Revenue / shareRev/sh
$2.06	$2.11	$3.80	$2.06	$3.31	$2.19	$3.09	$2.98	$3.70	$1.55	$1.71	EPS (diluted)EPS
$2.02	$0.67	$1.46	$1.91	$5.06	$4.74	$1.95	$3.98	$2.47	$5.28	$5.96	Owner earnings / shareOE/sh
$0.60	$0.67	$1.46	$1.91	$5.06	$4.74	$1.95	$3.98	$2.47	$5.28	$4.60	Free cash flow / shareFCF/sh
$0.45	$0.49	$0.53	$0.60	$0.68	$0.78	$0.94	$1.10	$1.23	$1.35	$1.45	Dividends / shareDiv/sh
$3.86	$3.11	$3.63	$3.89	$3.67	$3.47	$4.23	$5.38	$5.58	$5.89	$6.67	Cap. spending / shareCapex/sh
$6.99	$7.67	$9.64	$10.69	$12.26	$12.54	$13.81	$16.02	$11.51	$9.05	$10.52	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+7.2%/yr	+5.8%/yr
Owner earnings / share	+11.3%/yr	+0.9%/yr
EPS	−3.1%/yr	−14.1%/yr
Dividends / share	+13.1%/yr	+14.6%/yr
Capital spending / share	+4.8%/yr	+9.9%/yr
Book value / share	+2.9%/yr	−5.9%/yr

The record, charted

FY2017–2026

Each measure over its full record; the current point and the worst year marked.

Share count

655Mpeak FY2017

ROIC

9%low FY2020

Net debt ÷ owner earnings

3.6×peak FY2018

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$3.5Bowner earningsvs.$1.0Bnet incomelow FY2018

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2017FY2026

Owner-earnings bridge

FY2022–FY2026cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2026 the business turned $1.0B of profit into $3.5B of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

Reported net income$1.0B

Owner earnings$3.5B · 2% of revenue

	FY2026	FY2025	FY2024	FY2023	FY2022
Reported net income	$1.0B	$2.7B	$2.2B	$2.2B	$1.7B
Depreciation & amortizationnon-cash charge added back	+$3.3B	+$3.2B	+$3.1B	+$3.0B	+$2.8B
Stock-based compensationreal costnon-cash, but a real cost	+$157M	+$175M	+$172M	+$190M	+$203M
Working capital & othertiming of cash in and out, other non-cash items	+$2.8B	−$292M	+$1.3B	−$901M	+$1.5B
Cash from operations	$7.3B	$5.8B	$6.8B	$4.5B	$6.2B
Capital expenditurecash put back in to keep running and to grow	−$3.9B	−$4.0B	−$3.9B	−$3.1B	−$2.6B
Owner earnings	$3.5B	$1.8B	$2.9B	$1.4B	$3.6B
Owner-earnings marginowner earnings ÷ revenue	2%	1%	2%	1%	3%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $157M), owner earnings is nearer $3.3B.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2026 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 4.3×

Adequate

Operating income $1.9B ÷ interest expense $441M

What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
How heavy is the debt, net of cash? $12.5B · 6.6× operating profit

Heavy net debt

Cash $3.3B − debt $15.9B

What this means
Netting $3.3B of cash and short-term investments against $15.9B of debt leaves $12.5B owed, about 6.6× a year's operating profit (8.4× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital 12%

Solid through the cycle

10-yr median, range 8%–16%; 9% latest = NOPAT $1.6B ÷ invested capital $18.5B

Industry peers: median 10%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 9% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 1%

Thin through the cycle

10-yr median margin, range 0%–3%; latest $3.5B = operating cash $7.3B − maintenance capex $3.9B

Industry peers: median 2%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 2% of revenue this year, a 1% median across 10 years. Treating stock comp as the real expense it is (less $157M of SBC) leaves $3.3B.
Are earnings backed by cash? 7.20×

Cash-backed

Cash from ops $7.3B ÷ net income $1.0B

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 104%

Returned more than it generated

Dividends + buybacks $3.6B ÷ Owner Earnings $3.5B

What this means
The company returned more than it generated: against $3.5B of Owner Earnings, $3.6B (104%) went back to shareholders, $885M dividends, $2.7B buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $157M stock comp, the real buyback was about $2.5B. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 1.16×

Maintaining

Capex $3.9B ÷ depreciation $3.3B

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 3 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $147.6B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 0.80×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $15.9B vs ($3.6B) WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −16%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $3.18/share (latest year $1.66), the averaged base the calculator's gate runs on, and book value is $9.67/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2017–2026

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 2 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 2% → 2% (3-yr avg ends)

In the filing’s words The filing ties gains to its own pricing, but names price competition too — pricing power that is real yet contested, not unopposed. The margin shows who is winning.

What this means
Through the cycle the operating margin slipped — about 2% early to 2% lately, median 2% — competition or costs are biting in.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth +8%/yr

What this means
Owner earnings grew about 8% a year over the record.
Worst year 2026 · 1.3% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −4.1%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.
How management talks about it Owner’s terms

What this means
The record and the register agree: capital is compounding and the filing reasons in an owner’s terms — per-share value, return on capital, the long term — not a promoter’s.

Does AI threaten the moat?

Moderate contestability

AI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.

In its own filing A competitive risk, new this year

Its FY2026 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“The emergence of artificial intelligence-powered agentic shopping tools, in which AI agents autonomously research, compare and purchase products on behalf of consumers could further disrupt traditional grocery retail.”

The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, May 23, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$14.2B

Cash & short-term investments$2.9B
Receivables$2.1B
Inventory$5.3B
Other current assets$4.0B

Current liabilities$18.0B

Debt due within a year$866M
Accounts payable$11.3B
Other current liabilities$5.8B

Current ratio0.79×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.50×stricter: inventory excluded

Cash ratio0.16×strictest: cash alone against what's due

Working capital($3.8B)the cushion left after near-term bills

Its current ratio is below 1, which usually reads as strain; here it is likely structural strength. What it owes in the near term is money to suppliers and customers (payables and deferred revenue), not to lenders, so the balance sheet is funded by operating float, the way Costco's and Amazon's are. The low ratio can be the edge, not the risk; the cash-conversion cycle and the debt due above say which.

Debt due this year vs. cash$866M due · $2.9B cash covered by cash on hand, no refinancing forced · both figures from the May 23, 2026 balance sheet

Revenue, latest quarter vs. a year ago+0.7%the freshest read on whether the business is still growing

Current ratio, recent quarters0.9× → 0.8×

Deeper floors

Tangible book value$3.0Bequity stripped of goodwill & intangibles

Net current asset value($29.6B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$22.6B$7.2B of it operating leases; with finance leases, “total fixed claims” below reaches $24.7B (annual-report basis)

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'26$1.3B

'27$616M

'28$655M

'29$554M

'30$1.0B

later$11.7B

Bars scaled to the largest single year; “later” is everything due after 2030, shown apart since it dwarfs the years.

Due in the next 12 months$1.3Bthe first rung: what must be repaid or rolled over within the year

Within two years$1.9Bthe near wall, the part most exposed to today’s credit conditions

Biggest single year$1.3Bin 2026the lumpiest maturity, where a refinancing, if needed, is largest

Total scheduled principal$15.9Bevery year plus what lies beyond, as the footnote totals it

Against what the business has and earns

Cash & short-term investments, May 23, 2026$2.9B

One year of owner earnings (FY2026)$3.5B

Together, against $1.3B due next year4.8×

Cash on hand as of May 23, 2026 plus a year’s owner earnings comes to $6.3B against the $1.3B due in the twelve months after the Jan 31, 2026 schedule: 4.8 times it.

Maturity schedule extracted from the company’s Jan 31, 2026 annual report and reconciled to the total the table states.

Lease obligations

the lease note, SEC EDGAR →

Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, operating and finance leases together, and what it adds to the debt on the page above.

Operating leasesFinance leases

'26$1.4B

'27$1.1B

'28$1.0B

'29$949M

'30$891M

later$6.9B

Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.

Due in the next 12 months$1.4Ba fixed cash payment, owed whether or not the business has a good year

Total lease payments$12.3Bevery year plus the tail, undiscounted: the full cash the leases will take

On the balance sheet$8.8Bthe present value of those payments, the recognised lease liability

True leverage: debt plus leases

On-balance-sheet debt$15.9B

Lease obligations (present value)$8.8B

Total fixed claims on the business$24.7B

Counting the leases the way Buffett does, the fixed claims on this business come to $24.7B, of which the leases are 36%. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.

Lease ladder read from the ASC 842 tags in the company’s Jan 31, 2026 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.

How the cash was used, 2017–2026

Over the record, the business generated $53.9B of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.

Reinvested$32.9B · 61%
Dividends$6.2B · 11%
Buybacks$16.8B · 31%

Returned to owners$22.9B
103% of the owner earnings the business produced over the span, $6.2B as dividends and $16.8B as buybacks.
Source of funding−$1.9B
Reinvestment and shareholder returns ran $1.9B beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $13.3B to $15.4B.
Average price paid for buybacks—
Buybacks ran $16.8B over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count−35.8%
The diluted count fell from 958M to 615M, so the buybacks outran the stock issued to staff.
Dividend record$1.35/sh
Paid in 10 of the years on record, the per-share dividend growing about 13% a year. It was never cut over the span.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$3.4B7% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity44%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$614Mover 10 years buying other businesses, against $32.9B of capital spent building

$512M written down across 3 years (2018, 2023, 2025): goodwill the company has already conceded it overpaid for, charged against earnings. That is roughly 83% of the cash it put into acquisitions over the span. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2022	Mr. McMullen	$18.2M	$36.1M	$3.6B
2023	Mr. McMullen	$19.2M	$23.3M	$1.4B
2024	Mr. McMullen	$15.7M	$16.8M	$2.9B
2025	Mr. McMullen	$15.6M	$21.3M	$1.8B
2026	Mr. McMullen	$14.0M	$13.9M	$3.5B
2026	Mr. McMullen	$843k	−$27.7M	$3.5B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Stock-based compensation$157M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 8% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Kroger Company (The) is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2017–2026.

None of the 6 tests turned up a mark; each came back clean. A clean panel says only that these particular ways of being wrong are not written into the record.

Each test came back clean

Is it less profitable than it was?
Did the share count rise anyway?
Did debt outgrow the business?
Did reported profit become cash?
Did receivables and inventory outpace sales?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2026

read the 10-K →

Which reported numbers are a judgment call?
Management names Pension & retirement, Acquisitions as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Food & Drug Retailing

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
KRKroger Company (The)	$147.6B	35%	2.1%	12%	1%
ACIAlbertsons	$83.2B	28%	2.1%	12%	1%
SFMSprouts Farmers	$8.8B	36%	5.3%	30%	5%
ARKOARKO Corp.	$7.6B	—	1.3%	10%	1%
IMKTAIngles Markets Incorporated	$5.3B	24%	3.6%	9%	2%
WMKWeis Markets Inc.	$5.0B	—	2.7%	8%	2%
GOGrocery Outlet	$4.7B	30%	2.9%	5%	3%
VLGEAVillage Super Market Inc.	$2.3B	28%	2.1%	10%	2%
Group median	—	29%	2.4%	10%	2%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Kroger Company (The) has delivered.

Kroger Company (The)’s latest year runs above its own through-cycle margin — the reported figure may flatter a peak. So the tool opens on the through-cycle base, Graham’s averaging cutting both ways; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, Kroger Company (The) earns about $2.2B on its 1.5% median owner-earnings margin. This year’s 2.3% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.

Base Normalize · through-cycle ($2.2B) Net of stock comp (−$176M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’22→’26+1%/yr

Owner-earnings growth · ’17→’26+18%/yr

Owner-earnings yield—

P/E (3-yr earnings ’24–’26)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $2.8B on 613M shares outstanding, per the 10-Q cover, as of 2026-06-24; net debt $12.5B. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh KR against another business →

Cite: Owner Scorecard, "Kroger Company (The) (KR), the owner's record," https://ownerscorecard.com/c/KR, data as of 2026-07-09.

Manual order: ← KOS its page in the Manual KRC →

Industry order: ← IMKTA the Food & Drug Retailing chapter NGVC →