10-K - KR - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 31, 2026 .

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-303

THE KROGER CO .

(Exact name of registrant as specified in its charter)

Ohio		31-0345740
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1014 Vine Street , Cincinnati , OH		45202
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (513) 762-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common, $1.00 Par Value	KR	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

NONE

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.


Yes ☒		No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.


Yes ☐		No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes ☒		No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Yes ☒		No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒		Accelerated filer ☐
Non-accelerated filer ☐		Smaller reporting company ☐
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b) ☐.

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).


Yes ☐		No ☒

The aggregate market value of the voting common equity held by non-affiliates based on the closing sale price of those shares on the New York Stock Exchange, as of the last business day of the registrant’s most recently completed second fiscal quarter (August 16, 2025). $46.1 billion.

The number of shares outstanding of the registrant's common stock, as of the latest practicable date. 612,575,611, shares of Common Stock of $1 par value, as of March 25, 2026.

Documents Incorporated by Reference:

Portions of Kroger’s definitive proxy statement for its 2026 annual meeting of shareholders, which shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Report relates, are incorporated by reference into Part III of this Report.

The Kroger Co.

Form 10-K

For the Fiscal Year Ended January 31, 2026

Table of Contents


		Page
Part I		2
Item 1	Business	3
Item 1A	Risk Factors	10
Item 1B	Unresolved Staff Comments	18
Item 1C	Cybersecurity	18
Item 2	Properties	20
Item 3	Legal Proceedings	20
Item 4	Mine Safety Disclosures	20

Part II		21
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	21
Item 6	Reserved	23
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	46
Item 8	Financial Statements and Supplementary Data	50
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	99
Item 9A	Controls and Procedures	99
Item 9B	Other Information	100
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	100

Part III		100
Item 10	Directors, Executive Officers and Corporate Governance	100
Item 11	Executive Compensation	100
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	101
Item 13	Certain Relationships and Related Transactions, and Director Independence	101
Item 14	Principal Accountant Fees and Services	101

Part IV		102
Item 15	Exhibits and Financial Statement Schedules	102
Item 16	Form 10-K Summary	104
	Signatures	105

PART I

FORWARD-LOOKING STATEMENTS.

This Annual Report on Form 10-K contains forward-looking statements about our future performance. These statements are based on our assumptions and beliefs in light of the information currently available to us. These statements are subject to a number of known and unknown risks, uncertainties and other important factors, including the risks and other factors discussed in “Risk Factors” below, that could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. Such statements are indicated by words such as “accelerate,” “achieve,” “affect,” “anticipate,” “assumptions,” “believe,” “committed,” “continue,” “could,” “creating,” “deliver,” “drive,” “effect,” “enable,” “estimate,” “expects,” “future,” “goal,” “growth,” “initiatives,” “intended,” “likely,” “maintain,” “may,” “model,” “objective,” “plan,” “position,” “program,” “range,” “result,” “strategy,” “strive,” “strong,” “target,” “trend,” “will” and “would,” and similar words or phrases. Moreover, statements in the sections entitled Risk Factors, Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), and elsewhere in this Annual Report regarding our expectations, projections, beliefs, intentions or strategies are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Various uncertainties and other factors could cause actual results to differ materially from those contained in the forward-looking statements. These include:

●

The extent to which our sources of liquidity are sufficient to meet our requirements may be affected by the state of the financial markets and the effect that such condition has on our ability to issue commercial paper at acceptable rates. Our ability to borrow under our committed lines of credit, including our bank credit facilities, could be impaired if one or more of our lenders under those lines is unwilling or unable to honor its contractual obligation to lend to us, or in the event that global pandemics, natural disasters or weather conditions interfere with the ability of our lenders to lend to us. Our ability to refinance maturing debt may be affected by the state of the financial markets.

●

Our ability to achieve sales, earnings and incremental First-In, First-Out (“FIFO”) operating profit goals may be affected by: labor negotiations; potential work stoppages; changes in the unemployment rate; pressures in the labor market; changes in government-funded benefit programs; changes in the types and numbers of businesses that compete with us; pricing and promotional activities of existing and new competitors, and the aggressiveness of that competition; our response to these actions; the state of the economy, including interest rates, the inflationary, disinflationary and/or deflationary trends and such trends in certain commodities, products and/or operating costs; the geopolitical environment including wars and conflicts; unstable political situations and social unrest; changes in tariffs; the effect that fuel costs have on consumer spending; volatility of fuel margins; manufacturing commodity costs; supply constraints; diesel fuel costs related to our logistics operations; trends in consumer spending; the extent to which our customers exercise caution in their purchasing in response to economic conditions; the uncertainty of economic growth or recession; stock repurchases; changes in the regulatory environment in which we operate, along with changes in federal policy and at state and federal regulatory agencies; our ability to retain pharmacy sales from third-party payors; consolidation in the healthcare industry, including pharmacy benefit managers; our ability to negotiate modifications to multi-employer pension plans; our ability to attract and retain qualified individuals; natural disasters or adverse weather conditions; the effect of public health crises or other significant catastrophic events; the potential costs and risks associated with potential cyberattacks or data security breaches; the potential costs and risks associated with new technologies, including artificial intelligence; the success of our future growth plans; the ability to execute our growth strategy and value creation model, including continued cost savings, growth of our alternative profit businesses, and our ability to better serve our customers and to generate customer loyalty and sustainable growth through Fresh, Our Brands, Personalization, and eCommerce; the outcome of litigation matters, including those relating to the terminated transaction with Albertsons Companies, Inc. (“Albertsons”); and the risks relating to or arising from our opioid litigation settlements, including the risk of litigation relating to persons, entities, or jurisdictions that do not participate in those settlements.

●	Our ability to achieve these goals may also be affected by our ability to manage the factors identified above. Our ability to execute our financial strategy may be affected by our ability to generate cash flow.

●	Our adjusted effective tax rate may differ from the expected rate due to changes in tax laws and policies, the status of pending items with various taxing authorities, and the deductibility of certain expenses.

●	We cannot fully foresee the effects of changes in economic conditions on our business.

Other factors and assumptions not identified above, including those discussed in Part I, Item 1A of this Annual Report on Form 10-K, could also cause actual results to differ materially from those set forth in the forward-looking statements. Accordingly, actual events and results may vary significantly from those included in, contemplated or implied by forward-looking statements made by us or our representatives. We undertake no obligation to update the forward-looking statements contained in this Annual Report on Form 10-K, except to the extent required by applicable law.

ITEM 1.	BUSINESS.

The Kroger Co. (the “Company” or “Kroger”) was founded in 1883 and incorporated in 1902. Our Company is built on the foundation of our retail grocery business, which includes the added convenience of our retail pharmacies and fuel centers. Our strategy is focused on growing households and increasing customer loyalty by delivering great value and convenience, and investing in Fresh, Our Brands, Personalization and eCommerce.

We utilize the data and traffic generated by our retail business to create personalized experiences and value for our customers. This data and traffic also enable our fast-growing, high operating margin alternative profit business, including third-party media revenue. In turn, the value generated from these businesses enables us to reinvest back into our retail business.

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. We earn income predominately by selling products at price levels that produce revenues in excess of the costs we incur to make these products available to our customers. Such costs include procurement and distribution costs, facility occupancy and operational costs, and overhead expenses. Our fiscal year ends on the Saturday closest to January 31. All references to 2025, 2024 and 2023 are to the fiscal years ended January 31, 2026, February 1, 2025 and February 3, 2024, respectively, unless specifically indicated otherwise.

We maintain a web site (www.thekrogerco.com) that includes additional information about the Company. Kroger’s website and any reports or other information made available by Kroger through its website are not part of or incorporated by reference into this Annual Report on Form 10-K. We make available through our web site, free of charge, our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and our interactive data files, including amendments. These forms are available as soon as reasonably practicable after we have filed them with, or furnished them electronically to, the Securities and Exchange Commission (“SEC”), and are also available at www.sec.gov.

Kroger is diversified across brands, product categories, channels of distribution, geographies and consumer demographics. Our combination of assets includes the following:

Stores

As of January 31, 2026, Kroger operates supermarkets under a variety of local banner names in 35 states and the District of Columbia. As of January 31, 2026, Kroger operated, either directly or through its subsidiaries, 2,697 supermarkets, of which 2,250 had pharmacies and 1,731 had fuel centers. Approximately 51% of our supermarkets were operated in Company-owned facilities, including some Company-owned buildings on leased land. Our stores operate under a variety of banners that have strong local ties and brand recognition. We connect with customers through our growing network of in-store and digital shopping options, delivering a consistent full, fresh and friendly customer experience. Fuel sales are an important part of our revenue, net earnings and loyalty offering. Our fuel strategy is to include a fuel center at each of our supermarket locations when it is feasible and it is expected to be profitable. Each fuel center typically includes four to nine islands of fuel dispensers and storage tanks with capacity for 35,000 to 50,000 gallons of fuel.

We intend to continue investing in new store growth as a key driver of long-term value creation. New stores allow us to increase penetration in existing markets, enter new geographies and reach new customers. We expect new store development to contribute to improved return on invested capital, volume growth and stronger market share performance.

eCommerce

We offer a convenient shopping experience for our customers regardless of how they choose to shop with us, including Pickup and Delivery. We offer Pickup and Harris Teeter ExpressLane™ — personalized, order online, pick up at the store services — at 2,408 of our supermarkets and provide Delivery, which allows us to offer digital solutions to substantially all of our customers. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers and orders placed through third-party platforms. These channels allow us to serve customers anything, anytime and anywhere with broad selection, convenience, and price. We also provide relevant customer-facing apps and interfaces that have the features customers want and that are also reliable, easy to use and deliver a seamless customer experience across our store and digital channels. We continue to make meaningful improvements in our eCommerce business and believe it will be an important growth driver and one of the key ways to attract new households.

Media

Kroger Precision Marketing, our retail media business, leverages our rich first-party data and deep customer relationships to provide targeted, measurable advertising solutions for consumer-packaged goods companies and a growing number of other industry partners. With insights drawn from the shopping behaviors of millions of loyal households, Kroger Precision Marketing enables advertisers to reach customers with relevant messaging across a variety of digital and in-store channels, including on-site search, display, social media, connected TV, and in-store placements.

We believe our retail media business represents a significant and growing opportunity. As advertisers increasingly seek returns on media, the ability to connect advertising spend directly to actual purchase behavior, Kroger Precision Marketing is uniquely positioned to deliver that capability at scale. Our ability to link media impressions directly to household transactions across both digital and in-store purchases provides our advertising partners with best-in-class performance measurement.

Kroger Precision Marketing is a key contributor to our alternative profit strategy, which focuses on generating revenue from assets and capabilities that complement our core grocery business. The retail media business carries an attractive margin profile relative to our traditional operations and is an important driver of our digital profitability. We intend to continue investing in the technology, talent, and collaborations needed to grow this business and expand the range of solutions we offer to advertisers.

Our Data

Kroger serves approximately 63 million households annually, and because of our rewards program, over 95% of customer transactions are tethered to a Kroger loyalty card. Our over 20 years of investment in data science capabilities allows us to utilize this data to create personalized experiences and value for our customers and enables our growing, high operating margin alternative profit businesses, including data analytic services and third-party media revenue.

Merchandising and Our Brands

Our Brands play an important role in our merchandising strategy and represented over $39 billion of our sales in 2025. Our Brands include (i) items produced in our food production plants or by outside manufacturers that display the name of any Kroger registered trademark or brand and (ii) certain fresh and service‑case products that may not bear a Kroger registered trademark or brand but are sourced, produced or prepared in accordance with our merchandising and quality standards. Our supermarkets, on average, stock over 13,000 private label items. Our Brands products are primarily produced and sold in three “tiers.” Private Selection® is our main premium quality brand, offering customers culinary foods and ingredients that deliver extraordinary eating experiences. The Kroger® brand, which represents the majority of our private label items, is designed to consistently satisfy and delight customers with quality products that exceed or meet the national brand in taste and efficacy. Smart Way® is our value brand, designed to deliver good quality at an affordable price. In addition to our three “tiers,” Our Brands offers customers a variety of natural and organic products with the Simple Truth® brand. Simple Truth® is free from unwanted ingredients and delivers our best natural and organic products for any lifestyle.

Approximately 20% of Our Brands units sold in our supermarkets are produced in our food production plants. The remaining Our Brands items are produced to our strict specifications by outside manufacturers. We perform a “make or buy” analysis on Our Brands products and decisions are based upon a comparison of market-based transfer price versus open market purchases. As of January 31, 2026, we owned 33 food production plants. These plants consisted of 14 dairies, nine deli or bakery plants, five grocery product plants, two beverage plants, one meat plant and two cheese plants.

SEASONALITY

The majority of our revenues are generally not seasonal in nature. However, revenues tend to be higher during the major holidays throughout the year. Additionally, certain significant events including inclement weather systems, particularly winter storms, tend to affect our sales trends.

HUMAN CAPITAL MANAGEMENT

Our People

We want Kroger to be a place where our customers love to shop and our associates love to work. This is why we aim to create working environments where associates feel encouraged and supported to be their best selves every day. As of January 31, 2026, Kroger employed more than 403,000 full- and part-time employees. Our people are essential to our success, and we focus intentionally on attracting, developing and engaging a diverse workforce that represents the communities we serve. We strive to create a culture of opportunity and take seriously our role as a leading employer in the United States. Kroger provides a large number of people with first jobs, new beginnings and lifelong careers and we have long been guided by Our Values — Honesty, Integrity, Respect, Safety, Diversity and Inclusion.

Attracting & Developing Our Talent

To deliver on our customers’ experiences and remain competitive with union and non-union employers, we continually try to improve how we attract and retain talent. In addition to competitive wages, high-quality benefits and a safe work environment, we offer a broad range of employment opportunities for workers of all ages and aspirations. Many retail roles offer opportunities to learn new skills, where new associates come for a job and discover a career.

Associates at all levels of Kroger have access to training and education programs to build their skills and prepare for new roles. In 2025, we spent approximately $183 million on training our associates through onboarding, leadership development programs and programs designed to upskill associates across the Company. We continue to invest in new platforms and applications to make learning more accessible to our associates.

Beyond our own training programs, associates can take advantage of our tuition reimbursement benefit, which offers up to $3,500 annually — $21,000 over the course of employment — toward continuing education. These funds can be applied to education programs like certifications, associate or graduate degrees. Approximately 6,100 associates, 92% of whom are paid on an hourly basis, took advantage of our tuition reimbursement program in 2025. Kroger has invested approximately $76 million in this program since it launched in 2018. 5

Rewarding Our Associates

As we continue to operate in a challenging labor market, we are dedicated to attracting and retaining the right talent across the organization to be able to continue delivering for our customers. We are investing in our associates by expanding our industry-leading benefits, including continuing education, training and development and health and wellness. During 2025, we increased associate wages, resulting in an average hourly rate of more than $20, and a rate of more than $26 with comprehensive benefits factored in, which is a 43% increase in rate in the last eight years. We remain committed to supporting our associates with investments in wages and comprehensive benefits that are sustainable and will allow us to continue to keep products affordable for the communities we serve. We expect to make continued associate investments in 2026.

Creating a Safe Environment

Our associates’ safety is a top priority and one of our core values. We prioritize providing the right safety training and equipment, safe working conditions and resources to maintain and improve associates’ well-being. Through our strategy to set clear expectations, routine monitoring, and regular communication and engagement, we strive to reduce the number of injuries and accidents that happen in our workplaces. We track health and safety metrics centrally for an enterprise-wide view of issues, trends and opportunities and monitor associate injury performance including total injuries, Occupational Safety and Health Administration (“OSHA”) injury rates, and lost-time injuries, as well as customer injury metrics like slip-and-fall injuries. We also track the completion of required training for associates, and we regularly share these metrics with leaders and relevant team members to inform management decisions.

Supporting Labor Relations

More than two-thirds of our associates are covered by collective bargaining agreements negotiated with local unions affiliated with one of several different international unions. There are approximately 350 such agreements, usually with terms of three to five years. Wages, health care and pensions are included in all of these collective bargaining agreements. Our objective is to negotiate contracts that balance wage increases so those wages are competitive with union and non-union employers, provide affordable healthcare for associates and keep groceries affordable for the communities we serve. Our obligation is to do this in a way that maintains a financially sustainable business.

CLIMATE RESILIENCIES

Managing greenhouse gas emissions to reduce our impact on the environment is an important part of Thriving Together, our responsible business strategy, and has been a focus for our business for many years. With a large portfolio of supermarkets, distribution warehouses, and food production plants, as well as a complex supply chain, we continue to take steps to reduce both the effects of our operations on the environment and the potential effects of a changing climate on our operations.

To help identify and manage climate-related risks to our business, we conduct a periodic quantitative climate risk assessment to determine the likelihood that different physical climate risks, including drought, extreme heat and extreme precipitation, would affect our operations at representative facilities in different geographies and, in turn, potentially increase operating costs for these facilities. As a result of our past risk assessments, we do not currently anticipate the modeled physical risks to adversely affect our financial condition, results of operations or cash flows for the foreseeable future. We expect to disclose results of an updated climate risk assessment in the next reporting year.

We also acknowledge that climate-related legislation can affect our business. As a result of current state and federal requirements regarding the phasedown of hydrofluorocarbon (“HFC”) refrigerants, we are steadily replacing our refrigerant infrastructure to reach required levels, which incurs capital costs to the business. Any such legislation affects all retailers using refrigerants in their operations. We also monitor utility and technology availability and costs to help anticipate how these could affect our business operations in the future.

To help prepare for and manage a variety of risk scenarios, including natural disasters and business disruptions to our supply chain, we maintain more than 200 business continuity plans. We have installed technologies and processes to ensure our supermarkets, food production plants, fulfillment centers and supply chain can respond quickly and remain operational to serve our customers.

This topic is managed by leadership with input from several departments across the business. The Public Responsibilities Committee of the Board of Directors oversees our responsibilities as a responsible business and our practices related to environmental sustainability, including potential climate effects, along with other environmental and social topics of material importance.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

The following is a list of the names and ages of the executive officers and the positions held by each such person as of March 25, 2026. Except as otherwise noted, each person has held office for at least five years. Each officer will hold office at the discretion of the Board for the ensuing year until removed or replaced.

Name
Name	Age	Recent Employment History

Mary E. Adcock	50	Ms. Adcock was elected Executive Vice President and Chief Merchant and Marketing Officer in March 2025 and is responsible for sales and category planning for fresh foods, center store and general merchandise categories, as well as analytics & execution, e-commerce and digital merchandising, fuel, manufacturing and Our Brands. Prior to that, Ms. Adcock served as Senior Vice President and Chief Merchant and Marketing Officer from December 2024 to March 2025. From May 2019 to December 2024, she served as Senior Vice President of Retail Operations, and from June 2016 to April 2019, she served as Group Vice President of Retail Operations. Prior to that, Ms. Adcock held leadership roles in Kroger’s Columbus Division, including Vice President of Operations and Vice President of Merchandising. Prior to that, she served as Vice President of Natural Foods Merchandising and as Vice President of Deli/Bakery Manufacturing and held several leadership positions in the manufacturing department, including human resources manager, general manager and division operations manager. Ms. Adcock joined Kroger in 1999 as human resources assistant manager at the Country Oven Bakery in Bowling Green, Kentucky.

Yael Cosset	52	Mr. Cosset was elected Executive Vice President and Chief Digital Officer in March 2025 and is responsible for leading Kroger’s digital strategy, focused on building Kroger’s presence in the marketplace in digital channels, personalization and e-commerce. He is also responsible for Kroger’s alternative profit businesses, including Kroger’s data analytics subsidiary, 84.51° LLC, and Kroger Personal Finance. From May 2019 to March 2025, Mr. Cosset served as Senior Vice President and Chief Information Officer. Prior to that, he served as Group Vice President and Chief Digital Officer, and also as Chief Commercial Officer and Chief Information Officer of 84.51° LLC. Prior to joining Kroger, Mr. Cosset served in several leadership roles at dunnhumby USA, LLC, including Executive Vice President of Consumer Markets and Global Chief Information Officer.

Carin L. Fike	57	Ms. Fike was elected Vice President and Treasurer effective April 2017. Prior to that, she served as Assistant Treasurer and also as Director of Investor Relations. Ms. Fike began her career with Kroger in 1999 as a manager in the Financial Reporting department after working with PricewaterhouseCoopers in various roles, including audit manager.

Gregory S. Foran	64	Mr. Foran was elected Chief Executive Officer effective February 2026. He was also appointed as a member of the Kroger Board effective February 2026. Mr. Foran previously served as the Chief Executive Officer of Air New Zealand Limited, a public airline, from February 2020 until October 2025. Prior to joining Air New Zealand, Mr. Foran had been at Walmart since October 2011, including serving as Executive Vice President, President and Chief Executive Officer, Walmart U.S. from August 2014 until January 2020, as President and Chief Executive Officer for the Walmart Asia region from May 2014 to August 2014, and as President and Chief Executive Officer of Walmart China from March 2012 to May 2014.

Valerie L. Jabbar	57	Ms. Jabbar was elected Senior Vice President effective August 19, 2021 and is responsible for the oversight of several Kroger retail divisions. From July 2020 to August 2021, she served as Group Vice President of Center Store Merchandising, and from September 2018 to June 2020, as Group Vice President of Merchandising. Prior to that, she served as President of the Ralphs Division from July 2016 to August 2018. Before that, Ms. Jabbar served as Vice President of Merchandising for the Ralphs Division and as Vice President of Merchandising for the Mid-Atlantic Division. She also held several leadership roles, including assistant store director, category manager, Drug/GM coordinator, G.O. Seasonal manager, assistant director of Drug/GM and director of Drug GM, and district manager in the Fry’s Division. She joined the Company in 1987 as a clerk in the Fry’s Division.

Joseph M. Kelley	60	Mr. Kelley was elected Senior Vice President in May 2025 and is responsible for the oversight of several Kroger retail divisions. From November 2021 to April 2025, he served as President of the King Soopers and City Market division. Prior to that, he served as President of the Houston division from May 2019 to November 2021. Mr. Kelley joined Kroger in 2019, serving as Vice President on special assignment with a focus on customer experience. Prior to joining Kroger, he held executive leadership roles with Ahold USA, Stop and Shop, Marsh Supermarkets, and Price Chopper Supermarkets, and served as principal of Kelley Business Advisors, LLC, where he advised grocery retailers.

David J. C. Kennerley	52	Mr. Kennerley was elected Executive Vice President in March 2025. Prior to joining Kroger, he held various leadership roles at PepsiCo, a global food, snack and beverage company, from 2001 to 2025, most recently serving as CFO, Europe. Mr. Kennerley joined PepsiCo in 2001 as a manager in the International Corporate Finance/Treasury Department, then in 2005 moved to the U.K. business as a business development director and subsequently held a number of roles across Planning and Commercial Finance. In 2011, he became the company’s senior finance director for the Global Beverages Group and then moved into the North American Beverage business. After that, Mr. Kennerley held a number of roles across Commercial Finance before being appointed to SVP Finance for the company’s North American Bottling business. He served in his most recent role as CFO, Europe from March 2020 to March 2025.
			8

Timothy A. Massa	59	Mr. Massa was elected Executive Vice President in March 2025 and serves as the Company’s Chief People Officer, leading all areas of Human Resources and Labor Relations, including total rewards, labor relations, diversity, business unit human resources, people operations, training and development, talent hiring, retention and engagement, corporate affairs, and associate communications. He also leads the areas of shared services and aviation. From June 2018 to March 2025, Mr. Massa served as Senior Vice President and Chief People Officer, and from June 2014 to June 2018, he served as Group Vice President of Human Resources and Labor Relations. Mr. Massa joined Kroger in October 2010 as Vice President, Corporate Human Resources and Talent Development. Prior to joining Kroger, he served in various Human Resources leadership roles for 21 years at Procter & Gamble, most recently serving as Global Human Resources Director of Customer Business Development.

Brian W. Nichols	53	Mr. Nichols was elected Group Vice President, Corporate Controller in October 2025 and is responsible for oversight of Kroger’s Corporate Accounting and Corporate Tax departments, as well as the Company’s Accounting Centers and Accounting Modernization teams. Prior to that, he served as Vice President, Corporate Controller from March 2024 to September 2025, and as Vice President, Assistant Corporate Controller from April 2021 to March 2024. From May 2018 to April 2021, Mr. Nichols served as Senior Director and Assistant Corporate Controller. Prior to that, he held several leadership roles, including Senior Manager of Corporate and External Financial Reporting and Senior Financial Analyst of SEC Reporting. Mr. Nichols joined Kroger in 2000 as Assistant Controller of the Central Division.

Ronald L. Sargent	70	Mr. Sargent has served as Chairman of the Board since March 2025 and also served as Interim Chief Executive Officer from March 2025 to February 2026. Mr. Sargent has been a Kroger director since 2006 and served as the Lead Director from June 2018 to March 2025. He was Chairman and Chief Executive Officer of Staples, Inc., a business products retailer, from 2002 until his retirement as Chief Executive Officer in 2016 and as Chairman in 2017, after joining the company in 1989. Prior to joining Staples, Mr. Sargent spent 10 years with Kroger in several roles across stores, sales, marketing, manufacturing and strategy.

Megan N. Shaffer	41	Ms. Shaffer was elected Group Vice President of Strategy, Customer Growth and Loyalty in June 2025. From May 2023 to June 2025, she served as Group Vice President and Chief Transformation Officer. From May 2018 to May 2020, she served as Senior Director in Retail Operations, focusing on process improvement and in-stock solutions. From May 2020 to April 2023, she was Vice President of Retail Operations, leading customer experience, labor, process improvement, and front-end operations. In September 2021, she gained responsibility for the Ruler Foods division. Ms. Shaffer joined Kroger in 2018 after 12 years in leadership roles with Aldi, Inc.
			9

Victor R. Smith		65		Mr. Smith was elected Senior Vice President in January 2026 and is responsible for the oversight of several Kroger retail divisions. From April 2022 to January 2026, he served as President of the Atlanta Division and from February 2018 to April 2022, he served as President of the Delta Division. From August 2016 to February 2018, Mr. Smith served as Vice President of Merchandising for the Ralphs Division. From December 2015 to July 2016, Mr. Smith served as Vice President of the Houston Division. Prior to that, he held several leadership roles in the Ralphs Division, including store manager, operations research analyst, shrink manager, operations coordinator, district manager and meat merchandiser. Mr. Smith joined the Company in 1983 as a courtesy clerk in the Ralphs Division.

George H. Vincent		68		Mr. Vincent was elected Executive Vice President, General Counsel and Secretary in August 2025 and is responsible for oversight of Kroger’s Law and Compliance departments. Before joining Kroger, he was engaged in the private practice of law for 43 years at Cincinnati-based law firm Dinsmore & Shohl and served as the firm’s managing partner from 2007 to 2022.

COMPETITIVE ENVIRONMENT

For the disclosure related to our competitive environment, see Item 1A under the heading “Competitive Environment.”

ITEM 1A.	RISK FACTORS.

There are risks and uncertainties that can affect our business. The significant risk factors are discussed below. The following information should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which includes forward-looking statements and factors that could cause us not to realize our goals or meet our expectations.

COMPETITIVE ENVIRONMENT

The operating environment for the food retailing industry continues to be characterized by the proliferation of local, regional, and national retailers, including both retail and digital formats, and intense and ever-increasing competition ranging from online retailers, mass merchants, club stores, regional chains, deep discounters, dollar stores, and ethnic, specialty and natural food stores. With the proliferation of grocery delivery – both by retailers and third-party delivery service providers – customers have a wide range of retailers from which to choose. Customers continue to expect a great shopping experience both in-store and online. The industry continues to be shaped by e-commerce, cooking at home and prepared foods to go and other customer needs and preferences. Customers want to be able to shop on their own terms whether at brick and mortar stores or online, pick-up or delivery, all depending on their particular trip needs and other factors. If we do not appropriately or accurately anticipate customer preferences or fail to quickly adapt to these ever-changing preferences, our sales and profitability could be adversely affected. If we fail to meet the evolving needs of our customers, our ability to compete and our financial condition, results of operations or cash flows could be adversely affected. In addition, if we are not able to execute our plan to significantly increase our investment in major store projects, including new stores to accelerate sales growth and improve share, while supporting our long-term growth model, our financial condition, results of operations or cash flows could be adversely affected.

We are continuing to enhance our connection with our customers with investments in our top priorities – Fresh, Our Brands, Personalization and eCommerce. Each of these strategies is designed to better serve our customers and to generate customer loyalty and sustainable growth momentum. We believe that continuing to focus on these top priorities will enable us to meet the wide-ranging needs and expectations of our customers. If we are unable to continue to enhance the key elements of our connection with customers, or if we fail to strengthen customer loyalty, our ability to compete and our financial condition, results of operations or cash flows could be adversely affected. Our ecosystem monetizes the traffic and data insights generated by our retail grocery business to create fast-growing, asset-light and margin-rich revenue streams. Growth in loyal households, customer traffic and digitally engaged customers allows us to grow profits and power the flywheel in our model. We may be unsuccessful in implementing our alternative profit strategy, which could adversely affect our business growth and our financial condition, results of operations or cash flows. The nature and extent to which our competitors respond to the evolving and competitive industry by developing and implementing their competitive strategies could also adversely affect our profitability.

In addition, evolving customer preferences and the advancement of online, delivery, ship to home and mobile channels in our industry have increased competition in our environment. We must anticipate and meet these evolving customer preferences and continue to implement technology, software and processes to be able to conveniently and cost-effectively fulfill customer orders. Providing flexible fulfillment options and implementing new technology is complex and may not meet customer preferences. If we are not successful in reducing or offsetting the cost of fulfilling orders outside of our in-store channel through efficiencies, expense reductions, or alternative revenues, our financial condition, results of operations or cash flows could be adversely affected.

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. If customers increasingly delegate purchasing decisions to AI agents that prioritize price, speed or other factors over retailer preference or brand loyalty, we could become disintermediated from the customer relationship. This could result in reduced visibility into customer behavior, increased margin pressure and a weakened ability to influence purchasing decisions. Our failure to adapt our digital capabilities to address the growth of agentic shopping could have an adverse effect on our business, financial condition, results of operations or cash flows.

In addition, if we do not successfully develop and maintain a relevant digital experience for our customers, our business, financial condition, results of operations or cash flows could be adversely affected. Digital retailing is rapidly evolving, and we must keep pace with new developments by our competitors, as well as the changing needs and preferences of our customers. We must compete by offering a convenient shopping experience for our customers, regardless of how they choose to shop with us, and by providing and maintaining relevant customer-facing apps and interfaces that have the features customers want that are also reliable and easy to use. The future success of the eCommerce business will also depend on the efficiency and cost effectiveness of fulfilling orders across our modalities, whether in store, pickup or delivery through third parties or our customer fulfillment centers. We have closed certain customer fulfillment centers because they have not been meeting operational and financial expectations. If we do not develop and maintain our eCommerce plan and profitability improvements of our customer fulfillment centers, our financial condition, results of operations or cash flows could be adversely affected.

PRODUCT SAFETY

Customers count on Kroger to provide them with safe food, drugs and other merchandise. Concerns regarding the safety of the products that we sell could cause shoppers to avoid purchasing certain products from us or to seek alternative sources of supply, even if the basis for the concern is outside of our control. Any lost confidence on the part of our customers would be difficult and costly to reestablish. We could be adversely affected by personal injury or product liability claims, product recalls, or other health and safety issues, which occur from time to time. If we sell products that cause illness or injury to customers, resulting from product contamination or spoilage, the presence of certain substances, or damage caused in handling, storage or transportation, we could be exposed to claims or litigation. Any issue regarding the safety of items, whether Our Brands items manufactured by us or for us or consumer packaged goods products we sell, regardless of the cause, could have a substantial and adverse effect on our reputation, financial condition, results of operations or cash flows.

EMPLOYEE MATTERS

More than two-thirds of our associates are covered by collective bargaining agreements with unions, and our relationship with those unions, including any work stoppage affecting a substantial number of locations, could have a material adverse effect on our financial condition, results of operations or cash flows. We are a party to approximately 350 collective bargaining agreements. Upon the expiration of our collective bargaining agreements, work stoppages by the affected workers could occur (and have occurred in the past) if we are unable to negotiate new contracts with the applicable labor union. In addition, changes to national labor policy could affect relations with our associates and with unions. Further, if we are unable to control health care, pension and wage costs, or if we have insufficient operational flexibility under our collective bargaining agreements, we may experience increased operating costs and an adverse effect on our financial condition, results of operations or cash flows.

We have committed to paying fair wages and providing the benefits that were collectively bargained with the United Food and Commercial Workers (“UFCW”) and other labor unions representing our associates. Our ability to control labor and benefit costs is subject to numerous internal and external factors, including regulatory changes, wage rates, and healthcare and other insurance costs. Changes to wage regulations, including further increases in the minimum wage or ordinances related to pay or working conditions enacted by local governments, could have an effect on our future financial condition, results of operations or cash flows. Our ability to meet our labor needs, while controlling wages and other costs, is subject to numerous external factors, including the available qualified workforce in each area where we are located, unemployment levels within those areas, wage rates, and changes in employment and labor laws.

Our continued success depends on the ongoing contributions of our associates, including members of our senior management, key associates and executives. While we have development and succession plans in place for our key associates and executives, these plans do not guarantee that the services of our key associates and executives will continue to be available to us or the successful transition of responsibilities following departures or role changes. It may be difficult to replace key executives because of the limited number of qualified individuals with the breadth of skills and experience necessary for our business. We must recruit, hire, develop and retain qualified associates with an increasingly large range of skills to meet the needs of our evolving and complex business. We compete with other retail and non-retail businesses for these associates and invest significant resources in training and motivating them. Competition among potential employers has resulted, and may in the future result, in increased associate costs and has from time to time affected our ability to recruit and retain associates. If we are unable to attract, develop, retain and effectively manage the development and succession plans for our associates, including members of our senior management, key associates and executives, it could have a material adverse effect on our business, financial condition, results of operations or cash flows.

DATA AND TECHNOLOGY

Our business is increasingly dependent on information technology systems that are complex. If we were to experience difficulties maintaining or operating existing systems or implementing new systems, we could incur significant losses due to disruptions in our operations. As we modernize legacy systems, if we are unable to successfully implement those systems in a coordinated manner across internal and external stakeholders, we could be subject to business interruption or reputation risk with our customers, suppliers or associates.

Rapidly evolving technological and regulatory developments related to artificial intelligence (“AI”) and related technologies may increase competitive, legal, and security risks facing the Company. While we are utilizing AI and machine learning capabilities across our business, our competitors or other third parties may incorporate AI into their products, services and operations more successfully, which could impair our ability to compete effectively, or adversely affect our results of operations or our ability to improve operational efficiency.

To effectively compete, we may need to increase investments in new capabilities and processes incorporating AI, as well as develop appropriate protections, safeguards, and policies for handling data and mitigating information security, data privacy and legal risks. Furthermore, the regulatory and legal landscape regarding AI is rapidly evolving and the Company may be challenged to timely comply in a cost-effective manner.

Through our sales and marketing activities, we collect and store personal information that our customers provide to us. We also gather and retain information about our associates in the normal course of business. Under certain circumstances, we may share information with third parties that assist us in conducting our business, as required by law, or otherwise in accordance with our privacy policy. Failure to protect this information, or failure to comply with applicable data protection and privacy laws, could result in legal, regulatory, reputational, and financial harm.

Our technology systems have been, and may be in the future, disrupted from circumstances beyond our control, as we regularly defend against and respond to data security related attacks. Cyber-attackers have targeted and accessed, and may in the future again target and, if successful, access information stored in our or certain third parties’ systems in order to misappropriate confidential customer or business information. The rapid evolution and increased adoption of AI and related technologies may also intensify the risk that our technology systems are targeted. Due to ongoing geopolitical conflicts, there is an increased possibility of cyberattacks that could either directly or indirectly affect our operations. Although we have implemented procedures to protect our information, and require third parties we interact with to do the same, we cannot be certain that our security systems will successfully defend against, or be able to effectively respond to, cyberattacks as they become more difficult to detect and defend. Further, a Kroger associate, a contractor or other third party with whom we interact may in the future circumvent our security measures in order to obtain information or may inadvertently cause a breach involving information. In addition, hardware, software or applications we may use may have inherent defects, vulnerabilities, or could be inadvertently or intentionally applied or used in a way that could compromise our information security.

Our cybersecurity program, continued investment in our information technology systems, and our processes to evaluate and select vendors with reasonable information security controls may not effectively insulate us from potential attacks, data breaches or disruptions to our business operations, which could result in a loss of customers or business information, negative publicity, damage to our reputation, and exposure to claims from customers, financial institutions, regulatory authorities, payment card associations, associates and other persons. Any such events could have an adverse effect on our business, financial condition, results of operations or cash flows and may not be covered by our insurance. In addition, compliance with rapidly changing privacy and information security laws and standards may result in significant expense due to increased investment in technology and the development of new operational processes and may require us to devote significant management resources to address these issues. The costs of attempting to protect against the foregoing risks and the costs of responding to cyberattacks are significant. Following a cyberattack, remediation efforts may not be successful, and a cyberattack could result in interruptions, delays or cessation of service, and loss of existing or potential customers. In addition, breaches of our and/or our vendors’ security measures and the unauthorized dissemination of sensitive personal information or confidential information about us or our customers could expose our customers’ private information and our customers to the risk of financial or medical identity theft, or expose us or other third parties to a risk of loss or misuse of this information, and result in investigations, regulatory enforcement actions, material fines and penalties, loss of customers and business relationships, litigation or other actions which could have a material adverse effect on our brands, reputation, business, financial condition, results of operations or cash flows.

Data governance failures can adversely affect our reputation and business. A significant portion of our business depends on our customers’ willingness to entrust us with their personal information. Events that adversely affect that trust, including inadequate disclosure to our customers of our uses of their information, failures to honor new and evolving data privacy rights and laws, failing to keep our information technology systems and our customers’ sensitive information secure from significant attack, theft, damage, loss or unauthorized disclosure or access, whether as a result of our action or inaction (including human error) or that of our business associates, vendors or other third parties, could adversely affect our brand and reputation and operating results and also could expose us to mandatory disclosure to the media, litigation (including class action litigation), governmental investigations and enforcement proceedings, material fines, penalties and/or remediation costs, and compensatory, special, punitive and statutory damages, consent orders, and/or injunctive relief, any of which could adversely affect our businesses, financial condition, results of operations or cash flows. Large scale data breaches at other entities, including supply chain related security vulnerabilities, increase the challenge we face in maintaining the security of our information technology systems and proprietary information and of our customers’ information. There can be no assurance that such failures will not occur, or if any do occur, that we will detect them or that they can be sufficiently remediated.

The use of data by our business and our business associates is highly regulated. Privacy and information-security laws and regulations change, and compliance with them may result in cost increases due to, among other things, systems changes and the development of new processes. If we, our third-party service providers, or those with whom we share information fail to comply with laws and regulations, or self-regulatory regimes, that apply to all or parts of our business, such as section 5 of the FTC Act, the California Consumer Privacy Act, the Health Insurance Portability and Accountability Act, or applicable international laws such as the EU General Data Protection Regulation, our reputation could be damaged, possibly resulting in lost business, and we could be subjected to additional legal risk or financial losses as a result of non-compliance.

PAYMENT SYSTEMS

We accept payments using a variety of methods, including cash and checks, select credit and debit cards, and Kroger Pay, a mobile payment solution. As we offer new payment options to our customers, we may be subject to additional rules, regulations, compliance requirements, and higher fraud losses. For certain payment methods, we pay interchange and other related acceptance fees, along with additional transaction processing fees. We rely on third parties to provide payment transaction processing services for credit and debit cards. It could disrupt our business if these companies become unwilling or unable to provide these services to us, including due to short-term disruption of service. We are also subject to evolving payment card association and network operating rules, including data security rules, certification requirements and rules governing electronic funds transfers. For example, we are subject to Payment Card Industry Data Security Standards, which contain compliance guidelines and standards with regard to our security surrounding the physical and electronic storage, processing and transmission of individual cardholder data. If our payment card terminals or internal systems are breached or compromised, we may be liable for card re-issuance costs and other costs, subject to fines and higher transaction fees, and lose our ability to accept card payments from our members, or if our third-party service providers’ systems are breached or compromised, our business, financial condition, results of operations or cash flows could be adversely affected.

INDEBTEDNESS

Our indebtedness could reduce our ability to obtain additional financing for working capital, mergers and acquisitions or other purposes and could make us vulnerable to future economic downturns as well as competitive pressures. If debt markets do not permit us to refinance certain maturing debt, we may be required to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness. Changes in our credit ratings, or in the interest rate environment, could have an adverse effect on our financing costs and structure.

GOVERNMENT REGULATION, LEGAL PROCEEDINGS AND INSURANCE

We are subject to various laws, regulations, and administrative practices that affect our business, including laws and regulations involving antitrust and competition, privacy, data protection, environmental, healthcare, anti-bribery, anti- corruption, tax, accounting, and financial reporting or other matters. In addition, certain states have adopted Extended Producer Responsibility (“EPR”) packaging legislation with which we must comply. These and other rapidly changing laws, regulations, policies and related interpretations, changes in the regulatory environment in which we operate, along with changes in federal policy and at regulatory agencies, as well as increased enforcement actions by various governmental and regulatory agencies, create challenges for us, may alter the environment in which we do business and may increase the ongoing costs of compliance, which could adversely affect our financial condition, results of operations and cash flows. If we are unable to continue to meet these challenges and comply with all laws, regulations, policies and related interpretations, it could negatively affect our reputation and our business results. Additionally, we are currently, and in the future may be, subject to a number of inquiries, investigations, claims, proceedings, and requests for information from governmental agencies or private parties, the adverse outcomes of which could harm our business. Failure to successfully manage these new or pending regulatory and legal matters and resolve such matters without significant liability or damage to our reputation may adversely affect our financial condition, results of operations and cash flows. Furthermore, if new or pending legal or regulatory matters result in fines or costs in excess of the amounts accrued to date, that may also materially affect our financial condition, results of operations or cash flows.

Increasing governmental and societal attention to responsible business matters, including expanding voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess, and report and could negatively affect our reputation. Additionally, there is some indication that sustainability goals are becoming more controversial, as some governmental entities in the United States and certain investor and other constituencies question the appropriateness of or object to sustainability initiatives. We may face criticism as a result of Thriving Together, our responsible business strategy, from certain stakeholders, including governmental authorities, regulators, shareholders and customers. We have established and publicly announced certain goals which we may refine in the future. The execution of the strategy to achieve these goals is subject to risks and uncertainties, many of which may be outside of our control and prove to be more costly than we anticipate. These risks and uncertainties include, but are not limited to, our ability to achieve our goals within the currently projected costs and the expected timeframes; unforeseen operational and technological difficulties; the outcome of research efforts and future technology developments; and the success of our collaborations with and reliance on third parties. Any failure, or perceived failure, to achieve these goals or the setting or publication of certain targets could damage our reputation and customer, investor and other stakeholder relationships, and may even result in regulatory enforcement action. Such conditions could have an adverse effect on our business, financial condition, results of operations or cash flows. In addition, new or changing regulation or public opinion regarding our sustainability goals or our actions to achieve them may result in adverse effects on our financial performance, reputation or demand for our services and products, or may otherwise result in obligations and liabilities that cannot be predicted or estimated at this time.

Additionally, we must comply with numerous provisions regulating, among other things, health and sanitation standards, food labeling and safety, prescriptions, controlled substances, zoning, vehicle operations, fuel operations, equal employment opportunity, minimum wages and licensing for the sale of food, drugs, and alcoholic beverages. We cannot predict future laws, regulations, interpretations, administrative orders, or applications, or the effect they may have on our operations. They could, however, significantly increase the cost of doing business. They also could require the reformulation of some of the products that we sell (or manufacture for sale to third parties) to meet new standards. We also could be required to recall or discontinue the sale of products that cannot be reformulated. These changes could result in additional record keeping, expanded documentation of the properties of certain products, expanded or different labeling, or scientific substantiation. Any or all of these requirements could have an adverse effect on our financial condition, results of operations or cash flows.

We currently are a party to, and will continue to be a party to, third-party legal proceedings, including matters involving personnel and employment issues, personal injury, property damage, privacy, contract disputes, private rights of action under certain regulations and other proceedings, including but not limited to opioid litigation and litigation with Albertsons. Some of these proceedings are brought by individuals and others purport to be brought as class actions on behalf of similarly situated parties. Some of these proceedings could result in a substantial loss to Kroger. We estimate our exposure to these legal proceedings and establish accruals for the estimated liabilities, where it is reasonably possible to estimate and where an adverse outcome is probable. Assessing and predicting the outcome of these matters involves substantial uncertainties. Adverse outcomes in these legal proceedings, or changes in our evaluations or predictions about the proceedings, could have an adverse effect on our financial condition, results of operations or cash flows. Please also refer to the “Litigation” and “Opioids” sections in Note 12 to the Consolidated Financial Statements.

We use a combination of insurance and self-insurance to provide for potential liability for workers’ compensation, automobile and general liability, property, director and officers’ liability, cyber risk exposure and associate health care benefits. Any actuarial projection of losses is subject to a high degree of variability. With respect to insured matters, we are liable for retention amounts that vary by the nature of the claim, and some losses may not be covered by insurance. Changes in legal claims, trends and interpretations, variability in inflation rates, changes in the nature and method of claims settlement, benefit level changes due to changes in applicable laws, insolvency of insurance carriers, and changes in discount rates could all affect our financial condition, results of operations or cash flows.

MULTI-EMPLOYER PENSION OBLIGATIONS

As discussed in more detail below in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies—Multi-Employer Pension Plans,” Kroger contributes to several multi-employer pension plans based on obligations arising under collective bargaining agreements with unions representing associates covered by those agreements. We believe the present value of actuarially accrued liabilities in most of these multi-employer plans exceeds the value of the assets held in trust to pay benefits, and we expect that Kroger’s contributions to most of these funds will increase over the next few years. A significant increase to those funding requirements could adversely affect our financial condition, results of operations or cash flows. Despite the fact that the pension obligations of these funds are not the liability or responsibility of the Company, except as noted below, there is a risk that the agencies that rate our outstanding debt instruments could view the underfunded nature of these plans unfavorably, or adjust their current views unfavorably, when determining their ratings on our debt securities. Any downgrading of our debt ratings likely would adversely affect our cost of borrowing and access to capital.

We have been designated as the named fiduciary for, and currently bear the investment risk of two multi-employer pension plans in which we participate. If investment results for these plans fail to meet our expectations, we could be required to make additional contributions to fund a portion of or the entire shortfall, which could have an adverse effect on our business, financial condition, results of operations or cash flows.

INTEGRATION OF NEW BUSINESS AND STRATEGIC ALLIANCES

We enter into mergers, acquisitions and strategic alliances with expected benefits including, among other things, operating efficiencies, procurement savings, innovation and sharing of best practices, that may allow for future growth. Achieving the anticipated or desired benefits may be subject to a number of significant challenges and uncertainties, including, without limitation, whether unique corporate cultures will work collaboratively in an efficient and effective manner, the coordination of geographically separate organizations, the possibility of imprecise assumptions underlying expectations regarding potential synergies, capital requirements, the integration process (including the integration of internal controls into our business operations), unforeseen expenses and delays and competitive factors in the marketplace. We could also encounter unforeseen transaction and integration-related costs or other circumstances such as unforeseen liabilities or other issues. Many of these potential circumstances are outside of our control and any of them could result in increased costs, decreased revenue, decreased synergies and the diversion of management time and attention. If we are unable to achieve our objectives within the anticipated time frame, or at all, the expected benefits may not be realized fully or at all, or may take longer to realize than expected, which could have an adverse effect on our business, financial condition, results of operations or cash flows.

FUEL

We sell a significant amount of fuel in our 1,731 fuel centers, which could face increased regulation, including due to climate change or other environmental concerns, and demand could be affected by concerns about the effect of emissions on the environment, as well as retail price increases. We are unable to predict future regulations, environmental effects, political unrest, acts of war or terrorism, disruptions to the economy, including but not limited to pandemics and other health crises, geopolitical conflicts, tariffs and other matters that affect the cost and availability of fuel, and how our customers will react to such factors, which could adversely affect our financial condition, results of operations or cash flows.

ECONOMIC CONDITIONS

Our operating results could be materially affected by changes in overall economic conditions and other economic factors that affect consumer confidence and spending, including discretionary spending. Future economic conditions affecting disposable consumer income such as employment levels, business conditions, overall economic slowdown or recession, changes in housing market conditions, changes in government benefits such as SNAP/EBT, student loan relief, or child care credits, the availability of credit, interest rates, inflation, disinflation or deflation, tax rates, tariffs and other matters could reduce consumer spending. Inflation could materially affect our operating results through increases to our cost of goods, supply chain costs and labor costs. In addition, the economic factors listed above, or any other economic factors or circumstances, including those resulting in higher transportation, labor, insurance or healthcare costs or commodity prices, can increase our merchandise costs and operating, general and administrative expenses and otherwise adversely affect our financial condition, results of operations or cash flows. Increased fuel prices also have an effect on consumer spending and on our costs of producing and procuring products that we sell. A deterioration in overall economic conditions, including uncertainty caused by inflation rate volatility, could adversely affect our business in many ways, including reducing sales and gross margins. Geopolitical and catastrophic events, such as wars and conflicts, civil unrest, acts of terrorism or other acts of violence, could materially affect our results, including several occurrences which have taken place at our locations, including active shooter situations, the loss of merchandise as a result of shrink or industry-wide theft and organized retail crime, pandemics or other health crises, and other matters that may reduce consumer spending, could materially affect our financial condition, results of operations or cash flows. We regularly maintain cash balances at third-party financial institutions in excess of the Federal Deposit Insurance Corporation insurance limit and are therefore reliant on banks and other financial institutions to safeguard and allow ready access to these assets. If banks or financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents and investments may be threatened. We are unable to predict how the global economy and financial markets will perform or their volatility. If the global economy and financial markets do not perform as we expect, it could adversely affect our business, financial condition, results of operations or cash flows.

Our operating results could be adversely affected by any future disease outbreak, including pandemics, epidemics, or similar widespread health concerns. We cannot predict with certainty the extent that our operations may be affected by any effects of the foregoing on us or on our customers, suppliers, vendors, and other business partners, and each of their financial conditions; however, any adverse effect on these parties could materially and adversely affect us. To the extent that any health crisis affects the U.S. and global economy and our business, it may also heighten other risks described in this section, including but not limited to those related to consumer behavior and expectations, competition, implementation of strategic initiatives, cybersecurity threats, payment-related risks, supply chain disruptions, labor availability and cost, litigation and operational risk as a result of regulatory requirements.

WEATHER, NATURAL DISASTERS AND OTHER EVENTS

A large number of our stores, distribution facilities and fulfillment centers are geographically located in areas that are susceptible to hurricanes, tornadoes, floods, droughts, wildfires, ice and snow storms, and earthquakes. Weather conditions and natural disasters have, and may again in the future, disrupt our operations at one or more of our facilities, interrupt the delivery of products to our stores, substantially increase the cost of products, including supplies and materials, and substantially increase the cost of energy needed to operate our facilities or deliver products to our facilities. Moreover, the effects of climate change, including those associated with extreme weather events, may affect our ability to procure needed commodities at costs and in quantities that are optimal for us or at all. Adverse weather or natural disasters and other matters that could reduce consumer spending, could materially affect our financial condition, results of operations or cash flows.

CLIMATE IMPACT

The long-term effects of global climate change present both physical risks, such as extreme weather conditions or rising sea levels, and transition risks, such as regulatory or technology changes, which are expected to be widespread and unpredictable. These changes could over time affect, for example, the availability and cost of products, commodities and energy including utilities, which in turn may affect our ability to procure goods or services required for the operation of our business at the quantities and levels we require. In addition, many of our operations and facilities are in locations that may be affected by the physical risks of climate change, and we face the risk of losses incurred as a result of physical damage to stores, distribution or fulfillment centers, loss or spoilage of inventory and business interruption caused by such events. We also use natural gas, diesel fuel, gasoline and electricity in our operations, all of which could face increased regulation and cost increases as a result of climate change or other environmental concerns. Transitioning to alternative energy sources, such as renewable electricity or electric vehicles, and investments in new technologies, could incur higher costs. Regulations limiting greenhouse gas emissions and energy inputs may also increase in the future, which may increase our costs associated with compliance, tracking, reporting, and sourcing. These events and their effects could otherwise disrupt and adversely affect our operations and could have an adverse effect on our financial condition, results of operations or cash flows.

SUPPLY CHAIN

Disruption in our global supply chain could negatively affect our business. The products we sell are sourced from a wide variety of domestic and international vendors, and any future disruption in our supply chain or inability to find qualified vendors and access products that meet requisite quality and safety standards in a timely and efficient manner could adversely affect our business. The loss or disruption of such supply arrangements for any reason, labor disputes, loss or impairment of key manufacturing sites, acts of war or terrorism, disruptive global political events, quality control issues, a supplier’s financial distress, natural disasters or health crises, regulatory actions or ethical sourcing issues, trade sanctions, tariffs or other external factors over which we have no control, could interrupt product supply and, if not effectively managed and remedied, have an adverse effect on our business, financial condition, results of operations or cash flows.

ITEM 1B.	UNRESOLVED STAFF COMMENTS.

None.

ITEM 1C.	CYBERSECURITY.

RISK MANAGEMENT AND STRATEGY

Securing Kroger’s business information, intellectual property, customer and employee data and technology systems is essential for the continuity of our businesses, meeting applicable regulatory requirements and maintaining the trust of our stakeholders. We have adopted enterprise cybersecurity risk mitigation and governance processes, which are set forth in the Kroger Cybersecurity Risk Management (“CRM”) program, the Kroger Third-Party Cybersecurity Risk Management (“TPCRM”) program and the Kroger Cyber Incident Response Plan (“IR Plan”). Our approach is guided by the principles of the CRM program, which includes monitoring threats and vulnerabilities and assessing and monitoring related controls, supporting the Corporate Information Security function, the Chief Information Security Officer (“CISO”) and Chief Digital Officer (“CDO”). Kroger’s cybersecurity policies, standards, processes, and practices are integrated into our overarching risk management system in an effort to enhance our ability to safeguard our operations and information, which includes quarterly cybersecurity reporting to the Board, delivered by senior leadership.

Kroger Cyber Risk Management Program

The CRM program was developed in collaboration with third-party consultants and is aligned with the National Institute of Standards and Technology (“NIST”), Risk Management Framework (“RMF”), Cybersecurity Framework (“CSF”) and the International Organization for Standardization 27001 (“ISO 27001”). However, this does not mean that we will meet, or maintain, any particular technical standard, specification, framework, or requirement in the future, but rather we use NIST, RMF, CSF and ISO 27001 as a guide to help us identify, assess and manage cybersecurity risks relevant to our business. The program includes security and privacy, risk-based controls, and incorporates lessons learned from cybersecurity incidents. Under Kroger’s CRM program, cyber risks, including cyber threats and cyber events/incidents, are assessed, treated, and monitored on a continuous basis. We integrate lessons learned from incident response and cyber risk mitigation into our cyber risk management strategy, in an effort to improve overall cybersecurity on an ongoing basis. Kroger's CRM program is spearheaded by specific management positions, chosen for their expertise in the field as further discussed below.

In line with cyber risk management best practices, we have collaborated with recognized third-party experts as needed to align the CRM program’s foundational processes, metrics, monitoring, and reporting with common frameworks such as the NIST RMF and the NIST CSF.

Third-Party Cyber Risk Management

Recognizing the potential vulnerabilities posed by third-party relationships, Kroger has implemented a comprehensive TPCRM program. The TPCRM program is designed to assess third-party cybersecurity risks by employing third-party cyber risk assessments, vendor tiering, and a dedicated team tasked with recommending holistic improvements to strengthen Kroger’s cybersecurity posture, sourcing, and contracting processes. Kroger’s Enterprise Security Operations (“ESO”) responds to known third-party incidents on a continuous basis. ESO is a part of the Corporate Information Security (“CIS”) department and is responsible for detecting, responding to, and escalating security incidents. We partner directly with business stakeholders and technology custodians to determine an appropriate response to manage incident risk to minimize the effect to the business. This response process is a regular and critical function of the ESO and is defined in a separate appendix to the IR Plan. Any material risk identified from these incidents is escalated and communicated using formal severity and impact criteria as defined in the IR Plan.

Kroger Cyber Incident Response Plan

The IR Plan documents the processes by which information security events are detected, identified, prioritized, and analyzed. The Kroger ESO, CISO, legal counsel, and corporate affairs stakeholders are then engaged depending on the incident’s scope, business effect, and potential material risk. This cross-functional team is responsible for assessing an appropriate response and mitigation pathway. Once security events are identified through the enterprise detection and monitoring ecosystem, the IR Plan sets forth an incident prioritization/decision workflow to determine scope, business effect, and potential material risk. This workflow is implemented through collaboration with the ESO, CISO, legal counsel, and corporate affairs stakeholders and correlates to industry standard severity levels.

In addition to the processes outlined above, we have also implemented an information security training program for employees that includes security awareness training related to cyber security risks, simulated phishing emails and regular communication to the enterprise regarding cyber security risks.

We experience cybersecurity threats and incidents from time to time. We are not aware of any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, our financial condition, results of operations or cash flows, and we have not experienced a cybersecurity threat or incident that has materially affected Kroger in at least the last three years. There can be no assurance that cybersecurity threats will not have a material effect on us, including our business strategy, our financial condition, results of operations or cash flows. Please see “Item 1A. Risk Factors” for more information on our cybersecurity-related risks.

GOVERNANCE

Protection of our customers’ data is a fundamental priority for our Board and management team. Our cyber risk management team is integrated into our CIS function and is led by our CDO and CISO. The cyber risk management team reports to the CISO and has combined experience in information security, governance, and compliance, including domains such as engineering, architecture, cybersecurity, and privacy. This team is responsible for defining the program, cybersecurity governance, and gathering insights related to assessing, identifying, and managing cybersecurity threat risks, their severity, and mitigations.

Kroger’s CDO reports to the Chief Executive Officer and leads technology and digital capabilities for the Kroger Co., including the overall cybersecurity strategy. Kroger’s CDO has over 20 years of both leading and transforming technology, digital growth, and ecommerce in the retail and food industry. He graduated with a master’s degree in business administration and management from Ecole Supérieure de Commerce de Chambéry, Rhône-Alpes, France. Kroger’s CISO brings over 20 years of experience developing and leading security and risk programs. His experience includes governance, information security, and threat management. He graduated from Miami University with a bachelor’s degree in management information systems and marketing.

The Audit Committee of Kroger’s Board of Directors is charged with oversight of data privacy and cybersecurity risks. Kroger’s CDO and CISO provide quarterly updates on cybersecurity risks and related mitigating actions to the Audit Committee, meet with the full Board at least annually and inform the Audit Committee immediately if a cybersecurity incident is deemed material. They report to the Audit Committee and the Board on compliance and regulatory issues, provide updates concerning continuously-evolving threats and mitigating actions, and present a NIST Cybersecurity Framework Scorecard. Additionally, the CDO and CISO discuss and present strategies to address geopolitical threats that may affect operations as well as technological changes, such as AI and quantum computing. In overseeing cybersecurity risks, the Audit Committee focuses on aggregated, thematic issues with a risk-based approach. Oversight of cybersecurity risk incorporates strategy metrics, third-party assessments, and internal audit and controls. An independent third party also regularly reports to the Audit Committee and the full Board on cybersecurity, and outside counsel advises the Board on best practices for cybersecurity oversight by the Board, and the evolution of that oversight over time. Management also reports on strategic key risk indicators, ongoing initiatives, and significant incidents and their effect.

ITEM 2.	PROPERTIES.

As of January 31, 2026, we operated approximately 2,700 owned or leased supermarkets, distribution warehouses, customer fulfillment centers and food production plants through divisions, subsidiaries or affiliates. These facilities are located throughout the United States. We generally own store equipment, fixtures and leasehold improvements, as well as processing and food production equipment. The total cost of our owned assets and finance leases at January 31, 2026, was $60.0 billion while the accumulated depreciation was $35.8 billion.

We lease certain store real estate, warehouses, distribution centers, office space and equipment. We operate in leased facilities in approximately half of our store locations, with lease terms that generally range from 10 to 20 years, and options to renew for varying terms at our sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases include escalation clauses and/or payment of executory costs such as property taxes, utilities or insurance and maintenance. Rent expense for leases with escalation clauses or other lease concessions are accounted for on a straight-line basis over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Certain properties or portions thereof are subleased to others for periods generally ranging from one to 20 years. For additional information on lease obligations, see Note 9 to the Consolidated Financial Statements.

ITEM 3.	LEGAL PROCEEDINGS.

Incorporated by reference herein is information regarding certain legal proceedings in which we are involved as set forth under “Litigation” and “Opioids” contained in Note 12 to the Consolidated Financial Statements.

ITEM 4.	MINE SAFETY DISCLOSURES.

Not applicable. 20

PART II

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is listed on the New York Stock Exchange under the symbol “KR.” As of March 25, 2026, there were 25,447 shareholders of record.

During 2025, we paid two quarterly cash dividends of $0.32 per share and two quarterly cash dividends of $0.35 per share. During 2024, we paid two quarterly cash dividends of $0.29 per share and two quarterly cash dividends of $0.32 per share. On March 1, 2026, we paid a quarterly cash dividend of $0.35 per share. On March 12, 2026, we announced that our Board of Directors declared a quarterly cash dividend of $0.35 per share, payable on June 1, 2026, to shareholders of record at the close of business on May 15, 2026. We currently expect to continue to pay comparable cash dividends on a quarterly basis, that will increase over time, depending on our earnings and other factors, including approval by our Board.

For information on securities authorized for issuance under our existing equity compensation plans, see Item 12 under the heading “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

PERFORMANCE GRAPH

Set forth below is a line graph comparing the five-year cumulative total shareholder return on our common shares, based on the market price of the common shares and assuming reinvestment of dividends, with the cumulative total return of companies in the Standard & Poor’s 500 Stock Index and a peer group composed of food and drug companies.


		Base		INDEXED RETURNS									****
		Period		Years Ending									****
Company Name/Index		2020		2021		2022		2023		2024		2025	****
The Kroger Co.		100		128.57		135.86		142.48		194.80		202.66
S&P 500 Index		100		121.00		112.98		139.92		172.78		201.03
Peer Group		100		118.08		114.43		133.33		193.49		217.65

Kroger’s fiscal year ends on the Saturday closest to January 31.

Data supplied by Standard & Poor’s.

The foregoing Performance Graph will not be deemed incorporated by reference into any other filing, absent an express reference thereto.

* Total assumes $100 invested on January 30, 2021, in The Kroger Co., S&P 500 Index, and the Peer Group, with reinvestment of dividends.

** The Peer Group consists of Albertsons Companies, Inc., Costco Wholesale Corporation, CVS Health Corporation, Koninklijke Ahold Delhaize N.V., Target Corporation, Walgreens Boots Alliance Inc. (included through August 29, 2025 when it was taken private) and Walmart Inc.

The following table presents information on our purchases of our common shares during the fourth quarter of 2025:

ISSUER PURCHASES OF EQUITY SECURITIES


							Approximate Dollar		****
							Value of Shares		****
						Total Number of	that May Yet Be		****
						Shares Purchased	Purchased Under		****
		Total Number	Average			as Part of Publicly	the Plans or		****
		of Shares	Price Paid Per			Announced Plans	Programs^(4)(5)^		****
Period^(1)^		Purchased^(2)^	Share^(2)^			or Programs^(3)^	(in millions)		****
First period - four weeks
November 9, 2025 to December 6, 2025		8,167,017	$	66.66		8,166,077	$	1,245
Second period - four weeks
December 7, 2025 to January 3, 2026		8,958,313	$	63.35		8,952,475	$	2,685
Third period - four weeks
January 4, 2026 to January 31, 2026		10,599,646	$	62.66		10,599,646	$	2,028
Total		27,724,976	$	64.06		27,718,198	$	2,028
(1)	The reported periods conform to our fiscal calendar composed of thirteen 28-day periods. The fourth quarter of 2025 contained three 28-day periods.
---	---
(2)	Includes (i) shares repurchased under the December 2024 Repurchase Program described below in (4), (ii) shares repurchased under a program announced on December 6, 1999 to repurchase shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith (“1999 Repurchase Program”), and (iii) 6,778 shares that were surrendered to Kroger by participants under our long-term incentive plans to pay for taxes on restricted stock awards. Excise tax on share repurchases in excess of issuances is reflected in the average price paid per share.
---	---
(3)	Represents shares repurchased under the December 2024 Repurchase Program and the 1999 Repurchase Program.
---	---
(4)	On December 23, 2025, we announced that our Board of Directors approved a $2.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, including accelerated stock repurchase (“ASR”) transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “December 2025 Repurchase Program”). The December 2025 Repurchase Program authorization is incremental to the existing December 2024 Repurchase Program. On December 11, 2024, we announced that our Board of Directors approved a $7.5 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, including ASR transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “December 2024 Repurchase Program”). The amounts shown in this column reflect the amount remaining under the December 2024 Repurchase Program and the December 2025 Repurchase Program as of the specified period end dates. Amounts available under the 1999 Repurchase Program are dependent upon option exercise activity. The authority remaining under the December 2025 Repurchase Program, the December 2024 Repurchase Program, and the 1999 Repurchase Program do not have any expiration dates, but may be suspended or terminated by our Board of Directors at any time.
---	---
(5)	Excludes excise tax on share repurchases in excess of issuances.
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ITEM 6.	RESERVED .

Not applicable.

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of financial condition and results of operations of The Kroger Co. should be read in conjunction with the “Forward-looking Statements” section set forth in Part I and the “Risk Factors” section set forth in Item 1A of Part I of this Annual Report on Form 10-K. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this Annual Report on Form 10-K, as well as Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended February 1, 2025, which provides additional information on comparisons of fiscal years 2024 and 2023.

OUR VALUE CREATION MODEL – DELIVERING CONSISTENT AND ATTRACTIVE TOTAL SHAREHOLDER RETURN

Kroger’s proven value creation model is allowing us to deliver today and invest for the future. The foundation of our value creation model is our omnichannel retail business, including fuel and health and wellness. By executing on our go-to-market strategy built on Fresh, Our Brands, Personalization and eCommerce, we are creating a shopping experience that builds loyalty and grows sales. Our retail business generates traffic and data which accelerates growth in our high operating margin alternative profit businesses, like retail media. In turn, the value generated from these businesses enables us to reinvest back into our retail business.

We are focused on our top priorities and delivering an exceptional customer experience to accelerate this flywheel effect. By expanding our store network and improving our eCommerce capabilities, we expect to grow households and increase sales. Our model provides various ways to generate net earnings growth.

We believe this will be achieved by:

●

Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our retail business and is supported by continued strategic investments in our associates and greater value for our customers to ensure we deliver a full, fresh and friendly experience for every customer, every time. In an effort to serve more households, we plan to invest in major storing projects that allow us to increase both in-store and eCommerce sales. As more and more customers incorporate eCommerce into their permanent routines, we expect eCommerce sales to grow at a double-digit rate – a faster pace than other food at home sales – over time; and

●

Expanding operating margin through long-term initiatives in gross margin, growing alternative profit businesses and productivity and cost savings initiatives that are focused on simplifying our business and modernizing our ways of working. Together, we expect these will enable us to improve operating margin, while balancing strategic price investments for customers and investments in associates to improve customer experience.

We expect to continue to generate strong free cash flow and are committed to being disciplined with capital deployment in support of our value creation model and stated capital allocation priorities. Our first priority is to invest in the business through attractive high return opportunities that drive long-term sustainable net earnings growth. We are committed to maintaining our current investment grade debt rating and returning to our net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50. We also expect to continue to grow our dividend over time and return excess cash to shareholders via stock repurchases, subject to Board approval.

We expect our value creation model will result in total shareholder return within our target range of 8% to 11% over time.

2025 EXECUTIVE SUMMARY

We achieved strong results in 2025, driven by continued performance in eCommerce and pharmacy along with momentum in Fresh and Our Brands. We saw underlying improvements in market share trends and solid sales growth that reflect meaningful progress and demonstrate the strengthening of the business. Food volumes improved, and grocery sales were a larger percentage of our sales mix, leading to the final period of the quarter resulting in positive share gains. Through continued price investments, disciplined cost management, and improved store execution, we maintained our competitive position against our major competitors.

We will continue to simplify our business and improve our cost structure to redeploy those savings into areas that drive growth. Our refreshed hybrid fulfillment model and ongoing reviews of non-core assets enable us to better allocate resources to core priorities and to reinvest savings into areas that drive growth and support lower prices for customers. We have accelerated new store investment and are leveraging our stores and delivery partners to support our presence in key markets. Additionally, we invested in service and labor hours to ensure that our stores are well-staffed, and we remain focused on equipping our associates with the tools, technology, data, and support needed to serve customers well. Collectively, these actions support faster and more efficient execution of our strategies, positioning us to continue delivering value for both our customers and to generate attractive and sustainable returns for shareholders.

The following table provides highlights of our financial performance:

Financial Performance Data

($ in millions, except per share amounts)



	January 31,			Percentage		February 1,
	2026			Change		2025
Sales^(1)^	$	147,642		0.4	%	$	147,123
Sales without fuel^(1)^	$	134,058		1.4	%	$	132,150
Identical sales excluding fuel and Adjusted Items^(2)^		2.9	%	N/A			1.5	%
FIFO gross margin, excluding rent, depreciation and amortization, fuel and Adjusted Items, bps increase^(1)^		0.44		N/A			0.32
OG&A rate, excluding fuel and Adjusted Items, bps increase^(1)^		0.29		N/A			0.31
Operating profit^(1)^	$	1,890		(50.9)	%	$	3,849
Adjusted FIFO operating profit^(1)^	$	4,905		4.9	%	$	4,674
Net earnings attributable to The Kroger Co.	$	1,016		(61.9)	%	$	2,665
Adjusted net earnings attributable to The Kroger Co.	$	3,199		(1.4)	%	$	3,246
Net earnings attributable to The Kroger Co. per diluted common share	$	1.54		(58.0)	%	$	3.67
Adjusted net earnings attributable to The Kroger Co. per diluted common share	$	4.85		8.5	%	$	4.47
Dividends paid	$	885		0.2	%	$	883
Dividends paid per common share	$	1.34		9.8	%	$	1.22
Share repurchases^(3)^	$	3,383		N/A		$	4,194
(Decrease) increase in total debt, including obligations under finance leases compared to prior fiscal year end	$	(339)		N/A		$	5,679

(1)	Total sales in 2024 includes $2,021 of Kroger Specialty Pharmacy sales. In 2025, the sale of Kroger Specialty Pharmacy had a positive effect on the FIFO gross margin rate, excluding rent, depreciation and amortization, fuel and Adjusted Items, as defined below, and a negative effect on the OG&A rate, excluding fuel and the 2025 and 2024 Adjusted Items, as defined below. It had no material effect on operating profit.
(2)	For the first quarter of 2025, identical sales, excluding fuel, were adjusted to exclude stores involved in the labor disputes in Colorado. Identical sales, excluding fuel, were excluded for the first four weeks of the first quarters of 2025 and 2024 for stores involved in this labor dispute.
---	---
(3)	The share repurchases include excise tax related to the shares repurchased, the final delivery under the ASR agreement that occurred during the third quarter of 2025 (see Note 13 to the Consolidated Financial Statements), the 1999 Repurchase Program and the resumed open market repurchases in 2025 under the December 2024 Repurchase Program. The 1999 Repurchase Program and the December 2024 Repurchase Program are defined in the “Common Share Repurchase Programs” section below.
---	---

OVERVIEW

Notable items for 2025 are:

Shareholder Return

●	Achieved net earnings attributable to The Kroger Co. per diluted common share of $1.54. These results include $2.5 billion of fulfillment network impairment and related charges.

●	Achieved adjusted net earnings attributable to The Kroger Co. per diluted common share of $4.85, which represents a 9% increase compared to 2024.

●	Achieved operating profit of $1.9 billion. These results include $2.5 billion of fulfillment network impairment and related charges.

●	Achieved adjusted FIFO operating profit of $4.9 billion, which represents a 5% increase compared to 2024.

●	Generated cash flows from operations of $7.3 billion, which represents a 26% increase compared to 2024.

●	Returned $4.3 billion to shareholders from share repurchases and dividend payments.

Other Financial Results

●	Identical sales, excluding fuel and Adjusted Items, increased 2.9% in 2025, compared to 2024, primarily driven by eCommerce, Pharmacy and Fresh departments.

●

eCommerce sales increased 16% compared to 2024. Excluding the effect of fulfillment center exits in markets where Kroger does not operate stores, the sale of Vitacost.com, and the discontinuation of Ship Marketplace, eCommerce sales increased 17% compared to 2024. eCommerce sales include products ordered online and picked up at our stores and our Delivery solutions. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers and orders placed through third-party platforms. eCommerce sales growth was led by strong demand for our Delivery solutions.

●	Alternative profit streams contributed $1.5 billion of operating profit in 2025.

●	Our LIFO charge was $157 million in 2025, compared to $95 million in 2024. The increase in the LIFO charge was due to higher product cost inflation for 2025, compared to 2024.

Significant Events

●	During the first quarter of 2025, we recognized store closure costs of $100 million, $77 million net of tax, related to the planned closing of approximately 60 stores. As a result of these store closures, we expect a modest financial benefit and we are committed to reinvesting these savings back into the customer experience.

●	During the second quarter of 2025, we approved and implemented a plan to reduce our corporate administrative team by nearly 1,000 associates, resulting in a charge for severance and related benefits of $47 million, $37 million net of tax. This reorganization is expected to increase efficiency and reduce administrative costs, enabling us to reinvest back into our retail business.

●

During 2025, we completed a strategic review of our eCommerce operations with the intention of improving the customer experience while accelerating eCommerce profitability. Following this review, we identified opportunities to optimize our automated fulfillment network by closing facilities in Pleasant Prairie, Wis.; Frederick, Md.; and Groveland, Fla. in January 2026, which had not met operational or financial expectations, and canceled plans for the site in Charlotte, N.C. As a result of these closures and the automated fulfillment network not meeting operational or financial expectations, in 2025, we recorded impairment and related charges of $2.5 billion, $1.9 billion net of tax. We will continue to deliver eCommerce offerings using our store footprint, third-party delivery providers and automated fulfillment facilities where applicable. At the present time, in geographies where we see higher density of demand and better cost structure, we continue to evaluate performance and sustainability of automated fulfillment. These facility closures are expected to have a positive effect on eCommerce operating profit and a neutral effect on identical sales without fuel.

OUR BUSINESS

The Kroger Co. (the “Company” or “Kroger”) was founded in 1883 and incorporated in 1902. Our Company is built on the foundation of our retail grocery business, which includes the added convenience of our retail pharmacies and fuel centers. Our strategy is focused on growing customer loyalty by delivering great value and convenience, and investing in Fresh, Our Brands, Personalization and eCommerce.

We also utilize the data and traffic generated by our retail business to deliver incremental value and services for our customers that generate alternative profit streams. These alternative profit streams would not exist without our core retail business.

Our revenues are predominately earned and cash is generated as consumer products are sold to customers in our stores, fuel centers and via our online platforms. We earn income predominately by selling products at price levels that produce revenues in excess of the costs we incur to make these products available to our customers. Such costs include procurement and distribution costs, facility occupancy and operational costs, and overhead expenses. Our retail operations, which represent substantially all of our consolidated sales, are our only reportable segment.

Kroger is diversified across brands, product categories, channels of distribution, geographies and consumer demographics. Our combination of assets includes the following:

Stores

eCommerce

We offer a convenient shopping experience for our customers regardless of how they choose to shop with us, including Pickup and Delivery. We offer Pickup and Harris Teeter ExpressLane™ — personalized, order online, pick up at the store services — at 2,408 of our supermarkets and provide Delivery, which allows us to offer digital solutions to substantially all of our customers. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers and orders placed through third-party platforms. These channels allow us to serve customers anything, anytime, and anywhere with broad selection, convenience, and price. We also provide relevant customer-facing apps and interfaces that have the features customers want and that are also reliable, easy to use and deliver a seamless customer experience across our store and digital channels. We continue to make meaningful improvements in our eCommerce business and believe it will be an important growth driver and one of the key ways to attract new households.

Media

Our Data

Merchandising and Our Brands

Our Brands products play an important role in our merchandising strategy and represented over $39 billion of our sales in 2025. We own 33 food production plants, primarily bakeries and dairies, which supply approximately 20% of Our Brands units sold in our supermarkets; the remaining Our Brands items are produced to our strict specifications by outside manufacturers.

USE OF NON-GAAP FINANCIAL MEASURES

The accompanying Consolidated Financial Statements, including the related notes, are presented in accordance with U.S. generally accepted accounting principles (“GAAP”). We provide non-GAAP measures, including First-In, First-Out (“FIFO”) gross margin, FIFO operating profit, adjusted FIFO operating profit, adjusted net earnings and adjusted net earnings per diluted share, because management believes these metrics are useful to investors and analysts. These non-GAAP financial measures should not be considered as an alternative to gross margin, operating profit, net earnings and net earnings per diluted share or any other GAAP measure of performance. These measures should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP.

We calculate FIFO gross margin as FIFO gross profit divided by sales. FIFO gross profit is calculated as sales less merchandise costs, including advertising, warehousing and transportation expenses, but excluding the Last-In, First-Out (“LIFO”) charge, rent and depreciation and amortization. FIFO gross margin is an important measure used by management, and management believes FIFO gross margin is a useful metric to investors and analysts because it measures the merchandising and operational effectiveness of our go-to-market strategy.

We calculate FIFO operating profit as operating profit excluding the LIFO charge. FIFO operating profit is an important measure used by management, and management believes FIFO operating profit is a useful metric to investors and analysts because it measures the operational effectiveness of our financial model.

The adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit metrics are important measures used by management to compare the performance of core operating results between periods. We believe adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit are useful metrics to investors and analysts because they present more accurate year-over-year comparisons of our net earnings, net earnings per diluted share and FIFO operating profit because adjusted items are not the result of our normal operations. Net earnings for 2025 include the following, which we define as the “2025 Adjusted Items:”

●

Charges to operating, general and administrative (“OG&A”) of $100 million, $77 million net of tax, for store closures; $161 million, $121 million net of tax, for merger-related litigation and settlement charges; $50 million, $34 million net of tax, for impairment of intangible assets; $47 million, $37 million net of tax, for severance charge and related benefits; $2.5 billion, $1.9 billion net of tax, for fulfillment network impairment and related charges, and credits to OG&A of $6 million, $3 million net of tax, for opioid settlement charges and vendor reserves, and $21 million, $16 million net of tax, for executive stock compensation for a former executive (the “2025 OG&A Adjusted Items”).

●	A loss in other income (expense) of $41 million, $33 million net of tax, for the unrealized loss on investments (the “2025 Other Income (Expense) Adjusted Item”).

●	A reduction to income tax expense of $7 million for executive stock compensation for a former executive income tax adjustment and a reduction to income tax expense of $34 million from recognizing deferred tax assets related to the sale of our Vitacost.com business (the “2025 Income Tax Expense Adjusted Items”).

●	A net charge to Sales, Merchandise costs and OG&A of $44 million, $33 million net of tax, for labor dispute charges (the “Labor Dispute”).

Net earnings for 2024 include the following, which we define as the “2024 Adjusted Items:”

●

Charges to OG&A of $32 million, $24 million net of tax, for severance charge and related benefits, $30 million, $23 million net of tax, for impairment of intangible assets, $25 million, $19 million net of tax, for property losses, $684 million, $489 million net of tax, for merger-related costs, net of a credit to OG&A of $27 million, $21 million net of tax, for opioid settlement charges (the “2024 OG&A Adjusted Items”).

●

A loss in other income (expense) of $148 million, $112 million net of tax, for the unrealized loss on investments, a charge to other income (expense) of $34 million, $26 million net of tax, for merger-related net interest expense and a gain in other income (expense) of $79 million, $60 million net of tax, on the sale of Kroger Specialty Pharmacy (the “2024 Other Income (Expense) Adjusted Items”).

●	A reduction to income tax expense of $31 million from recognizing deferred tax assets related to the sale of our Kroger Specialty Pharmacy business (the “2024 Income Tax Expense Adjusted Item”).

Net earnings for 2023 include $179 million, $144 million net of tax, due to the 53^rd^ week in fiscal year 2023 (the “Extra Week”). In addition, net earnings for 2023 include the following, which we define as the “2023 Adjusted Items:”

●	Charges to OG&A of $316 million, $268 million net of tax, for merger-related costs and $1.5 billion, $1.2 billion net of tax, for opioid settlement charges (the “2023 OG&A Adjusted Items”).

●	A gain in other income (expense) of $151 million, $116 million net of tax, for the unrealized gain on investments (the “2023 Other Income (Expense) Adjusted Item”).

The table below provides a reconciliation of net earnings attributable to The Kroger Co. to adjusted net earnings attributable to The Kroger Co. and a reconciliation of net earnings attributable to The Kroger Co. per diluted common share to adjusted net earnings attributable to The Kroger Co. per diluted common share excluding the 2025, 2024 and 2023 Adjusted Items:

Net Earnings per Diluted Share excluding the Adjusted Items

($ in millions, except per share amounts)


		2025			2024			2023		****
Net earnings attributable to The Kroger Co.		$	1,016		$	2,665		$	2,164

(Income) expense adjustments
Adjustment for loss (gain) on investments^(1)(2)^			33			112			(116)
Adjustment for labor dispute charges^(1)(3)^			33			—			—
Adjustment for store closures^(1)(4)^			77			—			—
Adjustment for executive stock compensation for a former executive^(1)(5)^			(16)			—			—
Adjustment for merger-related costs^(1)(6)^			—			489			268
Adjustment for merger-related litigation and settlement charges^(1)(7)^			121			—			—
Adjustment for property losses^(1)(8)^			—			19			—
Adjustment for merger-related net interest expense^(1)(9)^			—			26			—
Adjustment for opioid settlement charges and vendor reserves^(1)(10)^			(3)			(21)			1,163
Adjustment for the impairment of intangible assets^(1)(11)^			34			23			—
Adjustment for gain on sale of Kroger Specialty Pharmacy^(1)(12)^			—			(60)			—
Adjustment for severance charge and related benefits^(1)(13)^			37			24			—
Adjustment for fulfillment network impairment and related charges^(1)(14)^			1,908			—			—
Executive stock compensation for a former executive income tax adjustment			(7)			—			—
Adjustment for income tax expense on sale of Kroger Specialty Pharmacy			—			(31)			—
Adjustment for income tax expense on sale of Vitacost.com			(34)			—			—
Total Adjusted Items			2,183			581			1,315

Net earnings attributable to The Kroger Co. excluding the Adjusted Items		$	3,199		$	3,246		$	3,479

Extra Week adjustment^(1)(15)^			—			—			(144)

Net earnings attributable to The Kroger Co. excluding the Adjusted Items and the Extra Week adjustment		$	3,199		$	3,246		$	3,335

Net earnings attributable to The Kroger Co. per diluted common share		$	1.54		$	3.67		$	2.96

(Income) expense adjustments
Adjustment for (gain) loss on investments^(16)^			0.05			0.15			(0.17)
Adjustment for labor dispute charges^(16)^			0.05			—			—
Adjustment for store closures^(16)^			0.12			—			—
Adjustment for executive stock compensation for a former executive^(16)^			(0.03)			—			—
Adjustment for merger-related costs^(16)^			—			0.67			0.37
Adjustment for merger-related litigation and settlement charges^(16)^			0.18			—			—
Adjustment for property losses^(16)^			—			0.03			—
Adjustment for merger-related net interest expense^(16)^			—			0.04			—
Adjustment for opioid settlement charges and vendor reserves^(16)^			(0.01)			(0.03)			1.60
Adjustment for the impairment of intangible assets^(16)^			0.05			0.03			—
Adjustment for gain on sale of Kroger Specialty Pharmacy^(16)^			—			(0.08)			—
Adjustment for severance charge and related benefits^(16)^			0.05			0.03			—
Adjustment for fulfillment network impairment and related charges^(16)^			2.91			—			—
Executive stock compensation for a former executive income tax adjustment^(16)^			(0.01)			—			—
Adjustment for income tax expense on sale of Kroger Specialty Pharmacy^(16)^			—			(0.04)			—
Adjustment for income tax expense on sale of Vitacost.com^(16)^			(0.05)			—			—
Total Adjusted Items			3.31			0.80			1.80

Net earnings attributable to The Kroger Co. per diluted common share excluding the Adjusted Items		$	4.85		$	4.47		$	4.76

Extra Week adjustment^(16)^			—			—			(0.20)

Net earnings attributable to The Kroger Co. per diluted common share excluding the Adjusted Items and the Extra Week adjustment		$	4.85		$	4.47		$	4.56

Average numbers of common shares used in diluted calculation			655			720			725

Net Earnings per Diluted Share excluding the Adjusted Items (continued)

($ in millions, except per share amounts)

(1)	The amounts presented represent the after-tax effect of each adjustment, which was calculated using discrete tax rates.
(2)	The pre-tax adjustments for loss (gain) on investments were $41 in 2025, $148 in 2024 and $(151) in 2023.
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(3)	The pre-tax adjustment for labor dispute charges was $44.
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(4)	The pre-tax adjustment for store closures was $100.
---	---
(5)	The pre-tax adjustment for executive stock compensation for a former executive was $(21).
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(6)	The pre-tax adjustments for merger-related costs were $684 in 2024 and $316 in 2023.
---	---
(7)	The pre-tax adjustment for merger-related litigation and settlement charges was $161 for 2025.
---	---
(8)	The pre-tax adjustment for property losses was $25.
---	---
(9)	The pre-tax adjustment for merger-related net interest expense was $34.
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(10)	The pre-tax adjustments for opioid settlement charges were $(6) in 2025, $(27) in 2024, and $1,475 in 2023.
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(11)	The pre-tax adjustments for impairment of intangible assets were $50 in 2025 and $30 in 2024.
---	---
(12)	The pre-tax adjustment for gain on sale of Kroger Specialty Pharmacy was $(79).
---	---
(13)	The pre-tax adjustments for severance charge and related benefits were $47 in 2025 and $32 in 2024.
---	---
(14)	The pre-tax adjustment for fulfillment network impairment and related charges was $2,497.
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(15)	The pre-tax Extra Week adjustment was $(179).
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(16)	The amount presented represents the net earnings (loss) per diluted common share effect of each adjustment.
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Key Performance Indicators

We evaluate our results of operations and cash flows using a variety of key performance indicators, such as sales, identical sales, excluding fuel and adjusted items, FIFO gross margin, adjusted FIFO operating profit, adjusted net earnings, adjusted net earnings per diluted share and return on invested capital. We use these financial metrics and related computations to evaluate our operational effectiveness and our results of operations from period to period and to plan for near and long-term operating and strategic decisions. These key performance indicators should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. These measures, which are described in more detail in this Annual Report on Form 10-K, may not be comparable to similarly-titled performance indicators used by other companies.

RESULTS OF OPERATIONS

Sales

Total Sales

($ in millions)


				Percentage				Percentage				2023
		2025		Change^(1)^		2024^(6)^		Change^(2)^		2023^(6)^		Adjusted^(3)(6)^
Total sales to retail customers without fuel^(4)^		$	132,712	1.3	%	$	130,973	0.9	%	$	132,284	$	129,868
Supermarket fuel sales			13,584	(9.3)	%		14,973	(8.4)	%		16,621		16,340
Other sales^(5)^			1,346	14.4	%		1,177	5.1	%		1,134		1,120
Total sales		$	147,642	0.4	%	$	147,123	(0.1)	%	$	150,039	$	147,328
(1)	This column represents the percentage change in 2025 compared to 2024.
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(2)	This column represents the percentage change in 2024 compared to 2023 adjusted sales, which removes the Extra Week.
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(3)	The 2023 adjusted column represents the items presented in the 2023 column adjusted to remove the Extra Week.
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(4)	eCommerce sales are included in the “Total sales to retail customers without fuel” line above. eCommerce sales increased 16% in 2025, 11% in 2024 and 12% in 2023, excluding the Extra Week in 2023. Excluding the effect of fulfillment center exits in markets where Kroger does not operate stores, the sale of Vitacost.com, and the discontinuation of Ship Marketplace, eCommerce sales increased 17% in 2025. eCommerce sales include products ordered online and picked up at our stores and our Delivery solutions. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers and orders placed through third-party platforms. eCommerce sales growth was led by strong demand for our Delivery solutions.
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(5)	Other sales primarily relate to external sales at food production plants, other pharmacy services, third-party media revenue and data analytic services. The increase in 2025, compared to 2024, is primarily due to an increase in other pharmacy services and third-party media revenue.
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(6)	2024, 2023 and 2023 Adjusted sales by category have been reclassified to conform to the 2025 presentation.
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Total sales increased in 2025, compared to 2024, by 0.4%. The increase was primarily due to an increase in total sales to retail customers without fuel, partially offset by a decrease in supermarket fuel sales and the sale of Kroger Specialty Pharmacy. Total supermarket fuel sales decreased 9.3% in 2025, compared to 2024, primarily due to a decrease in the average retail fuel price of 6.1% and a decrease in fuel gallons sold of 3.4%. The decrease in the average retail fuel price was caused by a decrease in the product cost of fuel. Total sales, excluding fuel, Kroger Specialty Pharmacy and the Labor Dispute, increased 3.1% in 2025, compared to 2024, which was primarily due to our identical sales increase, excluding fuel and the Labor Dispute, of 2.9%. Identical sales, excluding fuel and the Labor Dispute, for 2025, compared to 2024, increased primarily due to increased pharmacy, eCommerce and Fresh sales and increased spend per item, partially offset by a reduction in the number of units sold.

We calculate identical sales, excluding fuel, as sales to retail customers, including sales from all departments at identical supermarket locations and Delivery solutions. We define a supermarket as identical when it has been in operation without expansion or relocation for five full quarters. We include Kroger Delivery sales from customer fulfillment centers in the identical sales calculation if the delivery occurs in an existing Kroger supermarket geography or when the location has been in operation for five full quarters; closed facilities in which the delivery occurs in an existing Kroger supermarket geography remain in the identical sales calculation, while closed facilities in which the delivery does not occur in an existing Kroger supermarket geography are excluded from the identical sales calculation starting in the quarter the closure is announced. Although identical sales is a relatively standard term, numerous methods exist for calculating identical sales growth. As a result, the method used by our management to calculate identical sales may differ from methods other companies use to calculate identical sales. It is important to understand the methods used by other companies to calculate identical sales before comparing our identical sales to those of other such companies. Our identical sales results, excluding fuel, are summarized in the following tables. We used the identical sales, excluding fuel, dollar figures presented below to calculate percentage changes for 2025 and 2024.

Identical Sales

($ in millions)


		Excluding Adjusted Items^(1)^											****
		2025			2024^(2)^			2025			2024^(2)^
Excluding fuel		$	130,966		$	127,244		$	131,227		$	127,575
Excluding fuel			2.9	%		1.5	%		2.9	%		1.5	%
(1)	Identical sales, excluding fuel, were adjusted to exclude stores involved in the labor disputes in Colorado in the first quarter of 2025. Identical sales, excluding fuel, were excluded for the first four weeks of the first quarters of 2025 and 2024 for stores involved in this labor dispute.
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(2)	Identical sales, excluding fuel, for 2024 were calculated on a 52-week basis by excluding week 1 of fiscal 2023 in our 2023 identical sales base.
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Gross Margin, LIFO and FIFO Gross Margin

Our gross margin rates, as a percentage of sales, were 22.9% in 2025 and 22.3% in 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower gross margin rate, sourcing improvements, lower shrink, lower supply chain costs and decreased fuel sales, which have a lower gross margin rate, partially offset by increased pharmacy sales, which have a lower gross margin rate, and increased price investments.

The following table provides the calculation of gross profit and gross margin in accordance with GAAP:

Gross Margin

($ in millions, except percentages)


	2025			2024
Sales	$	147,642		$	147,123
Merchandise costs, including advertising, warehousing and transportation and LIFO charge, excluding rent and depreciation and amortization		113,240			113,720
Rent		58			66
Depreciation and amortization		590			589
Gross profit	$	33,754		$	32,748

Gross margin		22.9	%		22.3	%

We define FIFO gross margin as FIFO gross profit divided by sales. FIFO gross profit is calculated as sales less merchandise costs, including advertising, warehousing and transportation expenses, but excluding the LIFO charge, rent and depreciation and amortization.

Our LIFO charge was $157 million in 2025, compared to $95 million in 2024. The increase in the LIFO charge was due to higher product cost inflation for 2025, compared to 2024. 33

Our fuel sales lower our FIFO gross margin rate due to the very low FIFO gross margin rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel and the Labor Dispute, our FIFO gross margin rate increased 44 basis points in 2025, compared to 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower gross margin rate, sourcing improvements, lower shrink and lower supply chain costs, partially offset by increased pharmacy sales, which have a lower gross margin rate, and increased price investments. Excluding the effect of fuel, the Labor Dispute and Kroger Specialty Pharmacy, our FIFO gross margin rate increased 14 basis points in 2025, compared to 2024.

Operating, General and Administrative Expenses

OG&A expenses consist primarily of employee-related costs such as wages, healthcare benefit costs, retirement plan costs, utilities, and credit card fees. Rent expense, depreciation and amortization expense, and interest expense are not included in OG&A.

OG&A expenses, as a percentage of sales, were 19.2% in 2025 and 17.3% in 2024. The increase in 2025, compared to 2024, resulted primarily from the effect of decreased fuel sales, which increases our OG&A rate, as a percentage of sales, the sale of our Kroger Specialty Pharmacy business, which has a lower OG&A rate to sales, the 2025 OG&A Adjusted Items, increased healthcare costs and increased multi-employer pension contributions, partially offset by the 2024 OG&A Adjusted Items, decreased incentive plan costs and continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity.

Our fuel sales lower our OG&A rate, as a percentage of sales, due to the very low OG&A rate, as a percentage of sales, of fuel sales compared to non-fuel sales. Excluding the effect of fuel, the 2025 OG&A Adjusted Items, the Labor Dispute and the 2024 OG&A Adjusted Items, our OG&A rate increased 29 basis points in 2025, compared to 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower OG&A rate, as a percentage of sales, increased healthcare costs and increased multi-employer pension contributions, partially offset by decreased incentive plan costs and continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity.

Excluding the effect of fuel, Kroger Specialty Pharmacy, the 2025 OG&A Adjusted Items, the Labor Dispute and the 2024 OG&A Adjusted Items, our OG&A rate increased 7 basis points in 2025, compared to 2024.

Rent Expense

Rent expense remained relatively consistent, as a percentage of sales, for 2025 compared to 2024.

Depreciation and Amortization Expense

Depreciation and amortization expense increased, as a percentage of sales, in 2025, compared to 2024. This increase was primarily due to the sale of our Kroger Specialty Pharmacy business, which has a lower depreciation & amortization rate to sales, partially offset by a reduction in depreciation and amortization expense due to the fulfillment network impairment charge.

Operating Profit and FIFO Operating Profit

Operating profit was $1.9 billion, or 1.28% of sales, for 2025, compared to $3.8 billion, or 2.62% of sales, for 2024. The results for 2025 include $2.5 billion of fulfillment network impairment and related charges. Operating profit, as a percentage of sales, decreased 134 basis points in 2025, compared to 2024, primarily due to increased OG&A expenses, depreciation and amortization expenses and the LIFO charge, as a percentage of sales, partially offset by a higher FIFO gross margin rate.

FIFO operating profit was $2.0 billion, or 1.39% of sales, for 2025, compared to $3.9 billion, or 2.68% of sales, for 2024. The results for 2025 include $2.5 billion of fulfillment network impairment and related charges. FIFO operating profit, as a percentage of sales, excluding the 2025 and 2024 Adjusted Items, increased 14 basis points in 2025, compared to 2024, primarily due to a higher FIFO gross margin rate, partially offset by increased OG&A expenses and depreciation and amortization expenses, as a percentage of sales.

Specific factors contributing to the trends driving operating profit and FIFO operating profit identified above are discussed earlier in this section.

The following table provides a reconciliation of operating profit to FIFO operating profit, and to Adjusted FIFO operating profit, excluding the 2025 and 2024 Adjusted Items:

Operating Profit excluding the Adjusted Items

($ in millions)


		2025			2024
Operating profit		$	1,890		$	3,849
LIFO charge			157			95

FIFO Operating profit			2,047			3,944

Adjustment for labor dispute charges			44			—
Adjustment for store closures			100			—
Adjustment for executive stock compensation for a former executive			(21)			—
Adjustment for merger-related costs^(1)^			—			684
Adjustment for merger-related litigation and settlement charges			161			—
Adjustment for property losses			—			25
Adjustment for opioid settlement charges and vendor reserves			(6)			(27)
Adjustment for impairment of intangible assets			50			30
Adjustment for severance charge and related benefits			47			32
Adjustment for fulfillment network impairment and related charges			2,497			—
Other			(14)			(14)

2025 and 2024 Adjusted items			2,858			730

Adjusted FIFO operating profit excluding the adjusted items above		$	4,905		$	4,674
(1)	Merger-related costs primarily include third-party professional fees and credit facility fees associated with the terminated merger with Albertsons Companies, Inc. (“Albertsons”).
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Net Interest Expense

Net interest expense totaled $639 million in 2025, compared to $450 million in 2024. This increase resulted primarily from increased average total outstanding debt in 2025, compared to 2024, from the net proceeds of the senior notes issuance during the third quarter of 2024, and decreased interest income earned due to decreased balances of cash and temporary cash investments in 2025, compared to 2024, primarily due to the $5.0 billion we funded in 2024 under the accelerated share repurchase (“ASR”) transaction and the payment we made in 2024 to redeem $4.7 billion aggregate principal amount of the senior notes that included a special mandatory redemption feature following the termination of the merger with Albertsons.

Income Taxes

Our effective income tax rate was 14.7% in 2025 and 20.0% in 2024. The 2025 tax rate differed from the federal statutory rate due to a tax benefit from share-based payments, recognizing deferred tax assets related to the sale of Vitacost.com and the utilization of tax credits and deductions, partially offset by the effect of state income taxes. The 2024 tax rate differed from the federal statutory rate due to a tax benefit from recognizing deferred tax assets related to the sale of Kroger Specialty Pharmacy, the benefit from share-based payments and the utilization of tax credits, partially offset by the effect of state income taxes. 35

Net Earnings and Net Earnings Per Diluted Share

Our net earnings are based on the factors discussed in the Results of Operations section.

Net earnings of $1.54 per diluted share for 2025 represented a decrease of 58% compared to net earnings of $3.67 per diluted share for 2024. Excluding the 2025 and 2024 Adjusted Items, adjusted net earnings of $4.85 per diluted share for 2025 represented an increase of 9% compared to adjusted net earnings of $4.47 per diluted share for 2024. The increase in adjusted net earnings per diluted share resulted primarily from increased adjusted FIFO operating profit, excluding fuel, lower income tax expense and lower common shares outstanding, partially offset by increased net interest expense and an increased LIFO charge.

RETURN ON INVESTED CAPITAL

We calculate return on invested capital (“ROIC”) by dividing adjusted ROIC operating profit for the prior four quarters by the average invested capital. Adjusted operating profit for ROIC purposes is calculated by excluding certain items included in operating profit, and adding back our LIFO charge, depreciation and amortization and rent to our U.S. GAAP operating profit of the prior four quarters. Average invested capital is calculated as the sum of (i) the average of our total assets, (ii) the average LIFO reserve and (iii) the average accumulated depreciation and amortization; minus (i) the average taxes receivable, (ii) the average accounts payable, (iii) the average accrued salaries and wages and (iv) the average other current liabilities, excluding accrued income taxes. Averages are calculated for ROIC by adding the beginning balance of the first quarter and the ending balance of the fourth quarter, of the last four quarters, and dividing by two. ROIC is a non-GAAP financial measure of performance. ROIC should not be reviewed in isolation or considered as a substitute for our financial results as reported in accordance with GAAP. ROIC is an important measure used by management to evaluate our investment returns on capital. Management believes ROIC is a useful metric to investors and analysts because it measures how effectively we are deploying our assets.

Although ROIC is a relatively standard financial term, numerous methods exist for calculating a company’s ROIC. As a result, the method used by our management to calculate ROIC may differ from methods other companies use to calculate their ROIC. We urge you to understand the methods used by other companies to calculate their ROIC before comparing our ROIC to that of such other companies.

The following table provides a calculation of ROIC for 2025 and 2024 on a 52 week basis ($ in millions):


		Fiscal Year Ended
		January 31,			February 1,
		2026			2025		****
Return on Invested Capital
Numerator
Operating profit		$	1,890		$	3,849
LIFO charge			157			95
Depreciation and amortization			3,332			3,246
Rent			872			877
Adjustment for labor dispute charges			44			—
Adjustment for store closures			100			—
Adjustment for executive stock compensation for a former executive			(21)			—
Adjustment for merger-related costs			—			684
Adjustment for merger-related litigation and settlement charges			161			—
Adjustment for property losses			—			25
Adjustment for opioid settlement charges and vendor reserves			(6)			(27)
Adjustment for impairment of intangible assets			50			30
Adjustment for severance charge and related benefits			47			32
Adjustment for fulfillment network impairment and related charges			2,497			—
Adjusted ROIC operating profit		$	9,123		$	8,811

Denominator
Average total assets		$	51,285		$	51,561
Average taxes receivable^(1)^			(141)			(124)
Average LIFO reserve			2,479			2,357
Average accumulated depreciation and amortization^(2)^			35,525			33,397
Average accounts payable			(10,306)			(10,253)
Average accrued salaries and wages			(1,299)			(1,327)
Average other current liabilities			(3,751)			(3,551)
Average invested capital		$	73,792		$	72,060
Return on Invested Capital			12.36	%		12.23	%

(1)Taxes receivable were $198 as of January 31, 2026, $84 as of February 1, 2025 and $163 as of February 3, 2024.

(2)Accumulated depreciation and amortization includes depreciation for property, plant and equipment and amortization for definite-lived intangible assets.

CRITICAL ACCOUNTING ESTIMATES

We have chosen accounting policies that we believe are appropriate to report accurately and fairly our operating results and financial position, and we apply those accounting policies in a consistent manner. Our significant accounting policies are summarized in Note 1 to the Consolidated Financial Statements.

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosures of contingent assets and liabilities. We base our estimates on historical experience and other factors we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

We believe the following accounting estimates are the most critical in the preparation of our financial statements because they involve the most difficult, subjective or complex judgments about the effect of matters that are inherently uncertain.

Impairments of Long-Lived Assets

We monitor the carrying value of long-lived assets for potential impairment each quarter based on whether certain triggering events have occurred. These events include current period losses combined with a history of losses or a projection of continuing losses or a significant decrease in the market value of an asset. When a triggering event occurs, an impairment calculation is performed, comparing projected undiscounted future cash flows, utilizing current cash flow information and expected growth rates related to specific asset groups, to the carrying value for those asset groups. If we identify impairment for long-lived assets to be held and used, we compare the assets’ current carrying value to the assets’ fair value. Fair value is based on current market values or discounted future cash flows. We record impairment when the carrying value exceeds fair market value. With respect to owned property and equipment held for disposal, the value of the property and equipment is adjusted to reflect recoverable values based on previous efforts to dispose of similar assets and current economic conditions. Impairment is recognized for the excess of the carrying value over the estimated fair market value, reduced by estimated direct costs of disposal. We recorded asset impairment and related charges totaling $2.7 billion for 2025. This includes store closure costs of $100 million, $77 million net of tax, related to the planned closing of approximately 60 stores, impairment of intangible assets of $50 million, $34 million net of tax, related to classifying a certain subsidiary as held for sale and charges of $2.5 billion, $1.9 billion net of tax, related to our fulfillment network not meeting operational or financial expectations, the planned closing of three automated fulfillment facilities and the cancellation of a planned site (see Note 19 to the Consolidated Financial Statements for additional details). We recorded asset impairments in the normal course of business totaling $98 million in 2024, which includes $25 million, $19 million net of tax, for property losses. Costs to reduce the carrying value of long-lived assets for each of the years presented have been included in the Consolidated Statements of Operations as OG&A expense.

The factors that most significantly affect the impairment calculation are our estimates of future cash flows. Our cash flow projections look several years into the future and include assumptions on variables such as inflation, the economy and competition. Application of alternative assumptions and definitions, such as reviewing long-lived assets for impairment at a different level, could produce significantly different results.

Business Combinations

We account for business combinations using the acquisition method of accounting. All the assets acquired, liabilities assumed and amounts attributable to noncontrolling interests are recorded at their respective fair values at the date of acquisition once we obtain control of an entity. The determination of fair values of identifiable assets and liabilities involves estimates and the use of valuation techniques when market value is not readily available. We use various techniques to determine fair value in such instances, including the income approach. Significant estimates used in determining fair value include, but are not limited to, the amount and timing of future cash flows, growth rates, discount rates and useful lives. The excess of the purchase price over fair values of identifiable assets and liabilities is recorded as goodwill. See Note 2 to the Consolidated Financial Statements for further information about goodwill.

Goodwill

Our goodwill totaled $2.6 billion as of January 31, 2026. We review goodwill for impairment in the fourth quarter of each year and also upon the occurrence of triggering events. We perform reviews of each of our operating divisions and other consolidated entities (collectively, “reporting units”) that have goodwill balances. Generally, fair value is determined using a multiple of earnings, or discounted projected future cash flows, and we compare fair value to the carrying value of a reporting unit for purposes of identifying potential impairment. We base projected future cash flows on management’s knowledge of the current operating environment and expectations for the future. We recognize goodwill impairment for any excess of a reporting unit's carrying value over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

The annual evaluation of goodwill performed in 2025, 2024 and 2023 did not result in impairment for any of our reporting units. Based on current and future expected cash flows, we believe additional goodwill impairments are not reasonably likely. A 10% reduction in fair value of our reporting units would not indicate a potential for impairment of our goodwill balance.

For additional information relating to our results of the goodwill impairment reviews performed during 2025, 2024 and 2023, see Note 2 to the Consolidated Financial Statements.

The impairment review requires the extensive use of management judgment and financial estimates. Application of alternative estimates and assumptions could produce significantly different results. The cash flow projections embedded in our goodwill impairment reviews can be affected by several factors such as inflation, business valuations in the market, the economy, competition and our ability to successfully integrate recently acquired businesses.

Multi-Employer Pension Plans

We contribute to various multi-employer pension plans based on obligations arising from collective bargaining agreements. These multi-employer pension plans provide retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Trustees are appointed in equal number by employers and unions. The trustees typically are responsible for determining the level of benefits to be provided to participants as well as for such matters as the investment of the assets and the administration of the plans.

We recognize expense in connection with these plans as contributions are funded or when commitments are probable and reasonably estimable, in accordance with GAAP. We made cash contributions to these plans of $496 million in 2025, $398 million in 2024 and $635 million in 2023. The increase in 2025, compared to 2024, is due to an increase in required contributions to the UFCW Consolidated Pension Plan, primarily due to the exhaustion of prefunding credits that originated from incremental contributions we made to this plan in prior years. The decrease in 2024, compared to 2023, is due to the fulfillment of contractually obligated payments related to our commitments established when restructuring the UFCW International Union-Industry Variable Annuity Pension Plan agreement.

We continue to evaluate and address our potential exposure to under-funded multi-employer pension plans as it relates to our associates who are beneficiaries of these plans. These under-fundings are not our liability. When an opportunity arises that is economically feasible and beneficial to us and our associates, we may negotiate the restructuring of under-funded multi-employer pension plan obligations to help stabilize associates’ future benefits and become the fiduciary of the assets of the restructured multi-employer pension plan. The commitments from these restructurings do not change our debt profile as it relates to our credit rating since these off-balance sheet commitments are typically considered in our investment grade debt rating. We are currently designated as the named fiduciary of the UFCW Consolidated Pension Plan and the International Brotherhood of Teamsters (“IBT”) Consolidated Pension Fund and have sole investment authority over these assets. As we continue to work to find solutions to under-funded multi-employer pension plans, it is possible we could incur withdrawal liabilities for certain funds.

Based on the most recent information available to us, we believe the present value of actuarially accrued liabilities in most of these multi-employer plans exceeds the value of the assets held in trust to pay benefits, and we expect that our contributions to most of these funds will increase over the next few years. We have attempted to estimate the amount by which these liabilities exceed the assets, (i.e., the amount of underfunding), as of December 31, 2025. Because we are only one of a number of employers contributing to these plans, we also have attempted to estimate the ratio of our contributions to the total of all contributions to these plans in a year as a way of assessing our “share” of the underfunding. Nonetheless, the underfunding is not a direct obligation or liability of ours or of any employer.

As of December 31, 2025, we estimate our share of the underfunding of multi-employer pension plans to which we contribute was approximately $1.2 billion, $942 million net of tax. As of December 31, 2024, we estimate our share of the underfunding of multi-employer pension plans to which we contribute was approximately $1.9 billion, $1.4 billion net of tax. This represents a decrease in the estimated amount of underfunding of approximately $630 million, $482 million net of tax, as of December 31, 2025. The decrease in the amount of underfunding is primarily attributable to higher expected returns on assets in the funds as well as the receipt of American Rescue Plan Act (“ARP Act”) funding. Our estimate is based on the most current information available to us including actuarial evaluations and other data (that include the estimates of others), and such information may be outdated or otherwise unreliable.

We have made and disclosed this estimate not because this underfunding is a direct liability of ours. Rather, we believe the underfunding is likely to have important consequences. In the event we were to exit certain markets or otherwise cease making contributions to these plans, we could trigger a substantial withdrawal liability. Any adjustment for withdrawal liability will be recorded when it is probable that a liability exists and can be reasonably estimated, in accordance with GAAP.

The amount of underfunding described above is an estimate and could change based on contract negotiations, returns on the assets held in the multi-employer pension plans, benefit payments or future restructuring agreements. The amount could decline, and our future expense would be favorably affected, if the values of the assets held in the trust significantly increase or if further changes occur through collective bargaining, trustee action or favorable legislation. On the other hand, our share of the underfunding could increase, and our future expense could be adversely affected if the asset values decline, if employers currently contributing to these funds cease participation or if changes occur through collective bargaining, trustee action or adverse legislation. We continue to evaluate our potential exposure to under-funded multi-employer pension plans. Although these liabilities are not a direct obligation or liability of ours, any commitments to fund certain multi-employer pension plans will be expensed when our commitment is probable and an estimate can be made.

Under the ARP Act, eligible multi-employer plans can apply to receive a cash payment in the amount needed to pay pension benefits through the plan year ending 2051. At the end of 2025, we expect a certain multi-employer pension plan in which we participate, for which our estimated share of underfunding is approximately $38 million, $29 million net of tax, to receive funding in 2026, which may reduce a portion of our share of unfunded multi-employer pension plan liabilities.

See Note 15 to the Consolidated Financial Statements for more information relating to our participation in these multi-employer pension plans.

NEW ACCOUNTING STANDARDS

Refer to Note 20 and Note 21 to the Consolidated Financial Statements for recently adopted accounting standards and recently issued accounting standards not yet adopted as of January 31, 2026.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow Information

The following table summarizes our net (decrease) increase in cash and temporary cash investments for 2025 and 2024:



		Fiscal Year
		2025		2024
Net cash provided by (used by)
Operating activities		$	7,311	$	5,794
Investing activities			(3,914)		(3,228)
Financing activities			(4,022)		(490)
Net (decrease) increase in cash and temporary cash investments		$	(625)	$	2,076

Net cash provided by operating activities

We generated $7.3 billion of cash from operations in 2025, compared to $5.8 billion in 2024. The change in net earnings including noncontrolling interests is discussed in the Results of Operations section. Other significant items affecting net cash provided by operating activities include the following:

●	The fulfillment network impairment and related charges as a result of certain facility closures and the automated fulfillment network not meeting operational or financial expectations;

●	A decrease in deferred income taxes due to the fulfillment network impairment and related charges; and

●	Cash flows for accounts receivable were more favorable in 2025, compared to 2024, primarily due to a decrease in pharmacy receivables at the end of 2025, compared to 2024, driven by timing of cash receipts.

Cash paid for net interest increased in 2025, compared to 2024, primarily due to increased interest payments related to the $5.8 billion aggregate principal amount of senior notes issued in the third quarter of 2024 and not redeemed in the fourth quarter of 2024.

Net cash used by investing activities

Investing activities used cash of $3.9 billion in 2025, compared to $3.2 billion in 2024. The amount of cash used by investing activities increased in 2025, compared to 2024, primarily due to a decrease in net proceeds from the sale of businesses due to the sale of our Kroger Specialty Pharmacy business in 2024, a decrease in proceeds from the sale of assets due to the sale of an equity investment in 2024 and the letter of credit drawdown by Ocado International Holdings Limited and Ocado Group plc (“Ocado”) in the second quarter of 2025 under the Amended and Restated Partnership Framework Agreement, partially offset by decreased payments for property and equipment, including payments for lease buyouts.

Net cash used by financing activities

Cash used by financing activities was $4.0 billion in 2025, compared to $490 million in 2024. The amount of cash used by financing activities increased in 2025, compared to 2024, primarily due to decreased proceeds from the issuance of long-term debt, partially offset by decreased payments on long-term debt including obligations under finance leases, decreased treasury stock purchases and decreased unsettled accelerated share repurchases.

Capital Investments

Capital investments, including changes in construction-in-progress payables and excluding the purchase of leased facilities, totaled $3.9 billion in 2025 and $3.6 billion in 2024. Capital investments for the purchase of leased facilities totaled $33 million in 2025 and $51 million in 2024. Our capital priorities align directly with our value creation model and our target to consistently grow net earnings. We increased our capital investments in 2025, compared to 2024, reflecting increased capital spending on major storing projects for 2025 as well as projects that will be completed in future years. Our capital program includes store construction projects, initiatives to enhance the customer experience in stores, improve our process efficiency and enhance our digital capabilities through technology developments. These investments are expected to drive sales growth, expand our customer base in key markets, and improve operating efficiency by removing cost and waste from our business.

The table below shows our supermarket storing activity and our total supermarket square footage for 2025, 2024 and 2023:

Supermarket Storing Activity


		2025		2024		2023	****
Beginning of year		2,731		2,722		2,719
Opened		16		16		5
Opened (relocation)		4		7		2
Closed (operational)		(50)		(7)		(1)
Closed (relocation)		(4)		(7)		(3)
End of year		2,697		2,731		2,722

Total expansions^(1)^		9		6		3

Total remodels^(2)^		278		281		278

Total supermarket square footage (in millions)		180		182		180

(1)We define an expansion as a project that expands the square footage of a store by at least 5,000 square feet or 15,000 square feet for stores greater than 95,000 square feet prior to the expansion.

(2)We define a remodel as a project that is greater than or equal to a cost of $8 per square foot.

Debt Management

Total debt, including both the current and long-term portions of obligations under finance leases, decreased $339 million to $17.6 billion as of year-end 2025, compared to year-end 2024. This decrease was primarily due to a reduction in obligations under finance leases as a result of the cash termination payment to Ocado.

Common Share Repurchase Programs

On December 23, 2025, we announced that our Board of Directors approved a $2.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, including ASR transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “December 2025 Repurchase Program”).

On December 11, 2024, we announced that our Board of Directors approved a $7.5 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, including ASR transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “December 2024 Repurchase Program”).

On December 6, 1999, our Board of Directors approved a share repurchase program to repurchase common shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith (the “1999 Repurchase Program”). The 1999 Repurchase Program is solely funded by proceeds from stock option exercises, and the tax benefit from these exercises.

On December 19, 2024, we entered into an ASR agreement with two financial institutions to reacquire, in aggregate, $5.0 billion in shares of Kroger common stock. During 2024, we funded $5.0 billion and received a $4.0 billion initial delivery of approximately 65.6 million Kroger common shares at an average price of $61.54 per share, which includes excise tax on the shares repurchased. Final delivery under the ASR agreement occurred during the third quarter of 2025. In total, we invested $5.0 billion to repurchase 75.6 million shares of Kroger common stock at an average price of $66.68 per share, which includes excise tax on the shares repurchased. The ASR agreement was completed under the December 2024 Repurchase Program.

During 2025, we invested $2.7 billion to repurchase 41.8 million shares of Kroger common stock at an average price of $65.21 per share, which includes excise tax on the shares repurchased. These shares were reacquired under the December 2024 Repurchase Program and the 1999 Repurchase Program. In addition, the final delivery under the ASR agreement occurred during the third quarter of 2025, which included the settlement of 10.0 million shares of Kroger common stock. During 2024, we invested $4.2 billion to repurchase 68.4 million shares of Kroger common stock at an average price of $61.31 per share, which includes excise tax on the shares repurchased. These shares were reacquired under the December 2024 Repurchase Program and the 1999 Repurchase Program. During 2023, we invested $62 million to repurchase 1.3 million shares of Kroger common stock at an average price of $46.98 per share. These shares were reacquired under the 1999 Repurchase Program.

Amounts available under the 1999 Repurchase Program are dependent upon option exercise activity. The December 2025 Repurchase Program, the December 2024 Repurchase Program, and the 1999 Repurchase Program do not have any expiration dates, but may be suspended or terminated by our Board of Directors at any time.

Dividends

The following table provides dividend information for 2025 and 2024 ($ in millions, except per share amounts):


	2025		2024
Cash dividends paid	$	885	$	883
Cash dividends paid per common share	$	1.34	$	1.22

Liquidity Needs

We held cash and temporary cash investments of $3.3 billion, as of the end of 2025. We actively manage our cash and temporary cash investments in order to internally fund operating activities, support and invest in our core businesses, make scheduled interest and principal payments on our borrowings and return cash to shareholders through cash dividend payments and share repurchases. Our current levels of cash, borrowing capacity and balance sheet leverage provide us with the operational flexibility to adjust to changes in economic and market conditions. We remain committed to our dividend, and growing our dividend over time, subject to Board approval, as well as our share repurchase programs and we will evaluate the optimal use of any excess free cash flow, consistent with our capital allocation strategy. 43

The table below summarizes our short-term and long-term material cash requirements, based on year of maturity or settlement, as of January 31, 2026 (in millions of dollars):


		2026			2027			2028			2029			2030			Thereafter			Total		****
Contractual Obligations^(1)(2)^
Long-term debt^(3)^		$	1,366		$	606		$	665		$	557		$	1,035		$	11,646		$	15,875
Interest on long-term debt^(4)^			735			705			693			661			636			10,160			13,590
Finance lease obligations			482			165			165			157			149			1,080			2,198
Operating lease obligations			962			914			852			792			742			5,859			10,121
Self-insurance liability^(5)^			387			161			127			87			52			99			913
Construction commitments^(6)^			1,071			—			—			—			—			—			1,071
Opioid settlement payments^(7)^			140			140			136			126			117			499			1,158
Purchase obligations^(8)^			992			368			152			102			27			137			1,778
Total		$	6,135		$	3,059		$	2,790		$	2,482		$	2,758		$	29,480		$	46,704
(1)	The contractual obligations table excludes funding of pension and other postretirement benefit obligations, which totaled approximately $35 million in 2025. For additional information about these obligations, see Note 14 to the Consolidated Financial Statements. This table also excludes contributions under various multi-employer pension plans, which totaled $496 million in 2025. For additional information about these multi-employer pension plans, see Note 15 to the Consolidated Financial Statements.
---	---
(2)	The liability related to unrecognized tax benefits has been excluded from the contractual obligations table because a reasonable estimate of the timing of future tax settlements cannot be determined.
---	---
(3)	As of January 31, 2026, we had no outstanding commercial paper and no borrowings under our credit facility.
---	---
(4)	Amounts include contractual interest payments using the interest rate as of January 31, 2026 and stated fixed and swapped interest rates, if applicable, for all other debt instruments.
---	---
(5)	The amounts include self-insurance liabilities related to workers’ compensation claims and general liability claims. Workers’ compensation claims have been stated on a present value basis.
---	---
(6)	Amounts include funds owed to third parties for projects currently under construction. These amounts are reflected in “Accounts payable” in our Consolidated Balance Sheets.
---	---
(7)	Amounts include scheduled opioid settlement commitments. For additional information about our opioid settlement charges, see Note 12 to the Consolidated Financial Statements.
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(8)	Amounts include commitments, many of which are short-term in nature, to be utilized in the normal course of business, such as several contracts to purchase raw materials utilized in our food production plants and several contracts to purchase energy to be used in our stores and food production plants. Our obligations also include management fees for facilities operated by third parties and outside service contracts. Any upfront vendor allowances or incentives associated with outstanding purchase commitments are recorded as either current or long-term liabilities in our Consolidated Balance Sheets. We included our future commitments for customer fulfillment centers for which we have placed an order as of January 31, 2026. We did not include our commitments associated with additional customer fulfillment centers that have not yet been ordered.
---	---

We expect to meet our short-term and long-term liquidity needs with cash and temporary cash investments on hand as of January 31, 2026, cash flows from our operating activities and other sources of liquidity, including borrowings under our commercial paper program and revolving credit facility. Our short-term and long-term liquidity needs include anticipated requirements for working capital to maintain our operations, pension plan commitments, interest payments and scheduled principal payments of debt and commercial paper, servicing our lease obligations, self-insurance liabilities, capital investments, scheduled opioid settlement payments and other purchase obligations. We may also require additional capital in the future to fund organic growth opportunities, increase capacity of our Delivery solutions, joint ventures or other business partnerships, property development, acquisitions, dividends and share repurchases. In addition, we generally operate with a working capital deficit due to our efficient use of cash in funding operations and because we have consistent access to the capital markets. We believe we have adequate coverage of our debt covenants to continue to maintain our current investment grade debt ratings and to respond effectively to competitive conditions.

For additional information about our debt activity in 2025, see Note 5 to the Consolidated Financial Statements.

Factors Affecting Liquidity

We can currently borrow on a daily basis approximately $2.75 billion under our commercial paper program. At January 31, 2026, we had no outstanding commercial paper. Commercial paper borrowings are backed by our credit facility and reduce the amount we can borrow under the credit facility. If our short-term credit ratings fall, the ability to borrow under our current commercial paper program could be adversely affected for a period of time and increase our interest cost on daily borrowings under our commercial paper program. This could require us to borrow additional funds under the credit facility, under which we believe we have sufficient capacity. However, in the event of a ratings decline, we do not anticipate that our borrowing capacity under our commercial paper program would be any lower than $500 million on a daily basis. Factors that could affect our credit rating include changes in our operating performance and financial position, the state of the economy, conditions in the food retail industry and changes in our business model. Further information on the risks and uncertainties that can affect our business can be found in the “Risk Factors” section set forth in Item 1A of Part I of this Annual Report on Form 10-K. Although our ability to borrow under the credit facility is not affected by our credit rating, the interest cost and applicable margin on borrowings under the credit facility could be affected by a downgrade in our Public Debt Rating. “Public Debt Rating” means, as of any date, the rating that has been most recently announced by either S&P or Moody’s, as the case may be, for any class of non-credit enhanced long-term senior unsecured debt issued by Kroger. As of March 26, 2026, we had no commercial paper borrowings outstanding.

Our credit facility requires the maintenance of a Leverage Ratio (our “financial covenant”). A failure to maintain our financial covenant would impair our ability to borrow under the credit facility. This financial covenant is described below:

●	Our Leverage Ratio (the ratio of Net Debt to Adjusted EBITDA, as defined in the credit facility) was 1.54 to 1 as of January 31, 2026. If this ratio were to exceed 3.50 to 1, we would be in default of our revolving credit facility and our ability to borrow under the facility would be impaired.

Our credit facility is more fully described in Note 5 to the Consolidated Financial Statements. We were in compliance with our financial covenant at January 31, 2026.

As of January 31, 2026, we maintained a $2.75 billion, unsecured revolving credit facility that, unless extended, terminates on September 13, 2029. Outstanding borrowings under the credit facility, commercial paper borrowings, and some outstanding letters of credit reduce funds available under the credit facility. As of January 31, 2026, we had no outstanding commercial paper and no borrowings under our revolving credit facility. The outstanding letters of credit that reduce funds available under our credit facility totaled $3 million as of January 31, 2026.

We maintain surety bonds related primarily to our self-insured workers’ compensation claims. These bonds are required by most states in which we are self-insured for workers’ compensation and are placed with predominately third-party insurance providers to insure payment of our obligations in the event we are unable to meet our claim payment obligations up to our self-insured retention levels. These bonds do not represent liabilities of ours, as we already have reserves on our books for the claims costs. Market changes may make the surety bonds more costly and, in some instances, availability of these bonds may become more limited, which could affect our costs of, or access to, such bonds. Although we do not believe increased costs or decreased availability would significantly affect our ability to access these surety bonds, if this does become an issue, we would issue letters of credit, in states where allowed, to meet the state bonding requirements. This could increase our cost or decrease the funds available under our credit facility if the letters of credit were issued against our credit facility. We had $617 million of outstanding surety bonds as of January 31, 2026. These surety bonds expire during fiscal year 2026 and are expected to be renewed.

We have standby letters of credit outstanding as part of our insurance program and for other business purposes. We had $29 million of outstanding standby letters of credit as of January 31, 2026. These standby letters of credit expire during fiscal year 2026 or early fiscal year 2027 and most are expected to be renewed. The letters of credit for our insurance program collateralize obligations to our insurance carriers in connection with the settlement of potential claims. Letters of credit do not represent liabilities of ours and are not reflected in our Consolidated Balance Sheets.

We also are contingently liable for leases that have been assigned to various third parties in connection with facility closings and dispositions. We could be required to satisfy obligations under the leases if any of the assignees are unable to fulfill their lease obligations. Due to the wide distribution of our assignments among third parties, and various other remedies available to us, we believe the likelihood that we will be required to assume a material amount of these obligations is remote. We have agreed to indemnify certain third-party logistics operators for certain expenses, including multi-employer pension plan obligations and withdrawal liabilities.

In addition to the above, we enter into various indemnification agreements and take on indemnification obligations in the ordinary course of business. Such arrangements include indemnities against third-party claims arising out of agreements to provide services to us; indemnities related to the sale of our securities; indemnities of directors, officers and employees in connection with the performance of their work; and indemnities of individuals serving as fiduciaries on benefit plans. While our aggregate indemnification obligation could result in a material liability, we are not aware of any current matter that could result in a material liability.

ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

FINANCIAL RISK MANAGEMENT

In addition to the risks inherent in our operations, we are exposed to market risk from a variety of sources, including changes in interest rates, commodity prices, the fair value of certain equity investments and defined benefit pension and other post-retirement benefit plans. Our market risk exposures are discussed below.

Interest Rate Risk

We manage our exposure to interest rates and changes in the fair value of our debt instruments primarily through the strategic use of our commercial paper program, variable and fixed rate debt, and interest rate swaps. Our current program relative to interest rate protection contemplates hedging the exposure to changes in the fair value of fixed-rate debt attributable to changes in interest rates. To do this, we use the following guidelines: (i) use average daily outstanding borrowings to determine annual debt amounts subject to interest rate exposure, (ii) limit the average annual amount subject to interest rate reset and the amount of floating rate debt to a combined total amount that represents 25% of the carrying value of our debt portfolio or less, (iii) include no leveraged products, and (iv) hedge without regard to profit motive or sensitivity to current mark-to-market status.

Annually, we review with the Finance Committee of our Board of Directors compliance with the guidelines described above. The guidelines may change as our business needs dictate.

When we use derivative financial instruments, it is primarily to manage our exposure to fluctuations in interest rates. We do not enter into derivative financial instruments for trading purposes. As a matter of policy, all of our derivative positions are intended to reduce risk by hedging an underlying economic exposure. Because of the high correlation between the hedging instrument and the underlying exposure, fluctuations in the value of the instruments generally are offset by reciprocal changes in the value of the underlying exposure. The interest rate derivatives we use are straightforward instruments with liquid markets.

As of January 31, 2026 and February 1, 2025, we had no forward-starting interest rate swap agreements outstanding.

As of February 3, 2024, we maintained five forward-starting interest rate swap agreements with a maturity date of August 1, 2027 with an aggregate notional amount totaling $5.4 billion. A forward-starting interest rate swap is an agreement that effectively hedges the variability in future benchmark interest payments attributable to changes in interest rates on the forecasted issuance of fixed-rate debt. We entered into these forward-starting interest rate swaps in order to hedge the variability in future benchmark interest payments attributable to changing interest rate on the forecasted issuance of fixed-rate debt that was issued in 2024. The fixed interest rates for these forward-starting interest rate swaps range from 3.00% to 3.78%. The variable rate component on the forward-starting interest rate swaps is the Secured Overnight Financing Rate (“SOFR”). A notional amount of $2.4 billion of these forward-starting interest rate swaps was designated as a cash-flow hedge as defined by GAAP. Accordingly, the changes in fair value of these forward-starting interest rate swaps are recorded to other comprehensive income and reclassified into net earnings when the hedged transaction affects net earnings. The remainder of the notional amount of $3.0 billion of the forward-starting interest rate swaps was not designated as a cash-flow hedge. Accordingly, the changes in the fair value of these forward-starting interest rate swaps not designated as cash-flow hedges are recognized through net earnings.

In 2024, we terminated these five forward-starting interest rate swaps with a maturity date of August 1, 2027 and an aggregate notional amount totaling $5.4 billion. For the notional amount of $2.4 billion of these forward-starting interest rate swaps that was designated as a cash-flow hedge, the unamortized gain of $48 million, $36 million net of tax, has been deferred in accumulated other comprehensive income and will be amortized to earnings as the interest payments are made. For the remainder of the notional amount of $3.0 billion of the forward-starting interest rate swaps not designated as a cash-flow hedge, we recognized a realized loss of $55 million that is included in “(Loss) gain on investments” in our Consolidated Statements of Operations.

In 2024, we entered into two 10-year treasury lock agreements with an aggregate notional amount of $2.1 billion and a weighted-average interest rate of 3.91% and two 30-year treasury lock agreements with an aggregate notional amount of $3.3 billion and a weighted-average interest rate of 4.11%. These treasury locks were an agreement used to hedge the U.S. Treasury benchmark interest rate associated with future interest payments on the forecasted issuance of fixed-rate debt that was issued in 2024. These treasury locks were designated as cash-flow hedges as defined by GAAP. Accordingly, the changes in fair value of these treasury locks are recorded to accumulated other comprehensive income and reclassified into net earnings when the hedged transaction affects net earnings. In 2024, we terminated these treasury lock agreements. The unamortized loss of $56 million, $43 million net of tax, has been deferred in accumulated other comprehensive loss and will be amortized to earnings as the interest payments are made.

The tables below provide information about our underlying debt portfolio as of January 31, 2026 and February 1, 2025. The amounts shown for each year represent the contractual maturities of long-term debt, excluding finance leases, as of January 31, 2026, and February 1, 2025. Interest rates reflect the weighted average rate for the outstanding instruments. The variable rate debt is based on a reference rate using the forward yield curve as of January 31, 2026 and February 1, 2025. The Fair Value column includes the fair value of our debt instruments as of January 31, 2026 and February 1, 2025. We had no outstanding interest rate derivatives classified as fair value hedges as of January 31, 2026 and February 1, 2025. See Notes 5, 6 and 7 to the Consolidated Financial Statements.


		January 31, 2026																							****
		Expected Year of Maturity																							****
		2026			2027			2028			2029			2030			Thereafter			Total			Fair Value		****
		(in millions)																							****
Debt
Fixed rate principal payments^(1)^		$	(1,332)		$	(616)		$	(655)		$	(554)		$	(1,028)		$	(11,734)		$	(15,919)		$	(14,884)
Average interest rate^(1)^			3.01	%		3.68	%		4.46	%		7.69	%		2.02	%		5.04	%
Variable rate principal payments		$	(43)		$	—		$	(20)		$	(11)		$	(14)		$	—		$	(88)		$	(91)
Average interest rate			5.19	%		—			6.19	%		5.94	%		5.76	%		—
(1)	The fixed rate principal payments exclude debt discounts and deferred financing costs of $132 million, of which $9 million is current and $123 million is long-term. The weighted average interest rate calculation excludes the effects of debt discounts and deferred financing costs.
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		February 1, 2025																							****
		Expected Year of Maturity																							****
		2025			2026			2027			2028			2029			Thereafter			Total			Fair Value		****
		(in millions)																							****
Debt
Fixed rate principal payments^(1)^		$	(25)		$	(1,311)		$	(616)		$	(663)		$	(552)		$	(12,735)		$	(15,902)		$	(14,497)
Average interest rate^(1)^			2.10	%		3.00	%		3.68	%		4.43	%		7.69	%		4.79	%
Variable rate principal payments		$	(90)		$	—		$	—		$	(22)		$	(38)		$	—		$	(150)		$	(151)
Average interest rate			2.87	%		—			—			7.93	%		6.17	%		—
(1)	The fixed rate principal payments exclude debt discounts and deferred financing costs of $143 million, of which $11 million is current and $132 million is long-term. The weighted average interest rate calculation excludes the effects of debt discounts and deferred financing costs.
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Based on our year-end 2025 variable rate debt levels, a 10 percent change in interest rates would be immaterial. See Note 6 to the Consolidated Financial Statements for further discussion of derivatives and hedging policies.

Commodity Price Risk

We are subject to commodity price risk generated by our purchases of meat, seafood and dairy products, among other food items. We purchase, manufacture and sell various commodity related food products and risk arises from the price volatility of these commodities. The price and availability of these commodities directly affect our results of operations. To help manage or minimize the effect of commodity price risk exposure on our operations, we use a combination of pricing features embedded within supply contracts, such as fixed-price and price-to-be-fixed contracts, and have the ability to increase or decrease retail prices to our customers as commodity prices change.

We are exposed to changes in the prices of diesel and unleaded fuel. The majority of our fuel contracts utilize index-based pricing formulas plus or minus a fixed locational/supplier differential. We expect to take delivery of these commitments in the normal course of business, and, as a result, these contracts qualify as normal purchases. While many of the indices are aligned, each index may fluctuate at a different pace, driving variability in the prices paid for fuel. Because of this, our operating results may be affected should the market price of fuel suddenly change by a significant amount, which can affect our operating results either positively or negatively in the short-term.

We manage our exposure to diesel fuel price changes through the strategic use of diesel fuel hedge contracts. When we use fuel hedge contracts, it is primarily to manage our exposure to fluctuations in diesel fuel prices for our logistics operations. We do not enter into fuel hedge arrangements for trading purposes. As a matter of policy, all of our hedge positions are intended to reduce risk by hedging an underlying economic exposure. Because of the high correlation between the hedging instrument and the underlying exposure, fluctuations in the value of the instruments generally are offset by reciprocal changes in the value of the underlying exposure. The diesel fuel hedge contracts we use are straightforward instruments with liquid markets. As of January 31, 2026, our outstanding diesel fuel hedge contracts had a total notional amount of $26 million. As of February 1, 2025, our outstanding diesel fuel hedge contracts had a total notional amount of $32 million. The fair value and effect to the Consolidated Statement of Operations of these contracts is insignificant.

We have entered into fixed price contracts to purchase electricity and natural gas for a portion of our energy needs. We expect to take delivery of these commitments in the normal course of business, and, as a result, these contracts qualify as normal purchases.

As of January 31, 2026 and February 1, 2025, we had no commodity derivative contracts outstanding other than the diesel fuel hedge contracts described above.

Equity Investment Risk

We are exposed to market price volatility for our equity investments in certain financial instruments, measured using Level 1 inputs, which are measured at fair value through net earnings. Fair value adjustments flow through “(Loss) gain on investments” in our Consolidated Statements of Operations. The change in fair value of certain Level 1 investments resulted in an unrealized loss of $41 million in 2025, $116 million in 2024 and $66 million in 2023. As of January 31, 2026, the fair value of our investments in certain Level 1 financial instruments was $142 million. As of January 31, 2026, a 10% change in the fair value of these investments would be approximately $14 million. For additional details on these investments, see Note 7 to the Consolidated Financial Statements.

Company-Sponsored Benefit Plans

We sponsor defined benefit pension plans and post-retirement healthcare plans for certain eligible employees. Changes in interest rates affect our liabilities associated with these retirement plans, as well as the amount of expense recognized for these retirement plans. Increased interest rates could result in a lower fair value of plan assets and increased pension expense in the following years. The target plan asset allocations are established based on our liability-driven investment (“LDI”) strategy. An LDI strategy focuses on maintaining a close to fully-funded status over the long-term with minimal funded status risk. This is achieved by investing more of the plan assets in fixed income instruments to more closely match the duration of the plan liability. As of January 31, 2026 and February 1, 2025, our defined benefit pension plans had total investment assets of $2.3 billion. Declines in the fair value of plan assets could diminish the funded status of our defined benefit pension plans and potentially increase our requirement to make contributions to these plans. For additional details, see Note 14 to the Consolidated Financial Statements.

ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Consolidated Financial Statements of The Kroger Co.

For the Fiscal Year Ended January 31, 2026

Table of Contents

	Page
Report of Independent Registered Public Accounting Firm	51
Consolidated Balance Sheets	54
Consolidated Statements of Operations	55
Consolidated Statements of Comprehensive Income	56
Consolidated Statements of Cash Flows	57
Consolidated Statements of Changes in Shareholders’ Equity	58
Notes to Consolidated Financial Statements	59

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of The Kroger Co.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of The Kroger Co. and its subsidiaries (the "Company") as of January 31, 2026 and February 1, 2025, and the related consolidated statements of operations, of comprehensive income, of changes in shareholders' equity and of cash flows for each of the three years in the period ended January 31, 2026, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 31, 2026 and February 1, 2025, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2026 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Litigation Contingencies Related to Opioid Claims and Merger Termination

As described in Notes 12 and 18 to the consolidated financial statements, various claims and lawsuits arising in the normal course of business, including personal injury, contract disputes, employment discrimination, wage and hour and other regulatory claims are pending against the Company. Management continually evaluates the Company’s exposure to loss contingencies arising from pending or threatened litigation and believes the Company has made provisions where it is reasonably possible to estimate and when an adverse outcome is probable. The Company is one of dozens of companies that have been named in various lawsuits alleging that defendants contributed to create a public nuisance through the distribution and dispensing of opioids. On September 8, 2023, the Company announced that it reached an agreement in principle with plaintiffs to settle the majority of opioid claims that have been or could be brought against the Company by states in which it operates, subdivisions, and Native American tribes. On October 31, 2024, the Company determined that there is sufficient participation in the settlement by states and subdivisions and elected to proceed with the settlement. The settlement with states and subdivisions became effective on December 30, 2024, and the settlement with Native American tribes became effective on September 26, 2025. As of January 31, 2026, the Company has recorded $132 million and $981 million of the estimated settlement liability in other current liabilities and other long-term liabilities, respectively. Additionally, on December 10, 2024, Albertsons sued the Company for alleged breaches of the merger agreement and the implied covenant of good faith and fair dealing. Albertsons seeks payment of a $600 million termination fee that Albertsons alleges it is owed under the merger agreement, as well as additional damages. On March 17, 2025, the Company filed an answer denying the allegations in Albertsons’s complaint, and also filed counterclaims that seek recovery for breaches of the merger agreement by Albertsons.

The principal considerations for our determination that performing procedures relating to the litigation contingencies related to opioid claims and merger termination is a critical audit matter are (i) the significant judgment by management when assessing whether an adverse outcome from the pending or threatened litigation is probable and when determining whether a reasonable estimate of the loss can be made and (ii) a high degree of auditor judgment in performing procedures and evaluating audit evidence related to management’s assessment of loss contingencies related to the opioid claims and merger termination.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s assessment of litigation contingencies, including the determination of whether an adverse outcome from the pending or threatened litigation is probable and whether a reasonable estimate of the loss can be made, as well as controls over the financial statement disclosures. These procedures also included, among others (i) obtaining and evaluating certain executed settlement agreements related to opioid claims; (ii) obtaining and evaluating the merger agreement and certain letters where the Company is a named party related to the merger termination; (iii) evaluating the status of significant known actual and potential litigation and settlement activity by inquiring of the Company’s internal and external legal counsel, when deemed necessary; (iv) evaluating the reasonableness of management’s assessment regarding whether an adverse outcome from the pending or threatened litigation is probable and whether a reasonable estimate of the loss can be made; (v) obtaining and evaluating the letters of audit inquiry with internal and external legal counsel related to the opioid claims and merger termination; and (vi) evaluating the sufficiency of the Company’s litigation contingency disclosures related to the opioid claims and merger termination.

/s/PricewaterhouseCoopers LLP

Cincinnati, Ohio

March 31, 2026

We have served as the Company’s auditor since 1929.

THE KROGER CO.

CONSOLIDATED BALANCE SHEETS


		January 31,			February 1,		****
(In millions, except par amounts)		2026			2025		****
ASSETS
Current assets
Cash and temporary cash investments		$	3,334		$	3,959
Store deposits in-transit			1,244			1,312
Receivables			2,192			2,195
FIFO inventory			9,445			9,442
LIFO reserve			(2,553)			(2,404)
Prepaid and other current assets			843			769
Total current assets			14,505			15,273

Property, plant and equipment, net			24,260			25,703
Operating lease assets			6,682			6,839
Intangibles, net			808			834
Goodwill			2,595			2,674
Other assets			1,103			1,293

Total Assets		$	49,953		$	52,616

LIABILITIES
Current liabilities
Current portion of long-term debt including obligations under finance leases		$	1,802		$	272
Current portion of operating lease liabilities			665			599
Accounts payable			10,488			10,124
Accrued salaries and wages			1,267			1,330
Other current liabilities			3,886			3,615
Total current liabilities			18,108			15,940

Long-term debt including obligations under finance leases			15,764			17,633
Noncurrent operating lease liabilities			6,461			6,578
Deferred income taxes			1,094			1,417
Pension and postretirement benefit obligations			421			387
Other long-term liabilities			2,169			2,380

Total Liabilities			44,017			44,335

Commitments and contingencies (see Note 12)

SHAREOWNERS’ EQUITY

Preferred shares, $100 par per share, 5 shares authorized and unissued			—			—
Common shares, $1 par per share, 2,000 shares authorized; 1,918 shares issued in 2025 and 2024			1,918			1,918
Additional paid-in capital			3,907			3,087
Accumulated other comprehensive loss			(635)			(621)
Accumulated earnings			28,850			28,724
Common shares in treasury, at cost, 1,303 shares in 2025 and 1,258 shares in 2024			(28,113)			(24,823)

Total Shareowners’ Equity - The Kroger Co.			5,927			8,285
Noncontrolling interests			9			(4)

Total Equity			5,936			8,281

Total Liabilities and Equity		$	49,953		$	52,616

The accompanying notes are an integral part of the consolidated financial statements.

THE KROGER CO.

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended January 31, 2026, February 1, 2025 and February 3, 2024


											****
			2025			2024			2023
(In millions, except per share amounts)		****	(52 weeks)			(52 weeks)			(53 weeks)		****
Sales			$	147,642		$	147,123		$	150,039

Operating expenses
Merchandise costs, including advertising, warehousing, and transportation, excluding items shown separately below				113,240			113,720			116,675
Operating, general and administrative				28,308			25,431			26,252
Rent				872			877			891
Depreciation and amortization				3,332			3,246			3,125

Operating profit				1,890			3,849			3,096

Other income (expense)
Net interest expense (see Note 5)				(639)			(450)			(441)
Non-service component of company-sponsored pension plan (expense) benefits				(10)			12			30
(Loss) gain on investments				(41)			(148)			151
Gain on the sale of business				—			79			—

Net earnings before income tax expense				1,200			3,342			2,836

Income tax expense				176			670			667

Net earnings including noncontrolling interests				1,024			2,672			2,169
Net income attributable to noncontrolling interests				8			7			5

Net earnings attributable to The Kroger Co.			$	1,016		$	2,665		$	2,164

Net earnings attributable to The Kroger Co. per basic common share			$	1.55		$	3.70		$	2.99

Average number of common shares used in basic calculation				652			715			718

Net earnings attributable to The Kroger Co. per diluted common share			$	1.54		$	3.67		$	2.96

Average number of common shares used in diluted calculation				655			720			725

The accompanying notes are an integral part of the consolidated financial statements.

THE KROGER CO.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years Ended January 31, 2026, February 1, 2025 and February 3, 2024


									****
		2025		2024			2023
(In millions)	****	(52 weeks)		(52 weeks)			(53 weeks)		****
Net earnings including noncontrolling interests		$	1,024	$	2,672		$	2,169

Other comprehensive income (loss)
Change in pension and other postretirement defined benefit plans, net of income tax^(1)^			(25)		(37)			(46)
Unrealized gains and losses on cash flow hedging activities, net of income tax^(2)^			3		(103)			183
Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax^(3)^			8		8			6

Total other comprehensive (loss) income			(14)		(132)			143

Comprehensive income			1,010		2,540			2,312
Comprehensive income attributable to noncontrolling interests			8		7			5
Comprehensive income attributable to The Kroger Co.		$	1,002	$	2,533		$	2,307

(1)	Amount is net of tax benefit of $(7) in 2025, $(11) in 2024 and $(14) in 2023.
(2)	Amount is net of tax (benefit) expense of $(31) in 2024 and $56 in 2023.
---	---
(3)	Amount is net of tax expense of $2 in 2025, $1 in 2024 and $2 in 2023.
---	---

The accompanying notes are an integral part of the consolidated financial statements.

THE KROGER CO.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended January 31, 2026, February 1, 2025 and February 3, 2024


		2025			2024			2023
(In millions)	****	(52 weeks)			(52 weeks)			(53 weeks)		****
Cash Flows from Operating Activities:
Net earnings including noncontrolling interests		$	1,024		$	2,672		$	2,169
Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:
Depreciation and amortization			3,332			3,246			3,125
Fulfillment network impairment and related charges			2,497			—			—
Asset impairment and store closure charges			187			98			69
Operating lease asset amortization			588			603			625
LIFO charge			157			95			113
Share-based employee compensation			157			175			172
Deferred income taxes			(330)			(102)			(155)
Gain on sale of business			—			(79)			—
Gain on sale of assets			(13)			(70)			(56)
Loss on investments			41			148			(151)
Other			1			20			69
Changes in operating assets and liabilities:
Store deposits in-transit			68			(97)			(88)
Receivables			113			(288)			14
Inventories			(86)			(144)			342
Prepaid and other current assets			8			(166)			72
Accounts payable			388			253			545
Accrued expenses			165			107			(222)
Income taxes receivable and payable			(115)			76			68
Operating lease liabilities			(529)			(609)			(695)
Other			(342)			(144)			772

Net cash provided by operating activities			7,311			5,794			6,788

Cash Flows from Investing Activities:
Payments for property and equipment, including payments for lease buyouts			(3,855)			(4,017)			(3,904)
Proceeds from sale of assets			76			377			101
Net proceeds from sale of business			52			464			—
Other			(187)			(52)			53

Net cash used by investing activities			(3,914)			(3,228)			(3,750)

Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt			43			10,502			15
Payments on long-term debt including obligations under finance leases			(540)			(4,883)			(1,301)
Dividends paid			(885)			(883)			(796)
Financing fees paid			—			(116)			—
Proceeds from issuance of capital stock			182			127			50
Treasury stock purchases			(2,699)			(4,156)			(62)
Unsettled accelerated share repurchases			—			(1,000)			—
Other			(123)			(81)			(76)

Net cash used by financing activities			(4,022)			(490)			(2,170)

Net (decrease) increase in cash and temporary cash investments			(625)			2,076			868

Cash and temporary cash investments:
Beginning of year			3,959			1,883			1,015
End of year		$	3,334		$	3,959		$	1,883

Reconciliation of capital investments:
Payments for property and equipment, including payments for lease buyouts		$	(3,855)		$	(4,017)		$	(3,904)
Payments for lease buyouts			33			51			—
Changes in construction-in-progress payables			(40)			343			344
Total capital investments, excluding lease buyouts		$	(3,862)		$	(3,623)		$	(3,560)

Disclosure of cash flow information:
Cash paid during the year for net interest		$	633		$	252		$	488
Cash paid during the year for income taxes		$	635		$	681		$	751

The accompanying notes are an integral part of the consolidated financial statements.

THE KROGER CO.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

Years Ended January 31, 2026, February 1, 2025 and February 3, 2024


														Accumulated
						Additional								Other
	Common Stock					Paid-In			Treasury Stock					Comprehensive			Accumulated			Noncontrolling
(In millions, except per share amounts)	Shares		Amount			Capital			Shares		Amount			Income (Loss)			Earnings			Interest			Total
Balances at January 28, 2023	1,918		$	1,918		$	3,805		1,202		$	(20,650)		$	(632)		$	25,601		$	(28)		$	10,014
Issuance of common stock:
Stock options exercised	—			—			—		(2)			50			—			—			—			50
Restricted stock issued	—			—			(163)		(3)			88			—			—			—			(75)
Treasury stock activity:
Stock options exchanged	—			—			—		1			(62)			—			—			—			(62)
Share-based employee compensation	—			—			172		—			—			—			—			—			172
Other comprehensive income net of tax of 44	—			—			—		—			—			143			—			—			143
Other	—			—			108		—			(108)			—			—			9			9
Cash dividends declared (1.13 per common share)	—			—			—		—			—			—			(819)			—			(819)
Net earnings including non-controlling interests	—			—			—		—			—			—			2,164			5			2,169

Balances at February 3, 2024	1,918		$	1,918		$	3,922		1,198		$	(20,682)		$	(489)		$	26,946		$	(14)		$	11,601
Issuance of common stock:
Stock options exercised	—			—			—		(3)			127			—			—			—			127
Restricted stock issued	—			—			(176)		(3)			92			—			—			—			(84)
Treasury stock activity:
Treasury stock purchases, at cost	—			—			(1,000)		66			(4,038)			—			—			—			(5,038)
Stock options exchanged	—			—			—		—			(156)			—			—			—			(156)
Share-based employee compensation	—			—			175		—			—			—			—			—			175
Other comprehensive loss net of tax of (41)	—			—			—		—			—			(132)			—			—			(132)
Other	—			—			166		—			(166)			—			—			3			3
Cash dividends declared (1.25 per common share)	—			—			—		—			—			—			(887)			—			(887)
Net earnings including non-controlling interests	—			—			—		—			—			—			2,665			7			2,672

Balances at February 1, 2025	1,918		$	1,918		$	3,087		1,258		$	(24,823)		$	(621)		$	28,724		$	(4)		$	8,281
Issuance of common stock:
Stock options exercised	—			—			—		(5)			182			—			—			—			182
Restricted stock issued	—			—			(172)		(2)			90			—			—			—			(82)
Treasury stock activity:
Treasury stock purchases, at cost	—			—			655		48			(3,154)			—			—			—			(2,499)
Stock options exchanged	—			—			—		4			(228)			—			—			—			(228)
Share-based employee compensation	—			—			157		—			—			—			—			—			157
Other comprehensive loss net of tax of (5)	—			—			—		—			—			(14)			—			—			(14)
Other	—			—			180		—			(180)			—			—			5			5
Cash dividends declared (1.37 per common share)	—			—			—		—			—			—			(890)			—			(890)
Net earnings including non-controlling interests	—			—			—		—			—			—			1,016			8			1,024

Balances at January 31, 2026	1,918		$	1,918		$	3,907		1,303		$	(28,113)		$	(635)		$	28,850		$	9		$	5,936

All values are in US Dollars.

The accompanying notes are an integral part of the consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

All amounts in the Notes to Consolidated Financial Statements are in millions except per share amounts.

1.	ACCOUNTING POLICIES

The following is a summary of the significant accounting policies followed in preparing these financial statements.

Description of Business, Basis of Presentation and Principles of Consolidation

The Kroger Co. (the “Company”) was founded in 1883 and incorporated in 1902. The Company is a food and drug retailer that operates 2,697 supermarkets, 2,250 pharmacies and 1,731 fuel centers in 35 states and the District of Columbia while also operating online through a digital ecosystem to offer customers an omnichannel shopping experience. The Company also manufactures and processes food for sale by its supermarkets and online. The accompanying financial statements include the consolidated accounts of the Company, its wholly-owned subsidiaries and other consolidated entities. Intercompany transactions and balances have been eliminated.

Fiscal Year

The Company’s fiscal year ends on the Saturday nearest January 31. The last three fiscal years consist of the 52-week period ended January 31, 2026, the 52-week period ended February 1, 2025 and the 53-week period ended February 3, 2024.

Pervasiveness of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of consolidated revenues and expenses during the reporting period is also required. Actual results could differ from those estimates.

Cash, Temporary Cash Investments and Book Overdrafts

Cash and temporary cash investments represent store cash and short-term investments with original maturities of less than three months. Book overdrafts are included in “Accounts payable” and “Accrued salaries and wages” in the Consolidated Balance Sheets.

Deposits In-Transit

Deposits in-transit generally represent funds deposited to the Company’s bank accounts at the end of the year related to sales, a majority of which were paid for with debit cards, credit cards and checks, to which the Company does not have immediate access but settle within a few days of the sales transaction.

Inventories

Inventories are stated at the lower of cost (principally on a last-in, first-out “LIFO” basis) or market. In total, approximately 91% of inventories in 2025 and 92% of inventories in 2024 were valued using the LIFO method. The remaining inventories, including substantially all fuel inventories, are stated at the lower of cost (on a first-in, first-out “FIFO” basis) or net realizable value. Replacement cost was higher than the carrying amount by $2,553 at January 31, 2026 and $2,404 at February 1, 2025. The Company follows the Link-Chain, Dollar-Value LIFO method for purposes of calculating its LIFO charge.

The item-cost method of accounting to determine inventory cost before the LIFO adjustment is followed for substantially all store inventories at the Company’s supermarket divisions. This method involves counting each item in inventory, assigning costs to each of these items based on the actual purchase costs (net of vendor allowances and cash discounts) of each item and recording the cost of items sold. The item-cost method of accounting allows for more accurate reporting of periodic inventory balances and enables management to more precisely manage inventory. In addition, substantially all of the Company’s inventory consists of finished goods and is recorded at actual purchase costs (net of vendor allowances and cash discounts).

The Company evaluates inventory shortages throughout the year based on actual physical counts in its facilities. Allowances for inventory shortages are recorded based on the results of these counts to provide for estimated shortages as of the financial statement date.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost or, in the case of assets acquired in a business combination, at fair value. Depreciation and amortization expense, which includes the depreciation of assets recorded under finance leases, is computed principally using the straight-line method over the estimated useful lives of individual assets. Buildings and land improvements are depreciated based on lives varying from 10 to 40 years. All new purchases of store equipment are assigned lives varying from three to nine years. Leasehold improvements are amortized over the shorter of the lease term to which they relate, which generally varies from four to 25 years, or the useful life of the asset. Food production plant, fulfillment center and distribution center equipment is depreciated over lives varying from three to 15 years. Information technology assets are generally depreciated over three to five years. Depreciation and amortization expense was $3,332 in 2025, $3,246 in 2024, and $3,125 in 2023.

Interest costs on significant projects constructed for the Company’s own use are capitalized as part of the costs of the newly constructed facilities. Upon retirement or disposal of assets, the cost and related accumulated depreciation and amortization are removed from the balance sheet and any gain or loss is reflected in net earnings. Refer to Note 3 for further information regarding the Company’s property, plant and equipment.

Leases

The Company leases certain store real estate, warehouses, distribution centers, fulfillment centers, office space and equipment. The Company determines if an arrangement is a lease at inception. Finance and operating lease assets and liabilities are recognized at the lease commencement date. Finance and operating lease liabilities represent the present value of minimum lease payments not yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments, lease incentives and impairment, if any. To determine the present value of lease payments, the Company estimates an incremental borrowing rate which represents the rate used for a secured borrowing of a similar term as the lease.

Lease terms generally range from 10 to 20 years with options to renew for varying terms at the Company’s sole discretion. The lease term includes the initial contractual term as well as any options to extend the lease when it is reasonably certain the Company will exercise that option. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases include escalation clauses or payment of executory costs such as property taxes, utilities or insurance and maintenance. Operating lease payments are charged on a straight-line basis to rent expense over the lease term and finance lease payments are charged to interest expense and depreciation and amortization expense over the lease term. Assets under finance leases are amortized in accordance with the Company’s normal depreciation policy for owned assets or over the lease term, if shorter. The Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants. See Note 9 for additional information on leases.

Goodwill

The Company reviews goodwill for impairment during the fourth quarter of each year, or earlier upon the occurrence of a triggering event. The Company performs reviews of each of its operating divisions and other consolidated entities (collectively, “reporting units”) that have goodwill balances. Generally, fair value is determined using a market multiple model, or discounted projected future cash flows, and is compared to the carrying value of a reporting unit for purposes of identifying potential impairment. Projected future cash flows are based on management’s knowledge of the current operating environment and expectations for the future. Goodwill impairment is recognized for any excess of the reporting unit’s carrying value over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Results of the goodwill impairment reviews performed during 2025, 2024, and 2023 are summarized in Note 2.

Impairment of Long-Lived Assets

The Company monitors the carrying value of long-lived assets for potential impairment each quarter based on whether certain triggering events have occurred. These events include current period losses combined with a history of losses or a projection of continuing losses or a significant decrease in the market value of an asset. When a triggering event occurs, an impairment calculation is performed, comparing projected undiscounted future cash flows, utilizing current cash flow information and expected growth rates related to specific asset groups, to the carrying value for those asset groups. If the Company identifies impairment for long-lived assets to be held and used, the Company compares the assets’ current carrying value to the assets’ fair value. Fair value is based on current market values or discounted future cash flows. The Company records impairment when the carrying value exceeds fair market value. With respect to owned property and equipment held for disposal, the value of the property and equipment is adjusted to reflect recoverable values based on previous efforts to dispose of similar assets and current economic conditions. Impairment is recognized for the excess of the carrying value over the estimated fair market value, reduced by estimated direct costs of disposal. The Company recorded asset impairment and related charges totaling $2,684 for 2025. This includes store closure costs of $100, $77 net of tax, related to the planned closing of approximately 60 stores, impairment of intangible assets of $50, $34 net of tax, related to classifying a certain subsidiary as held for sale and charges of $2,497, $1,908 net of tax, related to our fulfillment network not meeting operational or financial expectations, the planned closing of three automated fulfillment facilities and the cancellation of a planned site (see Note 19 for additional details). The Company recorded asset impairments in the normal course of business totaling $98 in 2024, which includes $25, $19 net of tax, for property losses. The Company recorded asset impairments in the normal course of business totaling $69 in 2023. Costs to reduce the carrying value of long-lived assets for each of the years presented have been included in the Consolidated Statements of Operations as operating, general and administrative (“OG&A”) expense.

Accounts Payable Financing Arrangement

The Company has an agreement with a third party to provide an accounts payable tracking system which facilitates participating suppliers’ ability to finance payment obligations from the Company with designated third-party financial institutions. Participating suppliers may, at their sole discretion, make offers to finance one or more payment obligations of the Company prior to their scheduled due dates at a discounted price to participating financial institutions. The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not affected by suppliers’ decisions to finance amounts under this arrangement. The payment term that the Company has with participating suppliers under these programs is approximately 90 days. Outstanding obligations under this financing arrangement are included in “Accounts payable” in the Consolidated Balance Sheets.

As of January 31, 2026 and February 1, 2025, the Company had $277 and $294 in “Accounts payable,” respectively, associated with financing arrangements.

The following table summarizes the changes in the Company’s outstanding obligations under this financing arrangement through January 31, 2026:


			2025		2024
Balance at the beginning of the year		$	294	$	325
Invoices confirmed during the year			1,473		1,797
Confirmed invoices paid during the year			(1,490)		(1,828)
Balance at the end of the year		$	277	$	294

Store Closing Costs

The Company regularly evaluates the performance of its stores and periodically closes those stores that are underperforming. Related liabilities arise, such as severance, contractual obligations and other accruals associated with store closings. The Company records a liability for costs associated with an exit or disposal activity when the liability is incurred, usually in the period the store closes. Adjustments to closed store liabilities primarily relate to actual exit costs differing from original estimates. Adjustments are made for changes in estimates in the period in which the change becomes known.

Owned stores held for disposal are reduced to their estimated net realizable value. Costs to reduce the carrying values of property, plant, equipment and operating lease assets are accounted for in accordance with the Company’s policy on impairment of long-lived assets. Inventory write-downs, if any, in connection with store closings, are classified in the Consolidated Statements of Operations as “Merchandise costs.” Costs to transfer inventory and equipment from closed stores are expensed as incurred.

Interest Rate Risk Management

The Company uses derivative instruments primarily to manage its exposure to changes in interest rates. The Company’s current program relative to interest rate protection and the methods by which the Company accounts for its derivative instruments are described in Note 6.

Benefit Plans and Multi-Employer Pension Plans

The Company recognizes the funded status of its retirement plans on the Consolidated Balance Sheets. Actuarial gains or losses, prior service costs or credits and transition obligations that have not yet been recognized as part of net periodic benefit cost are required to be recorded as a component of Accumulated Other Comprehensive Income (“AOCI”). The Company has elected to measure defined benefit plan assets and obligations as of January 31, which is the month-end that is closest to its fiscal year-ends.

The determination of the obligation and expense for company-sponsored pension plans and other post-retirement benefits is dependent on the selection of assumptions used by actuaries and the Company in calculating those amounts. Those assumptions are described in Note 14 and include, among others, the discount rate, the expected long-term rate of return on plan assets, mortality and the rates of increase in compensation and health care costs. Actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, generally affect the recognized expense and recorded obligation in future periods. While the Company believes the assumptions are appropriate, significant differences in actual experience or significant changes in assumptions may materially affect the pension and other post-retirement obligations and future expense.

The Company also participates in various multi-employer plans for substantially all union employees. Pension expense for these plans is recognized as contributions are funded or when commitments are probable and reasonably estimable, in accordance with GAAP. Refer to Note 15 for additional information regarding the Company’s participation in these various multi-employer pension plans.

The Company administers and makes contributions to the employee 401(k) retirement savings accounts. Contributions to the employee 401(k) retirement savings accounts are expensed when contributed or over the service period in the case of automatic contributions. Refer to Note 14 for additional information regarding the Company’s benefit plans.

Share Based Compensation

The Company recognizes compensation expense for all share-based payments granted under fair value recognition provisions. The Company recognizes share-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award based on the fair value at the date of the grant. The Company grants options for common shares (“stock options”) to employees under various plans at an option price equal to the fair market value of the underlying shares on the grant date of the award. Stock options typically expire 10 years from the date of grant. Stock options vest between one and four years from the date of grant. In addition to stock options, the Company awards restricted stock to employees and incentive shares to nonemployee directors under various plans. The restrictions on these restricted stock awards generally lapse between one and four years from the date of the awards. The Company determines the fair value for restricted stock awards in an amount equal to the fair market value of the underlying shares on the grant date of the award.

Deferred Income Taxes

Deferred income taxes are recorded to reflect the tax consequences of differences between the tax basis of assets and liabilities and their financial reporting basis. Refer to Note 4 for the types of differences that give rise to significant portions of deferred income tax assets and liabilities.

Uncertain Tax Positions

The Company reviews the tax positions taken or expected to be taken on tax returns to determine whether and to what extent a benefit can be recognized in its consolidated financial statements. Refer to Note 4 for the amount of unrecognized tax benefits and other related disclosures related to uncertain tax positions.

Various taxing authorities periodically audit the Company’s income tax returns. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. As of January 31, 2026, the years ended January 29, 2022 and forward remain open for review for federal income tax purposes.

The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.

Self-Insurance Costs

The Company is primarily self-insured for costs related to workers’ compensation and general liability claims. Liabilities are actuarially determined and are recognized based on claims filed and an estimate of claims incurred but not reported. The liabilities for workers’ compensation claims are accounted for on a present value basis. The Company has purchased stop-loss coverage to limit its exposure to any significant exposure on a per claim basis. The Company is insured for covered costs in excess of these per claim limits.

The following table summarizes the changes in the Company’s self-insurance liability through January 31, 2026:


		2025			2024			2023		****
Beginning balance		$	843		$	761		$	712
Expense^(1)^			457			427			330
Claim payments			(387)			(345)			(281)
Ending balance			913			843			761
Less: Current portion			(387)			(345)			(281)
Long-term portion		$	526		$	498		$	480
(1)	The increase in 2025, compared to 2024, and the increase in 2024, compared to 2023, were the result of higher claim costs.
---	---

The current portion of the self-insured liability is included in “Other current liabilities,” and the long-term portion is included in “Other long-term liabilities” in the Consolidated Balance Sheets.

The Company maintains surety bonds related to self-insured workers’ compensation claims. These bonds are required by most states in which the Company is self-insured for workers’ compensation and are placed with third-party insurance providers to insure payment of the Company’s obligations in the event the Company is unable to meet its claim payment obligations up to its self-insured retention levels. These bonds do not represent liabilities of the Company, as the Company has recorded reserves for the claim costs.

The Company also maintains insurance coverages for certain risks, including cyber exposure and property-related losses. The Company’s insurance coverage begins for these exposures ranging from $20 to $30.

Revenue Recognition

Sales

The Company recognizes revenues from the retail sale of products, net of sales taxes, at the point of sale. Pharmacy sales are recorded when the product is provided to the customer. eCommerce-originated sales are recognized either upon pickup in store or upon delivery to the customer. Amounts billed to a customer related to shipping and delivery represent revenues earned for the goods provided and are classified as sales. When shipping is discounted, it is recorded as an adjustment to sales. Discounts provided to customers by the Company at the time of sale, including those provided in connection with loyalty cards, are recognized as a reduction in sales as the products are sold. Discounts provided by vendors, usually in the form of coupons, are not recognized as a reduction in sales provided the coupons are redeemable at any retailer that accepts coupons. The Company records a receivable from the vendor for the difference in sales price and cash received. For merchandise sold in one of the Company’s stores or online, tender is accepted at the point of sale. The Company acts as principal in certain vendor arrangements where the purchase and sale of inventory are virtually simultaneous. The Company records revenue and related costs on a gross basis for these arrangements. For pharmacy sales, collection of third-party receivables is typically expected within three months or less from the time of purchase. The third-party receivables from pharmacy sales are recorded in “Receivables” in the Company’s Consolidated Balance Sheets and were $631 as of January 31, 2026 and $622 as of February 1, 2025.

Gift Cards and Gift Certificates

The Company does not recognize revenue when it sells its own gift cards and gift certificates (collectively “gift cards”). Rather, it records a deferred revenue liability equal to the amount received. A sale is then recognized when the gift cards are redeemed to purchase the Company’s products. The Company’s gift cards do not expire. While gift cards are generally redeemed within 12 months, some are never fully redeemed. The Company recognizes gift card breakage under the proportional method, where recognition of breakage income is based upon the historical run-off rate of unredeemed gift cards. The Company’s gift card deferred revenue liability was $286 as of January 31, 2026 and $256 as of February 1, 2025.

Disaggregated Revenues

The following table presents sales revenue by type of product for the years ended January 31, 2026, February 1, 2025, and February 3, 2024:


		2025					2024^(3)^					2023^(3)^				****
		Amount			% of total		Amount			% of total		Amount			% of total	****
Non perishable^(1)^		$	77,569		52.5	%	$	77,080		52.4	%	$	78,215		52.1	%
Fresh^(2)^			37,189		25.2	%		36,317		24.7	%		36,568		24.4	%
Supermarket fuel			13,584		9.2	%		14,973		10.2	%		16,621		11.1	%
Pharmacy			18,171		12.3	%		15,691		10.6	%		14,406		9.6	%
Other^(4)^			1,129		0.8	%		3,062		2.1	%		4,229		2.8	%

Total Sales		$	147,642		100	%	$	147,123		100	%	$	150,039		100	%
(1)	Consists primarily of grocery, general merchandise, health and beauty care and natural foods.
---	---
(2)	Consists primarily of produce, floral, meat, seafood, deli, bakery and fresh prepared.
---	---
(3)	2024 and 2023 revenues by category have been reclassified to conform to the 2025 presentation.
---	---
(4)	Consists primarily of sales related to third-party media revenue, data analytic services, specialty pharmacy and in-store health clinics. The decrease in 2025, compared to 2024, and the decrease in 2024, compared to 2023, are primarily due to the disposal of Kroger Specialty Pharmacy, partially offset by an increase in third-party media revenue.
---	---

Merchandise Costs

The “Merchandise costs” line item of the Consolidated Statements of Operations includes product costs, net of discounts and allowances; advertising costs (see separate discussion below); inbound freight charges; warehousing costs, including receiving and inspection costs; transportation costs and food production costs. Warehousing, transportation and manufacturing management salaries are also included in the “Merchandise costs” line item; however, purchasing management salaries and administration costs are included in the “OG&A” line item along with most of the Company’s other managerial and administrative costs. Shipping and delivery costs associated with the Company’s eCommerce offerings originating from non-retail store locations are included in the “Merchandise costs” line item. Rent expense and depreciation and amortization expense are shown separately in the Consolidated Statements of Operations.

Warehousing and transportation costs include distribution center direct wages, transportation direct wages, repairs and maintenance, utilities, inbound freight and, where applicable, third-party warehouse management fees. These costs are recognized in the periods the related expenses are incurred.

The Company believes the classification of costs included in merchandise costs could vary widely throughout the industry. The Company’s approach is to include in the “Merchandise costs” line item the direct, net costs of acquiring products and making them available to customers. The Company believes this approach most accurately presents the actual costs of products sold.

The Company recognizes all vendor allowances as a reduction in merchandise costs when the related product is sold. When possible, vendor allowances are applied to the related product cost by item and, therefore, reduce the carrying value of inventory by item. When the items are sold, the vendor allowance is recognized. When it is not possible, due to systems constraints, to allocate vendor allowances to the product by item, vendor allowances are recognized as a reduction in merchandise costs based on inventory turns and, therefore, recognized as the product is sold.

Advertising Costs

The Company’s advertising costs are recognized in the periods the related expenses are incurred and are included in the “Merchandise costs” line item of the Consolidated Statements of Operations. The Company’s advertising costs totaled $1,180 in 2025, $1,171 in 2024 and $1,089 in 2023. The Company does not record vendor allowances for co-operative advertising as a reduction of advertising expense.

Operating, General and Administrative Expenses

OG&A expenses consist primarily of employee-related costs such as wages, healthcare benefit costs, retirement plan costs, utilities, and credit card fees. Shipping and delivery costs associated with the Company's eCommerce offerings originating from retail store locations, including third-party delivery fees, are included in the “OG&A” line item of the Consolidated Statements of Operations. Rent expense, depreciation and amortization expense and interest expense are shown separately in the Consolidated Statement of Operations.

Consolidated Statements of Cash Flows

For purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be temporary cash investments.

2.	GOODWILL AND INTANGIBLE ASSETS

The following table summarizes the changes in the Company’s net goodwill balance through January 31, 2026:


		2025			2024		****
Balance beginning of year
Goodwill		$	5,385		$	5,737
Accumulated impairment losses			(2,711)			(2,821)
Subtotal			2,674			2,916

Activity during the year
Held for sale adjustment (see Note 7)			(79)			—
Sale of Kroger Specialty Pharmacy (see Note 17)			—			(242)


Balance end of year
Goodwill			5,146			5,385
Accumulated impairment losses			(2,551)			(2,711)
Total Goodwill		$	2,595		$	2,674

Testing for impairment is performed annually, or on an interim basis upon the occurrence of a triggering event or a change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The annual evaluation of goodwill and indefinite-lived intangible assets was performed during the fourth quarter of 2025, 2024, and 2023. The evaluation did not result in impairment in 2025 or 2023. The evaluation resulted in an impairment of indefinite-lived trade name assets in 2024.

The following table summarizes the Company’s intangible assets balance through January 31, 2026:


		2025						2024					****
		Gross carrying			Accumulated			Gross carrying			Accumulated		****
		amount			amortization^(1)^			amount			amortization^(1)^		****
Definite-lived pharmacy prescription files		$	289		$	(203)		$	247		$	(183)
Definite-lived customer relationships^(2)^			—			—			148			(145)
Definite-lived other^(2)^			67			(55)			106			(92)
Indefinite-lived trade name			611			—			655			—
Indefinite-lived liquor licenses			99			—			98			—

Total		$	1,066		$	(258)		$	1,254		$	(420)
(1)	Pharmacy prescription files are amortized to merchandise costs, customer relationships are amortized to depreciation and amortization expense and other intangibles are amortized to OG&A expense and depreciation and amortization expense.
---	---
(2)	The reduction of these definite-lived intangible assets between 2025 and 2024 are primarily the result of the sale of Vitacost.com and the classification of a certain subsidiary as held for sale in 2025.
---	---

Based on the results of the Company’s impairment assessment in the fourth quarter of 2024, a $30, $24 net of tax, impairment was recognized for indefinite-lived trade names.

Amortization expense associated with intangible assets totaled approximately $30, $30, and $42, during fiscal years 2025, 2024, and 2023, respectively. Future amortization expense associated with the net carrying amount of definite-lived intangible assets for the years subsequent to 2025 is estimated to be approximately:


2026	$	18
2027		17
2028		17
2029		16
2030		14
Thereafter		16

Total future estimated amortization associated with definite-lived intangible assets	$	98

3.	PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consists of:


		2025			2024		****
Land		$	3,624		$	3,609
Buildings and land improvements			16,754			16,100
Equipment			21,130			21,082
Leasehold improvements			13,747			13,287
Construction-in-progress			2,820			3,162
Leased property under finance leases			1,948			2,832

Total property, plant and equipment			60,023			60,072
Accumulated depreciation and amortization			(35,763)			(34,369)

Property, plant and equipment, net		$	24,260		$	25,703

Accumulated depreciation and amortization for leased property under finance leases was $1,038 at January 31, 2026 and $915 at February 1, 2025.

Capitalized implementation costs associated with cloud computing arrangements of $246, net of accumulated amortization of $143, and $270, net of accumulated amortization of $97, are included in “Other assets” in the Company’s Consolidated Balance Sheets as of January 31, 2026 and February 1, 2025, respectively. The corresponding cash flows related to these arrangements are included in “Net cash provided by operating activities” in the Company’s Consolidated Statements of Cash Flows.

4.	TAXES BASED ON INCOME

The provision for taxes based on income consists of:


		2025			2024			2023		****
Federal
Current		$	333		$	598		$	707
Deferred			(217)			(62)			(130)

Subtotal federal			116			536			577

State and local
Current			79			97			114
Deferred			(50)			13			(24)

Subtotal state and local			29			110			90

Foreign
Current			31			24			—

Total		$	176		$	670		$	667

A reconciliation of the U.S federal statutory tax rate to the Company’s effective income tax rate in accordance with the updated requirements of ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” is as follows:


		2025
		Amount			% of total
U.S. Federal statutory tax rate		$	252		21.0	%
State and Local income taxes, net of Federal income tax effect^(1)^			23		1.9	%
Foreign tax effect - Switzerland			31		2.6	%
Tax credits
Foreign tax credit - Switzerland			(31)		(2.6)	%
Work opportunity tax credits			(13)		(1.1)	%
Other tax credits			(4)		(0.3)	%
Nontaxable or nondeductible items
Excess tax benefits from share-based payments			(34)		(2.8)	%
Other nontaxable or nondeductible items			(9)		(0.8)	%
Changes in unrecognized tax benefits			(9)		(0.7)	%
Other
Tax benefit from the sale of Vitacost.com			(30)		(2.5)	%

Effective income tax rate		$	176		14.7	%
(1)	State taxes in Oregon and Tennessee made up the majority (greater than 50 percent) of the tax effect in this category for 2025.
---	---

As previously disclosed for the tax years 2024 and 2023, prior to the adoption of ASU 2023-09, a reconciliation of the U.S federal statutory tax rate to the effective income tax rate follows:


	2024		2023	****
U.S. Federal statutory rate	21.0	%	21.0	%
State income taxes, net of federal tax benefit	2.6		2.5
Credits	(0.8)		(1.1)
Resolution of tax audit examinations	(0.2)		—
Excess tax benefits from share-based payments	(0.9)		(0.7)
Non-deductible legal settlements	(0.1)		1.4
Non-deductible executive compensation	0.2		0.3
Tax benefit from sale of Kroger Specialty Pharmacy	(0.9)		—
Other changes, net	(0.9)		0.1

Effective income tax rate	20.0	%	23.5	%

The 2025 tax rate differed from the federal statutory rate due to a tax benefit from share-based payments, recognizing deferred tax assets related to the sale of Vitacost.com and the utilization of tax credits and deductions, partially offset by the effect of state income taxes.

The 2024 tax rate differed from the federal statutory rate due to a tax benefit from recognizing deferred tax assets related to the sale of Kroger Specialty Pharmacy, the benefit from share-based payments and the utilization of tax credits, partially offset by the effect of state income taxes.

The 2023 tax rate differed from the federal statutory rate due to the effect of state income taxes and the nondeductible portion of opioid settlement charges, partially offset by the benefit from share-based payments and the utilization of tax credits.

The tax effects of significant temporary differences that comprise tax balances were as follows:


		2025			2024		****
Deferred tax assets:
Compensation related costs		$	334		$	338
Lease liabilities			2,015			2,126
Closed store reserves			154			58
Net operating loss, credit and other carryforwards			113			70
Deferred income			60			83
Legal settlements			238			303
Allowance for uncollectible receivables			23			24
Other			126			44

Subtotal			3,063			3,046
Valuation allowance			(72)			(54)

Total deferred tax assets			2,991			2,992

Deferred tax liabilities:
Depreciation and amortization			(1,894)			(1,895)
Operating lease assets			(1,670)			(2,002)
Insurance related costs			(240)			(229)
Inventory related costs			(270)			(283)

Total deferred tax liabilities			(4,074)			(4,409)

Net deferred tax liabilities		$	(1,083)		$	(1,417)

As of January 31, 2026, deferred tax assets of $11 are included in “Other Assets” in the Company’s Consolidated Balance Sheets.

At January 31, 2026, the Company had net operating loss carryforwards for state income tax purposes of $1,655. The majority of these net operating loss carryforwards expire from 2026 through 2045. The utilization of certain of the Company’s state net operating loss carryforwards may be limited in a given year. Further, based on the analysis described below, the Company has recorded a valuation allowance against some of the deferred tax assets resulting from its state net operating losses.

At January 31, 2026, the Company had state credit carryforwards of $6 that expire from 2026 through 2039. The utilization of certain of the Company’s credits may be limited in a given year. Further, based on the analysis described below, the Company has recorded a valuation allowance against some of the deferred tax assets resulting from its state credits.

At January 31, 2026, the Company had a capital loss carryforward for federal income tax purposes of $165 that expires in 2030. The utilization of certain of the Company’s capital loss may be limited in a given year. Further, based on the analysis described below, the Company has recorded a valuation allowance against some of the deferred tax assets resulting from its capital loss.

The Company regularly reviews all deferred tax assets on a tax filer and jurisdictional basis to estimate whether these assets are more likely than not to be realized based on all available evidence. This evidence includes historical taxable income, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies. Projected future taxable income is based on expected results and assumptions as to the jurisdiction in which the income will be earned. The expected timing of the reversals of existing temporary differences is based on current tax law and the Company’s tax methods of accounting. Unless deferred tax assets are more likely than not to be realized, a valuation allowance is established to reduce the carrying value of the deferred tax asset until such time that realization becomes more likely than not. Increases and decreases in these valuation allowances are included in "Income tax expense" in the Consolidated Statements of Operations. As of January 31, 2026, February 1, 2025, and February 3, 2024, the total valuation allowance was $72, $54, and $55, respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, including positions affecting only the timing of tax benefits, is as follows:


		2025			2024			2023		****
Beginning balance		$	102		$	90		$	93
Additions based on tax positions related to the current year			8			11			10
Additions for tax positions of prior years			2			12			3
Reductions for tax positions of prior years			(2)			—			(9)
Settlements			(10)			(4)			(1)
Lapse of statute			(13)			(7)			(6)
Ending balance		$	87		$	102		$	90

As of January 31, 2026, February 1, 2025, and February 3, 2024 the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was $57, $70, and $62 respectively.

To the extent interest and penalties would be assessed by taxing authorities on any underpayment of income tax, such amounts have been accrued and classified as a component of income tax expense. During the years ended February 1, 2025 and February 3, 2024, the Company recognized approximately $4 and $1, respectively, in interest and penalties. During the year ended January 31, 2026, the Company did not recognize any interest and penalties. The Company had accrued approximately $20, $19, and $15 for the payment of interest and penalties as of January 31, 2026, February 1, 2025, and February 3, 2024, respectively.

As of January 31, 2026, the years ended January 29, 2022 and forward remain open for review for federal income tax purposes.

The components of cash paid for income taxes, net of refunds, are as follows:


		2025
Federal		$	512
State			85
Switzerland			38

Total cash taxes paid, net of refunds		$	635

Income taxes paid (net of refunds) did not exceed five percent of total income taxes paid (net of refunds) in any jurisdiction other than in Switzerland.

5.	DEBT OBLIGATIONS

Long-term debt consists of:


		January 31,			February 1,
		2026			2025
1.70% to 8.00% Senior Notes due through 2064		$	14,864		$	14,854
Other			1,011			1,055

Total debt, excluding obligations under finance leases			15,875			15,909
Less current portion			(1,366)			(104)

Total long-term debt, excluding obligations under finance leases		$	14,509		$	15,805

In 2024, the Company issued $10,500 of senior notes to pay a portion of the cash consideration for its proposed merger with Albertsons and general corporate purposes. The Company repaid certain senior notes of $4,700 that were subject to a special mandatory redemption due to the termination of the merger. See Note 18 for additional information related to these issuances and repayments.

On September 13, 2024, the Company entered into an unsecured revolving credit facility (the “Credit Agreement”), with a termination date of September 13, 2029, unless extended as permitted under the Credit Agreement. The Credit Agreement amended the agreement governing the Company’s $2,750 credit facility that would otherwise have terminated on July 6, 2026. Under the Credit Agreement, the aggregate amount of initial commitments under the revolving credit facility is $2,750, which could have been increased by $2,250 to $5,000 upon the closing date of the proposed merger with Albertsons (such additional commitments, the “Albertsons Closing Date Additional Commitments”). Concurrently with the termination of the merger agreement (the “Merger Agreement”) with Albertsons on December 11, 2024, the Albertsons Closing Date Additional Commitments were automatically terminated in accordance with the terms of the Credit Agreement. On and after December 11, 2024, the amount of outstanding commitments under the Credit Agreement is $2,750.

Borrowings under the Credit Agreement bear interest, at the Company’s option, at either (i) adjusted Term Secured Overnight Financing Rate (“SOFR”) plus a market spread, based on the Company’s Public Debt Rating or (ii) the base rate, defined as the highest of (a) the Federal Funds Rate plus 0.5%, (b) Wells Fargo’s prime rate, and (c) one month Term SOFR plus 1.0%, plus a market rate spread based on the Company’s Public Debt Rating. The Company will also pay a Commitment Fee based on its Public Debt Rating and Letter of Credit fees equal to a market rate spread based on the Company’s Public Debt Rating. “Public Debt Rating” means, as of any date, the rating that has been most recently announced by either S&P or Moody’s, as the case may be, for any class of non-credit enhanced long-term senior unsecured debt issued by the Company.

The Credit Agreement contains a covenant, which, among other things, requires the maintenance of a leverage ratio of not greater than 3.50:1.00. The Company may repay the Credit Agreement in whole or in part at any time without premium or penalty. The Credit Agreement is not guaranteed by the Company’s subsidiaries.

Cash paid for interest expense related to long term debt including obligations under finance leases was $832, $554 and $636 for 2025, 2024 and 2023, respectively. Interest income of approximately $199, $311 and $118 for 2025, 2024 and 2023, respectively, is included in “Net interest expense” in the Company’s Consolidated Statements of Operations.

See Note 18 for additional information about the Company’s unsecured bridge term loan facility, term loan credit agreement and completed senior notes issuance related to the terminated Albertsons merger.

As of January 31, 2026 and February 1, 2025, Other debt consisted primarily of a financial obligation related to a sale transaction for properties that did not qualify for sale-leaseback accounting treatment in 2021.

As of January 31, 2026 and February 1, 2025, the Company had no commercial paper borrowings and no borrowings under the Credit Agreement.

As of January 31, 2026, the Company had outstanding letters of credit in the amount of $29, of which $3 reduces funds available under the Credit Agreement. As of February 1, 2025, the Company had outstanding letters of credit in the amount of $261, of which $1 reduces funds available under the Credit Agreement. The letters of credit are maintained primarily to support performance, payment, deposit or surety obligations of the Company.

Most of the Company’s outstanding publicly issued debt is subject to early redemption at varying times and premiums, at the option of the Company.

The aggregate annual maturities and scheduled payments of long-term debt, as of year-end 2025, and for the years subsequent to 2025 are:


2026	$	1,366
2027		606
2028		665
2029		557
2030		1,035
Thereafter		11,646

Total debt	$	15,875

6.	DERIVATIVE FINANCIAL INSTRUMENTS

GAAP requires that derivatives be carried at fair value on the balance sheet and provides for hedge accounting when certain conditions are met. The Company’s derivative financial instruments are recognized on the balance sheet at fair value. Changes in the fair value of derivative instruments designated as “cash flow” hedges, to the extent the hedges are highly effective, are recorded in other comprehensive income, net of tax effects. Ineffective cash flow hedges, if any, are recognized in current period earnings. Other comprehensive income or loss is reclassified into current period earnings when the hedged transaction affects earnings. Changes in the fair value of derivative instruments designated as “fair value” hedges, along with corresponding changes in the fair values of the hedged assets or liabilities, are recorded in current period earnings. Ineffective fair value hedges, if any, are recognized in current period earnings. Changes in fair value of derivative instruments not designated as hedges are recognized in current period earnings and included in “(Loss) gain on investments” in the Company’s Consolidated Statements of Operations.

The Company assesses, both at the inception of the hedge and on an ongoing basis, whether derivatives used as hedging instruments are highly effective in offsetting the changes in the fair value or cash flow of the hedged items. If it is determined that a derivative is not highly effective as a hedge or ceases to be highly effective, the Company discontinues hedge accounting prospectively.

Interest Rate Risk Management

The Company is exposed to market risk from fluctuations in interest rates. The Company manages its exposure to interest rate fluctuations through the use of a commercial paper program, interest rate swaps (fair value hedges) and forward-starting interest rate swaps (cash flow hedges). The Company’s current program relative to interest rate protection contemplates hedging the exposure to changes in the fair value of fixed-rate debt attributable to changes in interest rates. To do this, the Company uses the following guidelines: (i) use average daily outstanding borrowings to determine annual debt amounts subject to interest rate exposure, (ii) limit the average annual amount subject to interest rate reset and the amount of floating rate debt to a combined total amount that represents 25% of the carrying value of the Company’s debt portfolio or less, (iii) include no leveraged products, and (iv) hedge without regard to profit motive or sensitivity to current mark-to-market status.

The Company reviews compliance with these guidelines annually with the Finance Committee of the Board of Directors. These guidelines may change as the Company’s needs dictate.

Fair Value Interest Rate Swaps

The Company did not have any outstanding interest rate derivatives classified as fair value hedges as of January 31, 2026 or February 1, 2025.

Cash Flow Forward-Starting Interest Rate Swaps

The Company did not have any outstanding forward-starting interest rate swaps as of January 31, 2026 or February 1, 2025.

As of February 3, 2024, the Company had five forward-starting interest rate swap agreements with a maturity date of August 1, 2027 with an aggregate notional amount totaling $5,350. A forward-starting interest rate swap is an agreement that effectively hedges the variability in future benchmark interest payments attributable to changes in interest rates on the forecasted issuance of fixed-rate debt. The Company entered into these forward-starting interest rate swaps to hedge the variability in future benchmark interest payments attributable to changing interest rates on the forecasted issuance of fixed-rate debt that was issued in 2024. A notional amount of $2,350 of these forward-starting interest rate swaps was designated as a cash-flow hedge as defined by GAAP. Accordingly, the changes in fair value of these forward-starting interest rate swaps are recorded to accumulated other comprehensive income and reclassified into net earnings when the hedged transaction affects net earnings. The remainder of the notional amount of $3,000 of the forward-starting interest rate swaps was not designated as a cash-flow hedge. Accordingly, the changes in the fair value of these forward-starting interest rate swaps not designated as cash-flow hedges are recognized through net earnings. In 2023, the Company recognized an unrealized gain of $174 related to these swaps that is included in “(Loss) gain on investments” in the Company’s Consolidated Statements of Operations.

In 2024, the Company terminated these five forward-starting interest rate swaps with a maturity date of August 1, 2027 with an aggregate notional amount totaling $5,350. For the notional amount of $2,350 of these forward-starting interest rate swaps that was designated as a cash-flow hedge, the unamortized gain of $48, $36 net of tax, has been deferred in accumulated other comprehensive income and will be amortized to earnings as the interest payments are made. For the remainder of the notional amount of $3,000 of the forward-starting interest rate swaps not designated as a cash-flow hedge, the Company recognized a realized loss of $55 that is included in “(Loss) gain on investments” in the Company’s Consolidated Statements of Operations.

In 2024, the Company entered into two 10-year treasury lock agreements with an aggregate notional amount of $2,100 and a weighted-average interest rate of 3.91% and two 30-year treasury lock agreements with an aggregate notional amount of $3,250 and a weighted-average interest rate of 4.11%. These treasury locks were an agreement used to hedge the U.S. Treasury benchmark interest rate associated with future interest payments on the forecasted issuance of fixed-rate debt that was issued in 2024. These treasury locks were designated as cash-flow hedges as defined by GAAP. Accordingly, the changes in fair value of these treasury locks are recorded to accumulated other comprehensive income and reclassified into net earnings when the hedged transaction affects net earnings. In 2024, the Company terminated these treasury lock agreements. The unamortized loss of $56, $43 net of tax, has been deferred in accumulated other comprehensive loss and will be amortized to earnings as the interest payments are made.

The following table summarizes the effect of the Company’s derivative instruments designated as cash flow hedges for 2025, 2024, and 2023:


		Year-To-Date																	****
		Amount of Gain/(Loss) in								Amount of Gain/(Loss)									****
Derivatives in Cash Flow Hedging		AOCI on Derivative								Reclassified from AOCI into Income								Location of Gain/(Loss)	****
Relationships		2025		2024			2023			2025		2024			2023			Reclassified into Income	****
Forward-Starting Interest Rate Swaps, net of tax^(1)^		$	(26)	$	(34)		$	60		$	(8)	$	(8)		$	(6)		Net interest expense

(1)	The amounts of Gain/(Loss) reclassified from AOCI into income on derivatives include unamortized proceeds and payments from forward-starting interest rate swaps once classified as cash flow hedges that were terminated prior to the end of 2024.

7.	FAIR VALUE MEASUREMENTS

GAAP establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of the fair value hierarchy defined in the standards are as follows:

Level 1 - Quoted prices are available in active markets for identical assets or liabilities;

Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable;

Level 3 - Unobservable pricing inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing an asset or liability.

For items carried at (or adjusted to) fair value in the consolidated financial statements, the following tables summarize the fair value of these instruments at January 31, 2026 and February 1, 2025:

January 31, 2026 Fair Value Measurements Using


		Quoted Prices in								****
		Active Markets								****
		for Identical			Significant Other					****
		Assets			Observable Inputs					****
		(Level 1)			(Level 2)			Total		****
Marketable Securities		$	244		$	—		$	244
Commodity Contracts			—			1			1
Total		$	244		$	1		$	245

February 1, 2025 Fair Value Measurements Using


		Quoted Prices in								****
		Active Markets								****
		for Identical			Significant Other					****
		Assets			Observable Inputs					****
		(Level 1)			(Level 2)			Total		****
Marketable Securities		$	274		$	—		$	274
Commodity Contracts			—			(1)			(1)
Total		$	274		$	(1)		$	273

The Company values interest rate hedges using observable forward yield curves. These forward yield curves are classified as Level 2 inputs.

Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the impairment analysis of goodwill, other intangible assets, long-lived assets and in the valuation of store lease exit costs. The Company reviews goodwill and indefinite-lived intangible assets for impairment annually, during the fourth quarter of each fiscal year, and as circumstances indicate the possibility of impairment. See Note 2 for further discussion related to the Company’s carrying value of goodwill. As of January 31, 2026, the Company classified a certain subsidiary as held for sale. This subsidiary is reported at the lower of its carrying value or fair value less cost to sell, which is determined using Level 3 inputs. In 2025, assets held for sale with a carrying amount of $275 were written down to their fair value of $225, resulting in impairment of intangible assets of $50, $34 net of tax. In 2025, long-lived assets with a carrying amount of $212 were written down to their fair value of $75, resulting in an impairment charge of $137, which includes store closure costs of $100, $77 net of tax, related to the planned closing of approximately 60 stores. Additionally, the Company recorded charges of $2,497, $1,908 net of tax, related to our fulfillment network not meeting operational or financial expectations, the planned closing of three automated fulfillment facilities and the cancellation of a planned site (see Note 19 for additional details). In 2024, long-lived assets with a carrying amount of $229 were written down to their fair value of $131, resulting in an impairment charge of $98, which includes $25, $19 net of tax, for property losses. Long-lived assets and store lease exit costs were measured at fair value on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy. See Note 1 for further discussion of the Company’s policies for impairments of long-lived assets and valuation of store lease exit costs.

Fair Value of Other Financial Instruments

Current and Long-term Debt

The fair value of the Company’s long-term debt, including current maturities, was estimated using Level 2 inputs based on the quoted market prices for the same or similar issues adjusted for illiquidity based on available market evidence. If quoted market prices were not available, the fair value was based upon the net present value of the future cash flow using the forward interest rate yield curve in effect at respective year-ends. At January 31, 2026, the fair value of total debt excluding obligations under finance leases was $14,975 compared to a carrying value of $15,875. At February 1, 2025, the fair value of total debt excluding obligations under finance leases was $14,648 compared to a carrying value of $15,909.

Cash and Temporary Cash Investments, Store Deposits In-Transit, Receivables, Prepaid and Other Current Assets, Accounts Payable, Accrued Salaries and Wages and Other Current Liabilities

The carrying amounts of these items approximated fair value due to their short-term nature.

Other Assets

The fair value of certain financial instruments, measured using Level 1 inputs, was $142 and $183 as of January 31, 2026 and February 1, 2025, respectively, and is included in “Other assets” in the Company’s Consolidated Balance Sheets. The unrealized loss for these Level 1 investments was approximately $41 and $116 for 2025 and 2024, respectively, and is included in “(Loss) gain on investments” in the Company’s Consolidated Statements of Operations.

In 2024, the Company fully exited its position in a Level 1 equity investment, receiving proceeds totaling approximately $303, resulting in a realized gain of $23, which is included in “(Loss) gain on investments” in the Company’s Consolidated Statements of Operations.

The Company held other equity investments without a readily determinable fair value. These investments are measured initially at cost and remeasured for observable price changes to fair value through net earnings. The value of these investments was $105 and $96 as of January 31, 2026 and February 1, 2025, respectively, and is included in “Other assets” in the Company’s Consolidated Balance Sheets. There were no material observable price changes or impairments for these investments without a readily determinable fair value during 2025 or 2024, and as such, they are excluded from the fair value measurements table above for January 31, 2026 and February 1, 2025.

The following table presents the Company’s remaining other assets as of January 31, 2026 and February 1, 2025:


		January 31, 2026			February 1, 2025
Other Assets
Equity method and other long-term investments		$	319		$	314
Notes receivable			82			75
Prepaid deposits under certain contractual arrangements^(1)^			—			201
Implementation costs related to cloud computing arrangements			246			270
Funded asset status of pension plans			43			24
Other			166			130
Total		$	856		$	1,014
(1)	The Company recorded impairment and related charges related to the Company’s automated fulfillment network (see Note 19 for additional details). Due to this impairment, there are no remaining prepaid deposits under certain contractual arrangements as of January 31, 2026.
---	---

8.	ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table represents the changes in AOCI by component for the years ended January 31, 2026 and February 1, 2025:


					Pension and
		Cash Flow			Postretirement
		Hedging			Defined Benefit
		Activities^(1)^			Plans^(1)^			Total^(1)^
Balance at February 3, 2024		$	60		$	(549)		$	(489)
OCI before reclassifications^(2)^			(103)			(33)		****	(136)
Amounts reclassified out of AOCI^(3)^			8		****	(4)		****	4
Net current-period OCI			(95)		****	(37)		****	(132)
Balance at February 1, 2025		$	(35)		$	(586)		$	(621)

Balance at February 1, 2025		$	(35)		$	(586)		$	(621)
OCI before reclassifications^(2)^			3			(28)			(25)
Amounts reclassified out of AOCI^(3)^			8			3			11
Net current-period OCI			11			(25)			(14)
Balance at January 31, 2026		$	(24)		$	(611)		$	(635)
(1)	All amounts are net of tax.
---	---
(2)	Net of tax of $(10) and $(31) for pension and postretirement defined benefit plans and cash flow hedging activities, respectively, as of February 1, 2025. Net of tax of $(8) for pension and postretirement defined benefit as of January 31, 2026.
---	---
(3)	Net of tax of $(1) and $1 for pension and postretirement defined benefit plans and cash flow hedging activities, respectively, as of February 1, 2025. Net of tax of $1 and $2 for pension and postretirement defined benefit plans and cash flow hedging activities, respectively, as of January 31, 2026.
---	---

The following table represents the items reclassified out of AOCI and the related tax effects for the years ended January 31, 2026, February 1, 2025 and February 3, 2024:


		****	For the year ended			For the year ended			For the year ended
		****	January 31, 2026			February 1, 2025			February 3, 2024		****

Cash flow hedging activity items:
Amortization of gains and losses on cash flow hedging activities^(1)^			$	10		$	9		$	8
Tax expense				(2)			(1)			(2)
Net of tax				8			8			6

Pension and postretirement defined benefit plan items:
Amortization of amounts included in net periodic pension cost^(2)^				4			(5)			(14)
Tax expense				(1)			1			3
Net of tax				3			(4)			(11)
Total reclassifications, net of tax			$	11		$	4		$	(5)
(1)	Reclassified from AOCI into interest expense.
---	---
(2)	Reclassified from AOCI into non-service component of company-sponsored pension plan costs. These components are included in the computation of net periodic pension expense.
---	---

9.	LEASES AND LEASE-FINANCED TRANSACTIONS

The Company leases certain store real estate, warehouses, distribution centers, fulfillment centers, office space and equipment. The Company operates in leased facilities in approximately half of its store locations, with lease terms that generally range from 10 to 20 years, and options to renew for varying terms at the Company’s sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases include escalation clauses and/or payment of executory costs such as property taxes, utilities or insurance and maintenance. Rent expense for leases with escalation clauses or other lease concessions are accounted for on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Certain properties or portions thereof are subleased to others for periods generally ranging from one to 20 years.

The following table provides supplemental balance sheet classification information related to leases:


				January 31,			February 1,
		Classification		2026			2025
Assets
Operating		Operating lease assets		$	6,682		$	6,839
Finance		Property, plant and equipment, net^(1)(2)^			910			1,917

Total leased assets				$	7,592		$	8,756

Liabilities
Current
Operating		Current portion of operating lease liabilities		$	665		$	599
Finance		Current portion of long-term debt including obligations under finance leases^(3)^			436			168

Noncurrent
Operating		Noncurrent operating lease liabilities			6,461			6,578
Finance		Long-term debt including obligations under finance leases^(3)^			1,255			1,828

Total lease liabilities				$	8,817		$	9,173
(1)	Finance lease assets are recorded net of accumulated amortization of $1,038 and $915 as of January 31, 2026 and February 1, 2025, respectively.
---	---
(2)	In 2025, the Company recorded impairment and related charges related to the Company’s automated fulfillment network (see Note 19 for additional details). Due to this impairment, the Company did not have any net finance lease assets as of January 31, 2026 related to the automated fulfillment network.
---	---
(3)	The total finance lease liabilities decreased primarily due to the cash termination payment to Ocado of approximately $350 for the closure and cancellation of certain fulfillment centers (see Note 19 for additional details).
---	---

The following table provides the components of lease cost:


				Year-To-Date			Year-To-Date
Lease Cost		Classification		January 31, 2026			February 1, 2025
Operating lease cost^(1)^		Rent Expense		$	980		$	988
Sublease and other rental income		Rent Expense			(108)			(111)
Finance lease cost
Amortization of leased assets		Depreciation and Amortization			190			203
Interest on lease liabilities		Interest Expense			89			84

Net lease cost				$	1,151		$	1,164
(1)	Includes short-term leases and variable lease costs, which are immaterial.
---	---

Maturities of operating and finance lease liabilities are listed below. Amounts in the table include options to extend lease terms that are reasonably certain of being exercised.


		Operating		Finance
		Leases		Leases		Total
2026		$	962	$	482	$	1,444
2027			914		165		1,079
2028			852		165		1,017
2029			792		157		949
2030			742		149		891
Thereafter			5,859		1,080		6,939

Total lease payments			10,121		2,198	$	12,319

Less amount representing interest			2,995		507

Present value of lease liabilities^(1)^		$	7,126	$	1,691
(1)	Includes the current portion of $665 for operating leases and $436 for finance leases.
---	---

Total future minimum rentals under non-cancellable subleases at January 31, 2026 were $226.

The following table provides the weighted-average lease term and discount rate for operating and finance leases:


	January 31, 2026		February 1, 2025
Weighted-average remaining lease term (years)
Operating leases	13.7		13.7
Finance leases	11.8		11.5
Weighted-average discount rate
Operating leases	4.8	%	4.6	%
Finance leases	4.0	%	4.7	%

The following table provides supplemental cash flow information related to leases:


	Year-To-Date		Year-To-Date
	January 31, 2026		February 1, 2025
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	855	$	916
Operating cash flows from finance leases	$	89	$	84
Financing cash flows from finance leases^(1)^	$	415	$	168
Leased assets obtained in exchange for new operating lease liabilities	$	537	$	786
Leased assets obtained in exchange for new finance lease liabilities	$	197	$	157
Net gain recognized from sale and leaseback transactions^(2)^	$	—	$	39
Impairment of operating lease assets	$	52	$	13
Impairment of finance lease assets^(3)^	$	954	$	—
(1)	In 2025, financing cash flows from finance leases includes cash termination payment of $246 made to Ocado for the closure and cancellation of certain fulfillment centers.
---	---
(2)	In 2025, the Company entered into sale leaseback transactions related to two properties, which resulted in total proceeds of $30. In 2024, the Company entered into sale leaseback transactions related to five properties, which resulted in total proceeds of $52.
---	---
(3)	In 2025, impairment of finance lease assets includes $948 related to the Company’s automated fulfillment network (see Note 19 for additional details).
---	---

On May 17, 2018, the Company entered into a Partnership Framework Agreement with Ocado International Holdings Limited and Ocado Group plc (“Ocado”), which has since been amended and restated. In accordance with GAAP, the Company determined the arrangement with Ocado contains a lease of the robotic equipment used to fulfill customer orders. The Company elected to combine the lease and non-lease elements in the contract. As a result, the Company will account for all payments to Ocado as lease payments. During the second quarter of 2025, Ocado drew down the entire remaining $152 from its letter of credit under the Amended and Restated Partnership Framework Agreement. The Company recorded finance lease assets of $23 for the portion of the payment allocated to commenced leases. The remaining payment amount was treated as prepaid rent and was recorded in “Other assets” in the Company’s Consolidated Balance Sheet and in “Other” within “Cash Flows from Investing Activities” in the Company’s Consolidated Statement of Cash Flows. As of February 1, 2025, the Company had $926 of net finance lease assets included within “Property, plant and equipment, net” in the Company’s Consolidated Balance Sheets related to the Company's agreement with Ocado. In 2025, the Company recorded impairment and related charges related to the Company’s automated fulfillment network (see Note 19 for additional details). Due to this impairment, the Company did not have any net finance lease assets as of January 31, 2026. As of January 31, 2026 and February 1, 2025, the Company had $342 and $104, respectively, of current finance lease liabilities recorded within “Current portion of long-term debt including obligations under finance leases" and $243 and $781, respectively, of non-current finance lease liabilities recorded within “Long-term debt including obligations under finance leases” in the Company’s Consolidated Balance Sheets. The total finance lease liabilities decreased primarily due to the cash termination payment to Ocado of approximately $350 for the closure and cancellation of certain fulfillment centers. The $350 payment was recorded as “Payments on long-term debt including obligations under finance leases” within “Cash Flows from Financing Activities” and “Other” within “Cash Flows from Operating Activities” in the Company’s Consolidated Statement of Cash Flows for $246 and $104, respectively.

10.	EARNINGS PER COMMON SHARE

Net earnings attributable to The Kroger Co. per basic common share equals net earnings attributable to The Kroger Co. less income allocated to participating securities divided by the weighted average number of common shares outstanding. Net earnings attributable to The Kroger Co. per diluted common share equals net earnings attributable to The Kroger Co. less income allocated to participating securities divided by the weighted average number of common shares outstanding, after giving effect to dilutive stock options. The following table provides a reconciliation of net earnings attributable to The Kroger Co. and shares used in calculating net earnings attributable to The Kroger Co. per basic common share to those used in calculating net earnings attributable to The Kroger Co. per diluted common share:


		For the year ended								For the year ended								For the year ended							****
		January 31, 2026								February 1, 2025								February 3, 2024							****
							Per								Per								Per		****
		Earnings			Shares		Share			Earnings			Shares		Share			Earnings			Shares		Share		****
(in millions, except per share amounts)		(Numerator)			(Denominator)		Amount			(Numerator)			(Denominator)		Amount			(Numerator)			(Denominator)		Amount		****
Net earnings attributable to The Kroger Co. per basic common share		$	1,009		652		$	1.55		$	2,645		715		$	3.70		$	2,146		718		$	2.99
Dilutive effect of stock options					3								5								7

Net earnings attributable to The Kroger Co. per diluted common share		$	1,009		655		$	1.54		$	2,645		720		$	3.67		$	2,146		725		$	2.96

The Company had combined undistributed and distributed earnings to participating securities totaling $7, $20 and $18 in 2025, 2024 and 2023, respectively.

The Company had stock options outstanding for approximately 1.3 million, 2.9 million and 2.8 million shares, respectively, for the years ended January 31, 2026, February 1, 2025 and February 3, 2024, which were excluded from the computations of net earnings per diluted common share because their inclusion would have had an anti-dilutive effect on net earnings per diluted share.

11.	STOCK-BASED COMPENSATION

The Company recognizes compensation expense for all share-based payments granted. The Company recognizes share-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award based on the fair value at the date of the grant.

The Company grants stock options to employees under various plans at an option price equal to the fair market value of the underlying shares on the grant date of the award. The Company accounts for stock options under the fair value recognition provisions. Stock options typically expire 10 years from the date of grant. Stock options vest between one and four years from the date of grant.

In addition to the stock options described above, the Company awards restricted stock to employees and incentive shares to nonemployee directors under various plans. The restrictions on the restricted share awards generally lapse between one and four years from the date of the awards. The Company determines the fair value for restricted stock awards in an amount equal to the fair market value of the underlying shares on the grant date of the award.

At January 31, 2026, approximately 23 million common shares were available for future options or restricted stock grants under the 2019 Amended and Restated Long-Term Incentive Plan. Stock options granted reduce the shares available under the Plans at a ratio of one to one. Restricted stock grants reduce the shares available under the Plans at a ratio of 2.83 to one.

Equity awards granted are based on the aggregate value of the award on the grant date. This can affect the number of shares granted in a given year as equity awards. Excess tax benefits related to equity awards are recognized in the provision for income taxes. Equity awards may be approved at one of four meetings of its Board of Directors occurring shortly after the Company’s release of quarterly earnings. The 2025 primary grants were made in conjunction with the March and June meetings of the Company’s Board of Directors.

All awards become immediately exercisable upon certain changes of control of the Company.

Stock Options

Changes in stock options outstanding under the stock option plans are summarized below:


		Shares		Weighted-		****
		subject		average		****
		to option		exercise		****
		(in millions)		price		****
Outstanding, year-end 2022		16.6		$	30.81
Granted		1.3		$	47.23
Exercised		(2.4)		$	24.04
Canceled or Forfeited		(0.1)		$	39.54

Outstanding, year-end 2023		15.4		$	33.11
Granted		1.2		$	55.50
Exercised		(4.6)		$	29.75
Canceled or Forfeited		(0.4)		$	45.79

Outstanding, year-end 2024		11.6		$	36.25
Granted		0.8		$	66.34
Exercised		(5.7)		$	31.69
Canceled or Forfeited		(0.7)		$	52.54

Outstanding, year-end 2025		6.0		$	43.03

A summary of stock options outstanding, exercisable and expected to vest at January 31, 2026 follows:


		Weighted-average			Aggregate		****
		remaining	Weighted-average		intrinsic		****
	Number of shares	contractual life	exercise price		value		****
	(in millions)	(in years)			(in millions)
Stock options Outstanding	6.0	5.21	$	43.03	$	122
Stock options Exercisable	4.0	3.83	$	35.71	$	110
Stock options Expected to Vest	1.9	7.98	$	57.73	$	12

Restricted stock

Changes in restricted stock outstanding under the restricted stock plans are summarized below:


		Restricted				****
		shares		Weighted-average		****
		outstanding		grant-date		****
		(in millions)		fair value		****
Outstanding, year-end 2022		5.8		$	41.76
Granted		3.5		$	47.06
Lapsed		(3.1)		$	40.37
Canceled or Forfeited		(0.3)		$	45.32

Outstanding, year-end 2023		5.9		$	45.49
Granted		3.2		$	53.29
Lapsed		(3.2)		$	44.22
Canceled or Forfeited		(0.5)		$	48.76

Outstanding, year-end 2024		5.4		$	50.58
Granted		2.4		$	69.46
Lapsed		(2.9)		$	50.05
Canceled or Forfeited		(0.8)		$	55.39

Outstanding, year-end 2025		4.1		$	61.36

The weighted-average grant date fair value of stock options granted during 2025, 2024 and 2023 was $20.28, $17.05 and $15.17, respectively. The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option-pricing model, based on the assumptions shown in the table below. The Black-Scholes model utilizes accounting judgment and financial estimates, including the term option holders are expected to retain their stock options before exercising them, the volatility of the Company’s share price over that expected term, the dividend yield over the term and the number of awards expected to be forfeited before they vest. Using alternative assumptions in the calculation of fair value would produce fair values for stock option grants that could be different than those used to record stock-based compensation expense in the Consolidated Statements of Operations. The increase in the fair value of the stock options granted during 2025, compared to 2024, resulted primarily from the increase in the Company’s share price and the decrease of the expected dividend yield. The increase in the fair value of the stock options granted during 2024, compared to 2023, resulted primarily from the increase in the Company’s share price, partially offset by the increase in the expected dividend yield.

The following table reflects the weighted-average assumptions used for grants awarded to option holders:


		2025		2024		2023	****
Weighted average expected volatility		28.91	%	30.63	%	31.14	%
Weighted average risk-free interest rate		4.21	%	4.20	%	4.09	%
Expected dividend yield		2.09	%	2.31	%	2.11	%
Expected term (based on historical results)		7.1	years	7.1	years	7.1	years

The weighted-average risk-free interest rate was based on the yield of a treasury note as of the grant date, continuously compounded, which matures at a date that approximates the expected term of the stock options. The dividend yield was based on the Company’s history and expectation of dividend payouts. Expected volatility was determined based upon historical stock volatilities; however, implied volatility was also considered. Expected term was determined based upon historical exercise and cancellation experience.

Total stock compensation recognized in 2025, 2024 and 2023 was $157, $175 and $172, respectively. Stock option compensation recognized in 2025, 2024 and 2023 was $8, $15 and $17, respectively. Restricted shares compensation recognized in 2025, 2024 and 2023 was $149, $160 and $155, respectively.

The total intrinsic value of stock options exercised was $207, $117 and $55 in 2025, 2024 and 2023, respectively. The total amount of cash received by the Company was $182, $127 and $50 in 2025, 2024 and 2023, respectively, from the exercise of stock options granted under share-based payment arrangements. As of January 31, 2026, there was $201 of total unrecognized compensation expense remaining related to non-vested share-based compensation arrangements granted under the Plans. This cost is expected to be recognized over a weighted-average period of approximately two years. The total fair value of stock options that vested was $14, $16 and $16 in 2025, 2024 and 2023, respectively.

Shares issued as a result of stock option exercises may be newly issued shares or reissued treasury shares. Proceeds received from the exercise of stock options, and the related tax benefit, may be utilized to repurchase the Company’s common shares under a stock repurchase program adopted by the Company’s Board of Directors. During 2025, the Company repurchased approximately three million common shares in such a manner.

12.	COMMITMENTS AND CONTINGENCIES

The Company continuously evaluates contingencies based upon the best available evidence.

The Company believes that allowances for loss have been provided to the extent necessary and that its assessment of contingencies is reasonable. To the extent that resolution of contingencies results in amounts that vary from the Company’s estimates, future earnings will be charged or credited.

The principal contingencies are described below:

Insurance — The Company’s workers’ compensation risks are self-insured in most states. In addition, other workers’ compensation risks and certain levels of insured general liability risks are based on retrospective premium plans, deductible plans and self-insured retention plans. The liability for workers’ compensation risks is accounted for on a present value basis. Actual claim settlements and expenses incident thereto may differ from the provisions for loss. Property risks have been underwritten by a subsidiary and are all reinsured with unrelated insurance companies. Operating divisions and subsidiaries have paid premiums, and the insurance subsidiary has provided loss allowances, based upon actuarially determined estimates.

Litigation — Various claims and lawsuits arising in the normal course of business, including personal injury, contract disputes, employment discrimination, wage and hour and other regulatory claims are pending against the Company. Some of these suits purport or have been determined to be class actions and/or seek substantial damages. Although it is not possible at this time to evaluate the merits of all of these claims and lawsuits, nor their likelihood of success, the Company is of the belief that any resulting liability will not have a material effect on the Company’s financial position, results of operations, or cash flows.

The Company continually evaluates its exposure to loss contingencies arising from pending or threatened litigation and believes it has made provisions where it is reasonably possible to estimate and when an adverse outcome is probable. Nonetheless, assessing and predicting the outcomes of these matters involves substantial uncertainties. Management currently believes that the aggregate range of loss for the Company’s exposure is not material to the Company. It remains possible that despite management’s current belief, material differences in actual outcomes or changes in management’s evaluation or predictions could arise that could have a material adverse effect on the Company’s financial condition, results of operations, or cash flows.

Opioids

The Company is one of dozens of companies that have been named in various lawsuits alleging that defendants contributed to create a public nuisance through the distribution and dispensing of opioids.

On September 8, 2023, the Company announced that it reached an agreement in principle with plaintiffs to settle the majority of opioid claims that have been or could be brought against Kroger by states in which it operates, subdivisions, and Native American tribes. Along with the execution of certain non-monetary conditions, the Company agreed to pay up to $1,200 to states and subdivisions and $36 to Native American tribes in funding for abatement efforts, and approximately $177 to cover attorneys’ fees and costs. The exact payment amount will depend on several factors, including the extent to which states take action to foreclose opioid lawsuits by political subdivisions (e.g., by passing laws barring or limiting opioid lawsuits by political subdivisions), and the extent to which additional political subdivisions in participating states file additional opioid lawsuits against the Company. The settlement provides for the full resolution of all claims on behalf of participating states, subdivisions and Native American tribes and is not an admission of any wrongdoing or liability. Certain opioid-related cases against the Company will remain pending in the multidistrict litigation and in various state courts, including those brought by non-participating states and subdivisions and private parties such as hospitals and third-party payors. The Company continues to defend these cases.

As a result, the Company concluded that the agreement in principle for the settlement of opioid claims was probable, and for which the related loss was reasonably estimable. Accordingly, in 2023, the Company recognized opioid settlement charges of $1,413, $1,113 net of tax, relating to the nationwide opioid settlement framework. This charge was included in “Operating, general and administrative” in the Company’s Consolidated Statement of Operations.

The agreement described above includes payments of approximately $1,236 and $177, in equal installments over 11 years and 6 years, respectively. In 2024, the Company made its first annual payment for $138 into an escrow account, which was recorded in “Prepaid and other current assets” in the Company’s Consolidated Balance Sheets. This escrow payment was recorded in “Prepaid and other current assets” within “Changes in operating assets and liabilities” in the Company’s Consolidated Statement of Cash Flows. This payment was subsequently released from escrow on February 20, 2025.

In 2024, certain states and subdivisions confirmed their participation or lack of participation in the agreement described above, which resulted in immaterial changes to the settlement amount and timing of payments. On October 31, 2024, the Company determined that there is sufficient participation in the settlement by states and subdivisions and elected to proceed with the settlement. The settlement with states and subdivisions became effective on December 30, 2024, and the settlement with Native American tribes became effective on September 26, 2025. The Company also entered into and finalized separate agreements with certain states and their subdivisions in 2024 and 2025 that resulted in immaterial changes to the settlement amount and timing of payments.

In 2023, the Company recorded a charge of $62 relating to a settlement of opioid litigation claims with the State of West Virginia. The agreed upon settlement framework resolves all opioid lawsuits and claims by the West Virginia Attorney General.

The Company made payments of $167 for the year ended January 31, 2026. These payments were recorded in “Other” within “Changes in operating assets and liabilities” in the Company’s Consolidated Statement of Cash Flows. As of January 31, 2026, the Company recorded $132 and $981 of the estimated settlement liability in “Other current liabilities” and “Other long-term liabilities,” respectively, in the Company’s Consolidated Balance Sheets related to these opioid settlements. As of February 1, 2025, the Company recorded $279 and $1,139 of the estimated settlement liability in “Other current liabilities” and “Other long-term liabilities,” respectively, in the Company’s Consolidated Balance Sheets related to these opioid settlements.

The foregoing settlements are not admissions of wrongdoing or liability by the Company and the Company will continue to vigorously defend against any other claims and lawsuits relating to opioids that the settlements do not resolve, including private plaintiff litigation. The Company continues to believe it has strong legal defenses and appellate arguments in those cases.

Because of the many uncertainties associated with any settlement arrangement or other resolution of opioid-related litigation matters, and because the Company continues to actively defend ongoing litigation for which it believes it has defenses and assertions that have merit, the Company is not able to reasonably estimate the range of ultimate possible loss for all opioid-related litigation matters at this time.

Assignments — The Company is contingently liable for leases that have been assigned to various third parties in connection with facility closings and dispositions. The Company could be required to satisfy the obligations under the leases if any of the assignees are unable to fulfill its lease obligations. Due to the wide distribution of the Company’s assignments among third parties, and various other remedies available, the Company believes the likelihood that it will be required to assume a material amount of these obligations is remote.

13.	STOCK

Preferred Shares

The Company has authorized five million shares of voting cumulative preferred shares; two million shares were available for issuance at January 31, 2026. The shares have a par value of $100 per share and are issuable in series.

Common Shares

The Company has authorized two billion common shares, $1 par value per share.

Common Stock Repurchase Program

On December 23, 2025, the Company announced a $2,000 share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, including accelerated stock repurchase (“ASR”) transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “December 2025 Repurchase Program”).

On December 11, 2024, the Company announced a $7,500 share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, including ASR transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “December 2024 Repurchase Program”).

On December 6, 1999, the Company announced a program to repurchase common shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith (“1999 Repurchase Program”). The 1999 Repurchase Program is solely funded by proceeds from stock option exercises, and the tax benefit from these exercises.

On December 19, 2024, the Company entered into an ASR agreement with two financial institutions to reacquire, in aggregate, $5,000 in shares of Kroger common stock. During 2024, the Company funded $5,000 and received a $4,000 initial delivery of approximately 65.6 million shares of Kroger common stock at an average price of $61.54 per share, which includes excise tax on the shares repurchased. Final settlement under the ASR agreement occurred during the third quarter of 2025. In total, the Company invested $5,000 to repurchase 75.6 million shares of Kroger common stock at an average price of $66.68 per share, which includes excise tax on the shares repurchased. The ASR agreement was completed under the December 2024 Repurchase Program.

During 2025, the Company invested $2,723 to repurchase 41.8 million shares of Kroger common stock at an average price of $65.21 per share, which includes excise tax on the shares repurchased. These shares were reacquired under the December 2024 Repurchase Program and the 1999 Repurchase Program. In addition, the final delivery under the ASR agreement occurred during the third quarter of 2025, which included the settlement of 10.0 million shares of Kroger common stock. During 2024, the Company invested $4,194 to repurchase 68.4 million shares of Kroger common stock at an average price of $61.31 per share, which includes excise tax on the shares repurchased. These shares were reacquired under the December 2024 Repurchase Program and the 1999 Repurchase Program. During 2023, the Company invested $62 to repurchase 1.3 million shares of Kroger common stock at an average price of $46.98 per share. These shares were reacquired under the 1999 Repurchase Program.

14.	COMPANY- SPONSORED BENEFIT PLANS

The Company administers non-contributory defined benefit retirement plans for some non-union employees and union-represented employees as determined by the terms and conditions of collective bargaining agreements. These include several qualified pension plans (the “Qualified Plans”) and non-qualified pension plans (the “Non-Qualified Plans”). The Non-Qualified Plans pay benefits to any employee that earns in excess of the maximum allowed for the Qualified Plans by Section 415 of the Internal Revenue Code. The Company only funds obligations under the Qualified Plans. Funding for the company-sponsored pension plans is based on a review of the specific requirements and on evaluation of the assets and liabilities of each plan.

In addition to providing pension benefits, the Company provides certain health care benefits for retired employees. Based on an employee’s age, years of service and position with the Company, the employee may be eligible for retiree health care benefits. Funding of retiree health care benefits occurs as claims or premiums are paid.

The Company recognizes the funded status of its retirement plans on the Consolidated Balance Sheets. Actuarial gains or losses and prior service credits that have not yet been recognized as part of net periodic benefit cost are required to be recorded as a component of AOCI. The Company has elected to measure defined benefit plan assets and obligations as of January 31, which is the month-end that is closest to its fiscal year-ends.

Amounts recognized in AOCI as of January 31, 2026 and February 1, 2025 consist of the following (pre-tax):


		Pension Benefits						Other Benefits						Total					****
		2025			2024			2025			2024			2025			2024		****
Net actuarial loss (gain)		$	846		$	850		$	(45)		$	(79)		$	801		$	771
Prior service credit			—			—			(8)			(10)			(8)			(10)

Total		$	846		$	850		$	(53)		$	(89)		$	793		$	761

Other changes recognized in other comprehensive income (loss) in 2025, 2024 and 2023 were as follows (pre-tax):


		Pension Benefits									Other Benefits									Total								****
		2025			2024			2023			2025			2024			2023			2025			2024			2023		****
Incurred net actuarial loss		$	11		$	42		$	42		$	25		$	—		$	4		$	36		$	42		$	46
Amortization of prior service credit			—			—			—			4			4			11			4			4			11
Amortization of net actuarial (loss) gain			(15)			(9)			(10)			7			10			13			(8)			1			3
Total recognized in other comprehensive income		$	(4)		$	33		$	32		$	36		$	14		$	28		$	32		$	47		$	60

Total recognized in net periodic benefit cost and other comprehensive income		$	14		$	32		$	36		$	40		$	13		$	15		$	54		$	45		$	51

Information with respect to change in benefit obligation, change in plan assets, the funded status of the plans recorded in the Consolidated Balance Sheets, net amounts recognized at the end of fiscal years, weighted-average assumptions and components of net periodic benefit cost follow:


		Pension Benefits																	****
		Qualified Plans						Non-Qualified Plans						Other Benefits					****
		2025			2024			2025			2024			2025			2024		****
Change in benefit obligation:
Benefit obligation at beginning of fiscal year		$	2,250		$	2,368		$	241		$	256		$	167		$	168
Service cost			7			6			—			—			5			4
Interest cost			121			119			13			13			9			9
Plan participants’ contributions			3			3			—			—			9			9
Actuarial loss (gain)			51			(62)			4			(5)			27			2
Plan settlements			(12)			—			—			(2)			—			—
Benefits paid			(170)			(175)			(21)			(21)			(23)			(23)
Other			(6)			(9)			—			—			(2)			(2)

Benefit obligation at end of fiscal year		$	2,244		$	2,250		$	237		$	241		$	192		$	167

Change in plan assets:
Fair value of plan assets at beginning of fiscal year		$	2,259		$	2,399		$	—		$	—		$	—		$	—
Actual return on plan assets			182			37			—			—			—			—
Employer contributions			—			—			21			23			14			14
Plan participants’ contributions			3			3			—			—			9			9
Plan settlements			(12)			—			—			(2)			—			—
Benefits paid			(170)			(175)			(21)			(21)			(23)			(23)
Other			(6)			(5)			—			—			—			—

Fair value of plan assets at end of fiscal year		$	2,256		$	2,259		$	—		$	—		$	—		$	—
Funded (unfunded) status and net asset and liability recognized at end of fiscal year		$	12		$	9		$	(237)		$	(241)		$	(192)		$	(167)

As of January 31, 2026, other assets and other current liabilities include $42 and $38, respectively, of the net asset and liability recognized for the above benefit plans. As of February 1, 2025, other assets and other current liabilities include $24 and $36, respectively, of the net asset and liability recognized for the above benefit plans. Pension plan assets do not include common shares of The Kroger Co.

The following table outlines the weighted average assumptions associated with pension and other benefit costs for 2025, 2024 and 2023:


		Pension Benefits						Other Benefits					****
Weighted average assumptions		2025		2024		2023		2025		2024		2023	****
Discount rate — Benefit obligation		5.38	%	5.60	%	5.27	%	5.22	%	5.54	%	5.21	%
Discount rate — Net periodic benefit cost		5.60	%	5.27	%	4.90	%	5.54	%	5.21	%	4.86	%
Expected long-term rate of return on plan assets		5.50	%	5.50	%	5.50	%
Rate of compensation increase — Net periodic benefit cost^(1)^		—	%	2.52	%	2.57	%
Rate of compensation increase — Benefit obligation^(2)^		—	%	—	%	2.52	%
Cash Balance plan interest crediting rate		3.80	%	3.30	%	3.30	%
(1)	The Rate of compensation increase – Net periodic benefit cost is not applicable in 2025 due to negotiated plan freezes related to certain union benefits that were accruing in 2024.
---	---
(2)	The Rate of compensation increase – Benefit obligation assumption is not applicable for 2025 and 2024 due to negotiated plan freezes related to certain union benefits that were accruing in 2024.
---	---

The Company’s discount rate assumptions were intended to reflect the rates at which the pension benefits could be effectively settled. They take into account the timing and amount of benefits that would be available under the plans. The Company’s policy is to match the plan’s cash flows to that of a hypothetical bond portfolio whose cash flow from coupons and maturities match the plan’s projected benefit cash flows. The discount rates are the single rates that produce the same present value of cash flows. The selection of the 5.38% and 5.22% discount rates as of year-end 2025 for pension and other benefits, respectively, represents the hypothetical bond portfolio using bonds with an AA or better rating constructed with the assistance of an outside consultant.

The Company’s assumed pension plan investment return rate was 5.50% in 2025, 2024, and 2023. The value of all investments in the company-sponsored defined benefit pension plans during the calendar year ended December 31, 2025, net of investment management fees and expenses, increased 9.0%, and for fiscal year 2025, investments increased 8.4%. Historically, the Company’s pension plans’ average rate of return was 5.0% for the 10 calendar years ended December 31, 2025, net of all investment management fees and expenses. For the past 20 years, the Company’s pension plans’ average annual rate of return has been 5.7%. To determine the expected rate of return on pension plan assets held by the Company, the Company considers current and forecasted plan asset allocations as well as historical and forecasted rates of return on various asset categories.

The Company calculates its expected return on plan assets by using the market-related value of plan assets. The market-related value of plan assets is determined by adjusting the actual fair value of plan assets for gains or losses on plan assets. Gains or losses represent the difference between actual and expected returns on plan investments for each plan year. Gains or losses on plan assets are recognized evenly over a five-year period. Using a different method to calculate the market-related value of plan assets would provide a different expected return on plan assets.

The pension benefit unfunded status decreased in 2025, compared to 2024, primarily due to the qualified plans’ actual return on plan assets being greater than the expected rate of return on plan assets, partially offset by a decrease in discount rates, which increased the benefit obligation. The Company’s Qualified Plans were fully funded as of January 31, 2026 and February 1, 2025.

The following table provides the components of the Company’s net periodic benefit costs for 2025, 2024 and 2023:


		Pension Benefits																										****
		Qualified Plans									Non-Qualified Plans									Other Benefits								****
		2025			2024			2023			2025			2024			2023			2025			2024			2023		****
Components of net periodic benefit cost:
Service cost		$	7		$	6		$	17		$	—		$	—		$	—		$	5		$	4		$	4
Interest cost			121			119			116			13			13			13			9			9			8
Expected return on plan assets			(138)			(148)			(150)			—			—			—			—			—			—
Amortization of:
Prior service credit			—			—			—			—			—			—			(4)			(4)			(11)
Actuarial loss (gain)			10			7			5			2			2			4			(7)			(10)			(13)
Settlement loss recognized			3			—			1			—			—			—			—			—			—
Other			—			—			—			—			—			(2)			1			—			(1)
Net periodic benefit cost		$	3		$	(16)		$	(11)		$	15		$	15		$	15		$	4		$	(1)		$	(13)

The following table provides the projected benefit obligation (“PBO”) and the fair value of plan assets for those company-sponsored pension plans with projected benefit obligations in excess of plan assets:


		Qualified Plans						Non-Qualified Plans					****
		2025			2024			2025			2024		****
PBO at end of fiscal year		$	202		$	196		$	236		$	240
Fair value of plan assets at end of year		$	171		$	180		$	—		$	—

The following table provides the accumulated benefit obligation (“ABO”) and the fair value of plan assets for those company-sponsored pension plans with accumulated benefit obligations in excess of plan assets:


		Qualified Plans						Non-Qualified Plans
		2025			2024			2025			2024
ABO at end of fiscal year		$	202		$	196		$	236		$	240
Fair value of plan assets at end of year		$	171		$	180		$	—		$	—

The following table provides information about the Company’s estimated future benefit payments:


		Pension			Other		****
		Benefits			Benefits		****
2026		$	232		$	14
2027		$	212		$	16
2028		$	211		$	17
2029		$	209		$	18
2030		$	205		$	18
2031 —2035		$	950		$	95

The following table provides information about the target and actual pension plan asset allocations as of January 31, 2026:


				Actual			****
		Target allocations		Allocations			****
		2025		2025		2024	****
Pension plan asset allocation
Global equity securities		5.0	%	6.4	%	6.5	%
Investment grade debt securities		79.5		81.5		79.1
High yield debt securities		3.0		3.7		3.5
Private equity		8.0		5.8		7.5
Hedge funds		3.0		1.6		2.0
Real estate		1.5		1.0		1.4

Total		100.0	%	100.0	%	100.0	%

Investment objectives, policies and strategies are set by the Retirement Benefit Plan Management Committee (the “Committee”). The primary objectives include holding and investing the assets and distributing benefits to participants and beneficiaries of the pension plans. Investment objectives have been established based on a comprehensive review of the capital markets and each underlying plan’s current and projected financial requirements. The time horizon of the investment objectives is long-term in nature and plan assets are managed on a going-concern basis.

Investment objectives and guidelines specifically applicable to each manager of assets are established and reviewed annually. Derivative instruments may be used for specified purposes, including rebalancing exposures to certain asset classes. Any use of derivative instruments for a purpose or in a manner not specifically authorized is prohibited, unless approved in advance by the Committee.

The target allocations shown for 2025 were established at the beginning of 2025 based on the Company’s liability-driven investment (“LDI”) strategy. An LDI strategy focuses on maintaining a close to fully-funded status over the long-term with minimal funded status risk. This is achieved by investing more of the plan assets in fixed income instruments to more closely match the duration of the plan liability.

The Company did not make any significant contributions to its company-sponsored pension plans in 2025, and the Company is not required to make any significant contributions to these plans in 2026. If the Company does make any contributions in 2026, the Company expects these contributions will decrease its required contributions in future years. Among other things, investment performance of plan assets, the interest rates required to be used to calculate the pension obligations and future changes in legislation will determine the amounts of any contributions. The Company expects 2026 net periodic benefit costs for company-sponsored pension plans to be approximately $34.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. The Company used a 7.40% initial health care cost trend rate, which is assumed to decrease on a linear basis to a 4.00% ultimate health care cost trend rate in 2049, to determine its expense.

The following tables, set forth by level within the fair value hierarchy, present the Qualified Plans’ assets at fair value as of January 31, 2026 and February 1, 2025:

Assets at Fair Value as of January 31, 2026


		Quoted Prices in						Significant								****
		Active Markets for			Significant Other			Unobservable			Assets					****
		Identical Assets			Observable Inputs			Inputs			Measured					****
		(Level 1)			(Level 2)			(Level 3)			at NAV			Total		****
Cash and cash equivalents		$	155		$	—		$	—		$	—		$	155
Corporate Stocks			1			—			—			—			1
Corporate Bonds			—			796			—			—			796
U.S. Government Securities			—			158			—			—			158
Mutual Funds			105			—			—			—			105
Collective Trusts			—			—			—			785			785
Hedge Funds			—			—			22			14			36
Private Equity			—			—			—			132			132
Real Estate			—			—			17			5			22
Other			—			66			—			—			66
Total		$	261		$	1,020		$	39		$	936		$	2,256

Assets at Fair Value as of February 1, 2025


		Quoted Prices in						Significant								****
		Active Markets for			Significant Other			Unobservable			Assets					****
		Identical Assets			Observable Inputs			Inputs			Measured					****
		(Level 1)			(Level 2)			(Level 3)			at NAV			Total		****
Cash and cash equivalents		$	129		$	—		$	—		$	—		$	129
Corporate Stocks			2			—			—			—			2
Corporate Bonds			—			847			—			—			847
U.S. Government Securities			—			151			—			—			151
Mutual Funds			92			—			—			—			92
Collective Trusts			—			—			—			737			737
Hedge Funds			—			—			25			20			45
Private Equity			—			—			—			166			166
Real Estate			—			—			20			13			33
Other			—			57			—			—			57
Total		$	223		$	1,055		$	45		$	936		$	2,259

Certain investments that are measured at fair value using the NAV per share (or its equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented for these investments in the preceding tables are intended to permit reconciliation of the fair value hierarchies to the total fair value of plan assets.

For measurements using significant unobservable inputs (Level 3) during 2025 and 2024, a reconciliation of the beginning and ending balances is as follows:


		Hedge Funds			Real Estate
Ending balance, February 3, 2024		$	29		$	24
Contributions into fund			—			2
Realized gains (losses)			2			(4)
Unrealized (losses) gains			(1)			2
Distributions			(5)			(4)

Ending balance, February 1, 2025			25			20
Realized losses			—			(1)
Unrealized gains			2			1
Distributions			(5)			(3)

Ending balance, January 31, 2026		$	22		$	17

See Note 7 for a discussion of the levels of the fair value hierarchy. The assets’ fair value measurement level above is based on the lowest level of any input that is significant to the fair value measurement.

The following is a description of the valuation methods used for the Qualified Plans’ assets measured at fair value in the above tables:

●	Cash and cash equivalents: The carrying value approximates fair value.

●	Corporate Stocks: The fair values of these securities are based on observable market quotations for identical assets and are valued at the closing price reported on the active market on which the individual securities are traded.

●

Corporate Bonds: The fair values of these securities are primarily based on observable market quotations for similar bonds, valued at the closing price reported on the active market on which the individual securities are traded. When such quoted prices are not available, the bonds are valued using a discounted cash flow approach using current yields on similar instruments of issuers with similar credit ratings, including adjustments for certain risks that may not be observable, such as credit and liquidity risks.

●

U.S. Government Securities: Certain U.S. Government securities are valued at the closing price reported in the active market in which the security is traded. Other U.S. government securities are valued based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for similar securities, the security is valued under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable, such as credit and liquidity risks.

●	Mutual Funds: The fair values of these securities are based on observable market quotations for identical assets and are valued at the closing price reported on the active market on which the individual securities are traded.

●	Collective Trusts: The collective trust funds are public investment vehicles valued using a Net Asset Value (“NAV”) provided by the manager of each fund. These assets have been valued using NAV as a practical expedient.

●

Hedge Funds: The Hedge funds classified as Level 3 include investments that are not readily tradeable and have valuations that are not based on readily observable data inputs. The fair value of these assets is estimated based on information provided by the fund managers or the general partners. Therefore, these assets are classified as Level 3. Certain other hedge funds are private investment vehicles valued using a NAV provided by the manager of each fund. These assets have been valued using NAV as a practical expedient.

●

Private Equity: Private Equity investments are valued based on the fair value of the underlying securities within the fund, which include investments both traded on an active market and not traded on an active market. For those investments that are traded on an active market, the values are based on the closing price reported on the active market on which those individual securities are traded. For investments not traded on an active market, or for which a quoted price is not publicly available, a variety of unobservable valuation methodologies, including discounted cash flow, market multiple and cost valuation approaches, are employed by the fund manager to value investments. Fair values of all investments are adjusted annually, if necessary, based on audits of the private equity fund financial statements; such adjustments are reflected in the fair value of the plan’s assets.

●

Real Estate: Real estate investments include investments in real estate funds managed by a fund manager. These investments are valued using a variety of unobservable valuation methodologies, including discounted cash flow, market multiple and cost valuation approaches. The valuations for these investments are not based on readily observable inputs and are classified as Level 3 investments. Certain other real estate investments are valued using a NAV provided by the manager of each fund. These assets have been valued using NAV as a practical expedient.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement.

The Company contributed and expensed $318, $328 and $322 to employee 401(k) retirement savings accounts in 2025, 2024 and 2023, respectively. The 401(k) retirement savings account plans provide to eligible employees both matching contributions and automatic contributions from the Company based on participant contributions, compensation as defined by the plan and length of service.

15.	MULTI-EMPLOYER PENSION PLANS

The Company contributes to various multi-employer pension plans based on obligations arising from collective bargaining agreements. These multi-employer pension plans provide retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Trustees are appointed in equal number by employers and unions. The trustees typically are responsible for determining the level of benefits to be provided to participants as well as for such matters as the investment of the assets and the administration of the plans.

The Company recognizes expense in connection with these plans as contributions are funded or when commitments are probable and reasonably estimable, in accordance with GAAP. The Company made cash contributions to these plans of $496 in 2025, $398 in 2024 and $635 in 2023. The increase in 2025, compared to 2024, is due to an increase in required contributions to the UFCW Consolidated Pension Plan, primarily due to the exhaustion of prefunding credits that originated from incremental contributions we made to this plan in prior years. The decrease in 2024, compared to 2023, is due to the fulfillment of contractually obligated payments related to the Company’s commitments established when restructuring the United Food and Commercial Workers (“UFCW”) International Union-Industry Variable Annuity Pension Plan agreement.

The Company continues to evaluate and address potential exposure to under-funded multi-employer pension plans as it relates to the Company’s associates who are beneficiaries of these plans. These under-fundings are not a liability of the Company. When an opportunity arises that is economically feasible and beneficial to the Company and its associates, the Company may negotiate the restructuring of under-funded multi-employer pension plan obligations to help stabilize associates’ future benefits and become the fiduciary of the assets of the restructured multi-employer pension plan. The Company is currently designated as the named fiduciary of the UFCW Consolidated Pension Plan and the International Brotherhood of Teamsters (“IBT”) Consolidated Pension Fund and has sole investment authority over these assets. The commitments from these restructurings do not change the Company’s debt profile as it relates to its credit rating since these off-balance sheet commitments are typically considered in the Company’s investment grade debt rating.

The risks of participating in multi-employer pension plans are different from the risks of participating in single-employer pension plans in the following respects:

●	Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.

●	If a participating employer stops contributing to the plan, the unfunded obligations of the plan allocable to such withdrawing employer may be borne by the remaining participating employers.

●	If the Company stops participating in some of its multi-employer pension plans, the Company may be required to pay those plans an amount based on its allocable share of the unfunded vested benefits of the plan, referred to as a withdrawal liability.

The Company’s participation in multi-employer plans is outlined in the following tables. The EIN / Pension Plan Number column provides the Employer Identification Number (“EIN”) and the three-digit pension plan number. The most recent Pension Protection Act Zone Status available in 2025 and 2024 is for the plan’s year-end at December 31, 2024 and December 31, 2023, respectively. Among other factors, generally, plans in the red zone are less than 65 percent funded, plans in the yellow zone are less than 80 percent funded and plans in the green zone are at least 80 percent funded. The FIP/RP Status Pending / Implemented Column indicates plans for which a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. Unless otherwise noted, the information for these tables was obtained from the Forms 5500 filed for each plan’s year-end at December 31, 2024 and December 31, 2023. The zone status is based on information received from the plans and is confirmed by each plan’s actuary. The multi-employer contributions listed in the table below are the Company’s multi-employer contributions made in fiscal years 2025, 2024 and 2023.

The following table contains information about the Company’s multi-employer pension plans:


								FIP/RP												****
				Pension Protection				Status												****
		EIN / Pension		Act Zone Status				Pending/		Multi-Employer Contributions									Surcharge	****
Pension Fund		Plan Number		2025		2024		Implemented		2025			2024			2023			Imposed^(4)^	****
SO CA UFCW Unions & Food Employers Joint Pension Trust Fund^(1)(2)^		95-1939092 - 001		Red		Red		Implemented		$	82		$	84		$	83		No
Desert States Employers & UFCW Unions Pension Plan^(1)^		84-6277982 - 001		Green		Green		No			19			19			19		No
Sound Variable Annuity Pension Trust^(1)^		86-3278029 - 001		Green		Green		No			15			15			15		No
Rocky Mountain UFCW Unions and Employers Pension Plan^(1)^		84-6045986 - 001		Green		Green		No			26			27			27		No
Oregon Retail Employees Pension Plan^(1)^		93-6074377 - 001		Green		Red		No			12			11			10		No
Bakery and Confectionary Union & Industry International Pension Fund^(1)^		52-6118572 - 001		Red		Red		Implemented			8			8			7		No
Retail Food Employers & UFCW Local 711 Pension^(1)^		51-6031512 - 001		Red		Red		Implemented			11			11			11		No
UFCW International Union — Industry Variable Annuity Pension Plan^(3)^		51-6055922 - 001		Green		Green		No			23			33			263		No
Western Conference of Teamsters Pension Plan		91-6145047 - 001		Green		Green		No			46			44			39		No
Central States, Southeast & Southwest Areas Pension Plan		36-6044243 - 001		Red		Red		Implemented			32			57			40		No
UFCW Consolidated Pension Plan^(1)^		58-6101602 - 001		Green		Green		No			207			70			98		No
IBT Consolidated Pension Plan^(1)(5)^		82-2153627 - 001		N/A		N/A		No			—			—			7		No
Other											15			19			16
Total Contributions										$	496		$	398		$	635
(1)	The Company's multi-employer contributions to these respective funds represent more than 5% of the total contributions received by the pension funds.
---	---
(2)	The information for this fund was obtained from the Form 5500 filed for the plan's year-end at March 31, 2025 and March 31, 2024.
---	---
(3)	The information for this fund was obtained from the Form 5500 filed for the plan's year-end at June 30, 2024 and June 30, 2023.
---	---
(4)	Under the Pension Protection Act, a surcharge may be imposed when employers make contributions under a collective bargaining agreement that is not in compliance with a rehabilitation plan. As of January 31, 2026, the collective bargaining agreements under which the Company was making contributions were in compliance with rehabilitation plans adopted by the applicable pension fund.
---	---
(5)	The plan was formed after 2006 and therefore is not subject to zone status certifications.
---	---

The following table describes (a) the expiration date of the Company’s collective bargaining agreements and (b) the expiration date of the Company’s most significant collective bargaining agreements for each of the material multi-employer funds in which the Company participates:


		Expiration Date					****
		of Collective		Most Significant Collective			****
		Bargaining		Bargaining Agreements^(1)^			****
Pension Fund		Agreements		Count		Expiration	****
SO CA UFCW Unions & Food Employers Joint Pension Trust Fund		March 2026 to March 2028		1		March 2028
UFCW Consolidated Pension Plan		June 2025^(2)^ to September 2029		4		June 2026 to March 2029
Desert States Employers & UFCW Unions Pension Plan		March 2026 to June 2029		1		March 2026
Sound Variable Annuity Pension Trust		February 2026 to July 2028		3		May 2027 to August 2027
Rocky Mountain UFCW Unions and Employers Pension Plan		November 2025^(2)^ to February 2028		1		January 2028
Oregon Retail Employees Pension Plan		February 2027 to March 2029		3		August 2027 to July 2028
Bakery and Confectionary Union & Industry International Pension Fund		April 2026 to January 2028		3		April 2026 to June 2027
Retail Food Employers & UFCW Local 711 Pension		April 2026 to March 2028		1		March 2028
UFCW International Union — Industry Variable Annuity Pension Plan		March 2026 to October 2029		4		March 2026 to March 2029
Western Conference of Teamsters Pension Plan		May 2026 to September 2029		4		September 2025^(2)^to September 2029
IBT Consolidated Pension Plan		September 2027 to September 2029		3		September 2027 to September 2029
(1)	This column represents the number of significant collective bargaining agreements and their expiration date for each of the Company’s pension funds listed above. For the purposes of this table, the “significant collective bargaining agreements” are the largest based on covered employees that, when aggregated, cover the majority of the employees for which the Company makes multi-employer contributions for the referenced pension fund.
---	---
(2)	Certain collective bargaining agreements are operating under an extension.
---	---

Based on the most recent information available to it, the Company believes the present value of actuarial accrued liabilities in most of these multi-employer plans exceeds the value of the assets held in trust to pay benefits. Moreover, if the Company were to exit certain markets or otherwise cease making contributions to these funds, the Company could trigger a withdrawal liability. Any adjustment for withdrawal liability will be recorded when it is probable that a liability exists and it can be reasonably estimated.

The Company also contributes to various other multi-employer benefit plans that provide health and welfare benefits to active and retired participants. Total contributions made by the Company to these other multi-employer health and welfare plans were approximately $1,241 in 2025, $1,228 in 2024 and $1,182 in 2023.

16. SEGMENT REPORTING

The Company operates supermarkets, multi-department stores and fulfillment centers throughout the United States. The Company’s retail operations, which represent substantially all of the Company’s consolidated sales, are its only reportable segment. The retail operations’ segment revenues are predominately earned as consumer products are sold to customers in our stores, fuel centers and via the Company’s eCommerce business. The Company aggregates its operating divisions into one reportable segment due to the operating divisions having similar economic characteristics with similar long-term financial performance. In addition, the Company’s operating divisions offer customers similar products, have similar distribution methods, operate in similar regulatory environments, purchase the majority of the merchandise for retail sale from similar (and in many cases identical) vendors on a coordinated basis from a centralized location, serve similar types of customers, and are allocated capital from a centralized location. Operating divisions are organized primarily on a geographical basis so the operating division management team can be responsive to local needs of the operating division and can execute company strategic plans and initiatives throughout the locations in their operating division. This geographical separation is the primary differentiation between these retail operating divisions. The geographical basis of organization reflects how the business is managed and how the Company’s principal executive officer, who acts as the Company’s chief operating decision maker (“CODM”), assesses performance internally. All of the Company’s operations are domestic.

The accounting policies of the retail operations segment are the same as those described in the summary of significant accounting policies in Note 1. The Company’s CODM assesses performance and allocates resources for the retail operations segment using segment FIFO earnings before net interest expense, income tax expense and depreciation and amortization (“EBITDA”). The Company defines FIFO EBITDA as EBITDA excluding the LIFO charge. The Company’s CODM also uses segment FIFO EBITDA to measure the operational effectiveness of the Company’s financial model, compare the performance of core operating results between periods, against budget and against competitors and evaluate whether to invest capital in the retail operations segment or in other parts of the Company, such as for share repurchases or dividend payments. The Company’s CODM is not provided asset information by reportable segment as asset information is provided to the CODM on a consolidated basis.

The following table presents the Company’s retail operations segment revenue, measure of segment profit or loss, significant segment expenses and reconciliation of retail operations segment FIFO EBITDA to consolidated net earnings before income tax expense for the fiscal years ended January 31, 2026, February 1, 2025 and February 3, 2024:


		2025			2024^(1)^			2023^(1)^
		(52 weeks)			(52 weeks)			(53 weeks)
Retail operations segment sales		$	147,642		$	147,123		$	150,039
Retail operations segment expenses:
Merchandise costs, including advertising, warehousing, and transportation, excluding the LIFO charge			113,083			113,625			116,562
Operating, general, and administrative			28,308			25,431			26,252
Rent			872			877			891
Retail operations segment FIFO EBITDA		$	5,379		$	7,190		$	6,334

Reconciliation of net earnings before income tax expense:
Retail operations segment FIFO EBITDA		$	5,379		$	7,190		$	6,334
Depreciation and amortization			(3,332)			(3,246)			(3,125)
LIFO charge			(157)			(95)			(113)
Net interest expense			(639)			(450)			(441)
Non-service component of company-sponsored pension plan (expense) benefits			(10)			12			30
(Loss) gain on investments			(41)			(148)			151
Gain on the sale of business			—			79			—
Consolidated net earnings before income tax expense		$	1,200		$	3,342		$	2,836
(1)	The presentation of segment revenues and significant segment expenses for 2024 and 2023 has been recast to conform to the current year presentation and reflects operating segment information reviewed by the Company’s current CODM.
---	---

17. SALE OF KROGER SPECIALTY PHARMACY

On October 4, 2024, the Company completed the sale of its Kroger Specialty Pharmacy business to Elevance Health, for $464. In 2024, the Company recognized a gain on sale for $79, $91 net of tax, which includes the reduction to income tax expense of $31 related to recognizing deferred tax assets for the divested entity.

18. TERMINATION OF MERGER WITH ALBERTSONS COMPANIES, INC.

As previously disclosed, on October 13, 2022, the Company entered into the Merger Agreement with Albertsons pursuant to which all of the outstanding shares of Albertsons common and preferred stock (on an as converted basis) automatically would have been converted into the right to receive $34.10 per share, subject to certain reductions following a $6.85 per share pre-closing cash dividend that was paid on January 20, 2023 to Albertsons shareholders of record as of October 24, 2022. The adjusted per share cash purchase price was expected to be $27.25.

On February 26, 2024, the Federal Trade Commission (“FTC”) instituted an administrative proceeding to prohibit the merger. Simultaneously, the FTC (joined by nine States) filed suit in the United States District Court for the District of Oregon (the “FTC Federal Litigation”) requesting a preliminary injunction to block the merger. On December 10, 2024, pursuant to a decision of United States District Court for the District of Oregon in the case Federal Trade Commission et al. v. The Kroger Company and Albertsons Companies, Inc. (Case No.: 3:24-cv-00347-AN), the court issued a preliminary injunction enjoining the consummation of the merger.

On January 15, 2024, and February 14, 2024, the attorneys general of Washington and Colorado, respectively, filed suit in their respective state courts, also seeking to enjoin the merger. On December 10, 2024, the Washington court also issued a permanent injunction blocking the merger in the Washington case. On March 5, 2025, the Colorado court dismissed the claim seeking to enjoin the merger as moot. On February 23, 2026, the Colorado court dismissed a second claim related to an alleged no-poach agreement between Kroger and Albertsons due to a lack of subject matter jurisdiction.

In addition to these governmental actions, private plaintiffs filed suit in the United States District Court for the Northern District of California also seeking to enjoin the transaction. That case was dismissed with prejudice on February 3, 2025, and plaintiffs have appealed.

On December 11, 2024, the Company delivered a notice to Albertsons terminating the merger agreement (the “Termination Notice”). The Termination Notice further notified Albertsons that a prior termination letter sent by Albertsons to Kroger on December 10, 2024 was not an effective termination. In connection with the Termination Notice, Kroger notified Albertsons that Kroger has no obligation to pay the Parent Termination Fee (as defined in the Merger Agreement) because Albertsons failed to perform and comply in all material respects with its covenants under the Merger Agreement.

On December 10, 2024, Albertsons sued the Company in the Delaware Court of Chancery for alleged breaches of the Merger Agreement and the implied covenant of good faith and fair dealing. Albertsons seeks payment of a $600 termination fee that Albertsons alleges it is owed under the Merger Agreement, as well as additional damages, including expenses paid by Albertsons in connection with the Merger and the lost premium Albertsons alleges is owed to its shareholders, as well as other relief. On March 17, 2025, the Company filed an answer denying the allegations in Albertsons’s complaint, and also filed counterclaims that seek recovery for breaches of the Merger Agreement by Albertsons.

In connection with the Merger Agreement, on October 13, 2022, the Company entered into a commitment letter with certain lenders pursuant to which the lenders committed to provide a $17,400 senior unsecured bridge term loan facility, which, if entered into, would have matured 364 days after the closing date of the merger. The commitments were intended to be drawn to finance the merger with Albertsons only to the extent the Company did not arrange for alternative financing prior to closing. As alternative financing for the merger was secured, the commitments with respect to the bridge term loan facility under the commitment letter were reduced. The entry into the term loan credit agreement mentioned below reduced the commitments under the Company’s $17,400 bridge facility commitment by $4,750 to $12,650. On April 12, 2024, the Company and the lenders to the bridge facility, at the Company’s request, further reduced the bridge facility commitment by $2,000 to $10,650. During the third quarter of 2024, the Company terminated the bridge term loan facility due to issuing $10,500 of senior notes mentioned below, net proceeds of which were expected to partially fund the cash consideration for the proposed merger and for general corporate purposes. Fees with respect to the bridge term loan facility are included in “Other” in the Company’s Consolidated Statements of Cash Flows within “Cash Flows from Financing Activities” and were recognized as operating, general and administrative expense in the Company’s Consolidated Statements of Operations over the commitment period.

On November 9, 2022, the Company executed a term loan credit agreement with certain lenders pursuant to which the lenders committed to provide, contingent upon the completion of the merger with Albertsons and certain other customary conditions to funding, (1) senior unsecured term loans in an aggregate principal amount of $3,000 maturing on the third anniversary of the merger closing date and (2) senior unsecured term loans in an aggregate principal amount of $1,750 maturing on the date that is 18 months after the merger closing date (collectively, the “Term Loan Facilities”). Borrowings under the Term Loan Facilities were to be used to pay a portion of the consideration and other amounts payable in connection with the merger with Albertsons. In 2024, the Company entered into a second amendment to the term loan agreement to, among other things, amend certain covenants applicable thereto.

Concurrently with the termination of the Merger Agreement on December 11, 2024, all of the commitments with respect to the Term Loan Facilities were automatically terminated in accordance with the terms thereof.

On August 20, 2024, the Company issued $1,000 of its 4.70% Senior Notes due 2026 (the “2026 notes”); $1,000 of its 4.60% Senior Notes due 2027 (the “2027 notes”); $1,400 of its 4.65% Senior Notes due 2029 (the “2029 notes”); $1,300 of its 4.90% Senior Notes due 2031 (the “2031 notes”); $2,200 of its 5.00% Senior Notes due 2034 (the “2034 notes”); $2,100 of its 5.50% Senior Notes due 2054 (the “2054 notes”); and $1,500 of its 5.65% Senior Notes due 2064 (the “2064 notes”) to pay a portion of the cash consideration for its proposed merger with Albertsons and general corporate purposes. The 2026 notes, 2027 notes, 2029 notes and the 2031 notes (collectively, the “SMR Notes”) were subject to a special mandatory redemption if the proposed merger was terminated or did not close by an agreed upon date. In connection with the termination of the Merger Agreement, the Company redeemed the SMR Notes on December 18, 2024 at a redemption price equal to 101% of the principal amount, plus accrued and unpaid interest to, but excluding, December 18, 2024. The 2034 notes, the 2054 notes and the 2064 notes remain outstanding.

On August 15, 2024, the Company commenced an exchange offer for any and all outstanding notes (the “ACI Notes”) issued by Albertsons and certain of its subsidiaries for up to approximately $7,442 aggregate principal amount of new senior notes to be issued by the Company and cash. In conjunction with the exchange offers (the “Exchange Offers”), the Company concurrently solicited consents (collectively, the “Consent Solicitations”) to adopt certain proposed amendments (the “Proposed Amendments”) to each of the indentures (each an “ACI Indenture” and, collectively, the “ACI Indentures”) governing the ACI Notes. In connection with the termination of the Merger Agreement, on December 11, 2024, the Company terminated the Exchange Offers and Consent Solicitations.

19. FULFILLMENT NETWORK ASSET IMPAIRMENT AND RELATED CHARGES

In 2025, the Company completed a strategic review of its eCommerce operations with the intention of improving the customer experience while accelerating eCommerce profitability. Following this review, Kroger identified opportunities to optimize its automated fulfillment network by closing facilities in Pleasant Prairie, Wis.; Frederick, Md.; and Groveland, Fla. in January 2026, which had not met operational or financial expectations, and canceled plans for the site in Charlotte, N.C. Kroger will continue to deliver eCommerce offerings using its store footprint, third-party delivery providers and automated fulfillment facilities where applicable. At the present time, in geographies where Kroger sees higher density of demand and better cost structure, the Company continues to evaluate performance and sustainability of automated fulfillment.

The Company considered the completion of the strategic review to be a triggering event that indicated the carrying amount of the fulfillment network may not be recoverable. As a result, the Company tested the recoverability of each automated fulfillment facility asset group. Each automated fulfillment facility represents the appropriate asset group for which the long-lived assets should be evaluated, as this represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. The carrying value of each asset group primarily includes real estate, equipment and finance and operating lease assets. The recoverability testing indicated the carrying value of each asset group exceeded the sum of undiscounted cash flows expected to result from the use and eventual disposition of the assets.

During 2025, these asset groups were written down to their estimated fair values. The fair value for real estate and equipment was determined using a market approach utilizing prices for similar assets. Fair value for lease assets was determined using a discounted cash flow income approach considering estimated market rent. In addition to the impairment, the Company also recognized other accrued liabilities related to these asset groups. This resulted in recognizing impairment and related charges of $2,497, $1,908 net of tax, which included a cash termination payment to Ocado of approximately $350 for the closure and cancellation of certain fulfillment centers. This $350 payment was recorded as “Payments on long-term debt including obligations under finance leases” within “Cash Flows from Financing Activities” and “Other” within “Cash Flows from Operating Activities” in the Company’s Consolidated Statement of Cash Flows for $246 and $104, respectively.

20. RECENTLY ADOPTED ACCOUNTING STANDARDS

In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This guidance amends existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. The Company has prospectively adopted this standard effective January 31, 2026 and has accordingly updated its income tax disclosures. See Note 4 for additional information.

In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure.” The ASU updated reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance. The Company adopted ASU No. 2023-07 during the year ended February 1, 2025. See Note 16 for additional information.

21. RECENTLY ISSUED ACCOUNTING STANDARDS

In September 2025, the FASB issued ASU 2025-06, “Intangibles – Goodwill and Other – Internal-use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-use Software.” The ASU was issued to modernize the accounting for internal-use software by eliminating the accounting consideration of software project development stages, clarifying the criteria to begin capitalizing costs. The ASU is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently assessing the effect that adoption of this guidance will have on its Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The guidance requires disclosures about specific expense categories, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. The ASU is effective in the first annual reporting period beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently assessing the effect that adoption of this guidance will have on its Consolidated Financial Statements.

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A.	CONTROLS AND PROCEDURES.

As of January 31, 2026, our principal executive officer and principal financial officer, together with a disclosure review committee appointed by the principal executive officer, evaluated the Company’s disclosure controls and procedures. Based on that evaluation, our principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of January 31, 2026.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company is in the process of implementing a broad, multi-year, technology transformation project to modernize mainframe, middleware and legacy systems to achieve better process efficiencies across customer service, merchandising, sourcing, payroll and accounting through the use of various solutions. There have been no material additional implementations of modules during the quarter ended January 31, 2026. As the Company’s technology transformation project continues, the Company continues to emphasize the maintenance of effective internal controls and assessment of the design and operating effectiveness of key control activities throughout development and deployment of each phase and will evaluate as additional phases are deployed.

There were no changes in Kroger’s internal control over financial reporting that materially affected, or were reasonably likely to materially affect, Kroger’s internal control over financial reporting during the quarter ended January 31, 2026. 99

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. With the participation of the principal executive officer and principal financial officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework and criteria established in Internal Control — Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of January 31, 2026.

The effectiveness of the Company’s internal control over financial reporting as of January 31, 2026, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which can be found in Item 8 of this Annual Report on Form 10-K.

ITEM 9B.	OTHER INFORMATION.

In the fourth quarter of 2025, no director or officer (as defined in Exchange Act Rule 16a-1(f)) of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement for the purchase or sale of securities of the Company, within the meaning of Item 408 of Regulation S-K.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS .

Not applicable.

PART III

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Our board of directors has adopted The Kroger Co. Policy on Business Ethics, applicable to all officers, employees and directors, including Kroger’s principal executive, financial and accounting officers. The Policy on Business Ethics is available on our website at ir.kroger.com under Investors – Governance – Policy on Business Ethics. A copy of the Code of Ethics is available in print free of charge to any shareholder who requests a copy. Shareholders may make a written request to Kroger’s Secretary at our executive offices at 1014 Vine Street, Cincinnati, Ohio 45202. We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver from, a provision of the Policy on Business Ethics for our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting such information on our website.

The information required by this Item 10 with respect to executive officers is included within Item 1 in Part I of this Annual Report on Form 10-K under the caption “Information about our Executive Officers.” The information required by this Item not otherwise set forth in Part I above or in this Item 10 of Part III is set forth under the headings Election of Directors, Information Concerning the Board of Directors- Committees of the Board, Information Concerning the Board of Directors- Audit Committee and Delinquent 16(a) Reports, if required, and Compensation Discussion and Analysis – Securities Trading Policies in the definitive proxy statement to be filed by the Company with the Securities and Exchange Commission within 120 days after the end of the fiscal year 2025 (the “2026 proxy statement”) and is hereby incorporated by reference into this Annual Report on Form 10-K.

ITEM 11.	EXECUTIVE COMPENSATION.

The information required by this Item is set forth in the sections entitled Compensation Discussion and Analysis, Compensation Committee Report, and Compensation Tables in the 2026 proxy statement and is hereby incorporated by reference into this Annual Report on Form 10-K.

100

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The information required by this Item is set forth in the sections entitled Equity Compensation Plan Information and Beneficial Ownership of Common Stock in the 2026 proxy statement and is hereby incorporated by reference into this Annual Report on Form 10-K.

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

The information required by this Item is set forth in the sections entitled Related Person Transactions and Information Concerning the Board of Directors-Independence in the 2026 proxy statement and is hereby incorporated by reference into this Annual Report on Form 10-K.

ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The information required by this Item is set forth in the section entitled Ratification of the Appointment of Kroger’s Independent Auditor in the 2026 proxy statement and is hereby incorporated by reference into this Annual Report on Form 10-K.

101

PART IV

ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a)1.†		Financial Statements:
		Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
		Consolidated Balance Sheets as of January 31, 2026 and February 1, 2025
		Consolidated Statements of Operations for the years ended January 31, 2026, February 1, 2025 and February 3, 2024
		Consolidated Statements of Comprehensive Income for the years ended January 31, 2026, February 1, 2025 and February 3, 2024<br><br>Consolidated Statements of Cash Flows for the years ended January 31, 2026, February 1, 2025 and February 3, 2024
		Consolidated Statement of Changes in Shareholders’ Equity for the years ended January 31, 2026, February 1, 2025 and February 3, 2024
		Notes to Consolidated Financial Statements

(a)2.		Financial Statement Schedules:
		There are no Financial Statement Schedules included with this filing for the reason that they are not applicable or are not required or the information is included in the financial statements or notes thereto.

(a)3.(b)		Exhibits


3.1		Amended Articles of Incorporation are hereby incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended May 22, 2010, as amended by the Amendment to Amended Articles of Incorporation, which is hereby incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended May 23, 2015.

3.2		The Company’s Regulations are hereby incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on June 27, 2019.

4.1		Instruments defining the rights of holders of long-term debt of the Company and its subsidiaries are not filed as Exhibits because the amount of debt under each instrument is less than 10% of the consolidated assets of the Company. The Company undertakes to file these instruments with the SEC upon request.

4.2		Description of Securities. Incorporated by reference to Exhibit 4.2 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020.

10.1		Credit Agreement, dated as of September 13, 2024, by and among the Company, the lenders from time to time party thereto, Wells Fargo Bank, National Association and Citibank, N.A., as co-administrative agents, and Wells Fargo Bank, National Association, as the paying agent, which is hereby incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on September 13, 2024.

10.2		Amendment No. 1 to Credit Agreement, dated as of October 8, 2024, by and among the Company, the lenders party thereto, Wells Fargo Bank, National Association and Citibank, N.A., as co-administrative agents, and Wells Fargo Bank, National Association, as the paying agent, to the Credit Agreement, dated as of September 13, 2024, which is hereby incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on October 9, 2024.

10.3		Amendment No. 2 to Term Loan Credit Agreement, dated as of September 13, 2024, by and among the Company, the lenders party thereto and Citibank, N.A., as administrative agent, to the Term Loan Credit Agreement, dated as of November 9, 2022, which is hereby incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on September 13, 2024.

10.4		Amendment No. 3 to Term Loan Credit Agreement, dated as of October 8, 2024, by and among the Company, the lenders party thereto and Citibank, N.A., as administrative agent, to the Term Loan Credit Agreement, dated as of November 9, 2022, which is hereby incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on October 9, 2024.

102

10.5*		The Kroger Co. Deferred Compensation Plan for Independent Directors. Incorporated by reference to Exhibit 10.2 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2016.

10.6*		The Kroger Co. Executive Deferred Compensation Plan. Incorporated by reference to Exhibit 10.4 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2005.

10.7*		The Kroger Co. 401(k) Retirement Savings Account Restoration Plan. Incorporated by reference to Exhibit 10.4 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2007.

10.8*		The Kroger Co. Supplemental Retirement Plans for Certain Retirement Benefit Plan Participants. Incorporated by reference to Exhibit 10.6 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2007.

10.9*		The Kroger Co. Employee Protection Plan dated January 13, 2017. Incorporated by reference to Exhibit 10.5 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2017.

10.10		Term Loan agreement, dated as of November 9, 2022, by and among The Kroger Co., the lenders from time to time party thereto, and Citibank, N.A., as administrative agent for the lenders, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on November 10, 2022.

10.11		Amendment No. 1 to Credit Agreement, dated as of November 9, 2022, by and among The Kroger Co., the lenders party thereto, and Bank of America, N.A., as paying agent to the Amended and Restated Credit Agreement dated July 6, 2021, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the SEC on November 10, 2022.

10.12		The Kroger Co. 2008 Long-Term Incentive and Cash Bonus Plan. Incorporated by reference to Exhibit 4.2 of the Company’s Form S-8 filed with the SEC on June 26, 2008.

10.13		The Kroger Co. 2011 Long-Term Incentive and Cash Bonus Plan. Incorporated by reference to Exhibit 4.2 of the Company’s Form S-8 filed with the SEC on June 23, 2011.

10.14		The Kroger Co. 2014 Long-Term Incentive and Cash Bonus Plan. Incorporated by reference to Exhibit 4.2 of the Company’s Form S-8 filed with the SEC on July 29, 2014.

10.15*		The Kroger Co. 2019 Long-Term Incentive Plan. Incorporated by reference to Exhibit 99.1 of the Company’s Form S-8 filed with the SEC on June 28, 2019.

10.16*		Form of Restricted Stock Grant Agreement under Long-Term Incentive Cash Bonus Plans. Incorporated by reference to Exhibit 10.11 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020.

10.17*		Form of Restricted Stock Grant Agreement under Long-Term Incentive and Cash Bonus Plans. Incorporated by reference to Exhibit 10.9 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2007.

10.18*		Form of Non-Qualified Stock Option Grant Agreement under Long-Term Incentive and Cash Bonus Plan. Incorporated by reference to Exhibit 10.13 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020.

10.19*		Form of Non-Qualified Stock Option Grant Agreement under Long-Term Incentive and Cash Bonus Plans. Incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended May 24, 2008.

10.20*		Form of Performance Unit Award Agreement under Long-Term Incentive and Cash Bonus Plans. Incorporated by reference to Exhibit 10.15 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020.<br><br>
10.21*		Form of Restricted Stock Grant Agreement under Long-Term Incentive and Cash Bonus Plan. Incorporated by reference to Exhibit 10.16 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2021.

103

10.22*		Amended and Restated Employment Agreement between The Kroger Co. and David Kennerley dated March 28, 2025. Incorporated by reference to exhibit 10.18 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2025.

10.23*†		Employment Agreement between The Kroger Co. and Gregory S. Foran dated January 15, 2026.

10.24*†		Form of Restricted Stock Grant Agreement under Long-Term Incentive Plan.

10.25*†		Form of Non-Qualified Stock Option Grant under Long-Term Incentive Plan.

10.26*		The Amended and Restated Kroger 2019 Long-Term Incentive Plan. Incorporated by reference to Exhibit 99.1 of the Company’s S-8 filed with the SEC on July 6, 2022.

19.1		The Kroger Co. Share Repurchase Policy. Incorporated by reference to Exhibit 19.1 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2025.

19.2		The Kroger Co. Policy on Securities Trading. Incorporated by reference to Exhibit 19.2 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2025.

21.1		Subsidiaries of the Registrant.

23.1		Consent of Independent Registered Public Accounting Firm.

24.1		Powers of Attorney.

31.1		Rule 13a-14(a)/15d-14(a) Certification.

31.2		Rule 13a-14(a)/15d-14(a) Certification.

32.1		Section 1350 Certifications.

97		The Kroger Co. Policy on Incentive Based Compensation Recovery. Incorporated by reference to Exhibit 97 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2025.

101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		XBRL Taxonomy Extension Schema Document.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
*	Management contract or compensatory plan or arrangement.
---	---
†	Filed herewith.
---	---

ITEM 16.	FORM 10-K SUMMARY .

Not Applicable.

104

SIGNATUR ES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	THE KROGER CO.

Dated: March 31, 2026	/s/ Ronald L. Sargent
	Ronald L. Sargent
	Chairman of the Board
	(principal executive officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities indicated on the 31^st^ of March 2026.

/s/ David J.C. Kennerley		Executive Vice President and Chief Financial Officer
David J.C. Kennerley		(principal financial officer)

/s/ Brian W. Nichols		Group Vice President, Corporate Controller and Assistant Treasurer
Brian W. Nichols		(principal accounting officer)

*		Director
Nora A. Aufreiter
*		Director
Kevin M. Brown
*		Director and Chief Executive Officer
Gregory S. Foran
*		Director
Elaine L. Chao
*		Director
Anne Gates
*		Director
Karen M. Hoguet
*		Director
Clyde R. Moore
*		Chairman of the Board
Ronald L. Sargent
*		Director
J. Amanda Sourry Knox
*		Director
Mark S. Sutton
*		Director
Ashok Vemuri

*By:	/s/ George H. Vincent
	George H. Vincent
	Attorney-in-fact

105

Exhibit 10.23



THE KROGER CO.	1014 VINE STREET	CINCINNATI, OHIO 45202-1100

Date: January 15, 2026

Greg,

We are pleased to offer you the position of Chief Executive Officer, The Kroger Co. effective February 9, 2026. The position will be based in Cincinnati, Ohio.

Your annual salary will be $1,500,000 with an annual incentive plan target of 200% of your base salary. The annual incentive plan is currently paid out in March of each year based on our prior year company performance as described in the plan for that year. In order to receive an annual incentive payout, you must be an active associate on the last day of our fiscal year for which the incentive was earned.

On the first of the month following your date of hire, you will be eligible for our comprehensive health care plans along with stock purchase and life and income protection plans. You will also be eligible for 5 weeks of vacation. As an executive of the company, your benefits will also include long-term disability, deferred compensation, accidental death and dismemberment and the long-term incentive plan. Please review the executive benefits brochure you will receive after your hire date for complete details.

The current total target long-term incentive plan and equity award value for your role, assuming your performance is consistently delivering expectations, is $12,000,000 (current mix expected for 2026 is 20% in stock options, 30% in restricted shares, and 50% in performance units; this mix is subject to change in future years but will be generally consistent with other Kroger executives). Your initial full grant will be awarded in March 2026 as a part of the executive annual grant, based on the Equity Awards Committee approval.

You will also be awarded performance units for the 2024-2026 Long-term Incentive Plan in March 2026, based on the Equity Awards Committee approval. The amount of units awarded will be equivalent to the current projected plan performance of 69% (or subsequent updated level provided to the Committee at the March 2026 meeting), paying out at a fair market value of $1,000,000 based on the grant date stock price.

You will also be awarded performance units for the 2025-2027 Long-term Incentive Plan in March 2026, based on the Equity Awards Committee approval. The amount of units awarded will be equivalent to the current projected plan performance of 100% (or subsequent updated level provided to the Committee at the March 2026 meeting), paying out at a fair market value of $1,000,000 based on the grant date stock price.

You will have an annual international allowance of up to $250,000 per year for a period of 2 years (ineligible for tax gross-up). This will cover housing in Cincinnati, New Zealand healthcare and financial / tax planning through KPMG. The housing allowance will be re-evaluated by the Compensation and Talent Development Committee at the end of the 2-year period. The New Zealand healthcare and financial/tax planning will continue for the length of your employment and will not exceed $50,000 per year. You will also receive a post-employment allowance for tax planning through KPMG, not to exceed $50,000.

You will have a car allowance and/or car-and-driver service for the first 3 months. This will not be eligible for tax gross-up.



THE KROGER CO.	1014 VINE STREET	CINCINNATI, OHIO 45202-1100

You will have a plane allowance of up to $200,000 per year for personal use on Kroger corporate aircraft pursuant to a time sharing agreement (ineligible for tax gross-up). We will use the Standard Industry Fare Level rate calculation to determine the imputed income tax implications.

A policy for a standard general severance benefit for officers of the company is currently under review by the Compensation and Talent Development Committee. We expect that this policy will be market competitive for a CEO. You will also be covered by the Kroger Employee Protection Plan for Change in Control Severance Benefits.

To more closely align the interests of Kroger’s officers and directors with those of our shareholders, the Board of Directors has adopted stock ownership guidelines. These guidelines require non-employee directors, executive officers, and other key executives to acquire and hold a minimum dollar value of Kroger common shares within 5 years of entering a role subject to these requirements. The target value of stock ownership for your role equals 6 times your base salary.

Until the ownership requirements are met, you must hold 100% of common shares issued, including performance units earned and shares received upon the exercise of stock options or upon the vesting of restricted stock, except those necessary to pay the exercise price of the options and/or applicable taxes. While working to achieve your target level of ownership, you must also retain all Kroger common shares unless a disposition is approved by the Board of Directors or its Compensation Committee.

You also qualify for the Kroger Relocation Program. Your relocation package would include one month of base pay at the new salary to assist with miscellaneous relocation expenses not covered in the relocation policy, which will be generated with your first payroll processing in your new position. Upon acceptance of this offer, a relocation representative would contact you to discuss your moving plans.

As an officer of the company, you are ineligible for any tax gross ups with the exception of relocation expenses.

This offer is contingent upon successful completion of a customary background check, approval of your E-3 Visa application and Board of Directors approval. Our Board of Directors is looking forward to welcoming you to the company as our new CEO.

Signing below confirms all the details of our offer, terms and conditions of employment but does not constitute any express, implied or real contracts of employment, as your employment will be at-will.

Please indicate your decision below and sign and date your acceptance via Docusign.

Greg, we appreciate you considering this role with Kroger. We believe you will make a big difference in our success and the achievement of our vision. We personally look forward to working closely with you.



THE KROGER CO.	1014 VINE STREET	CINCINNATI, OHIO 45202-1100

Please feel free to contact either of us if you have any additional questions concerning this offer.

Sincerely,<br><br><br><br><br><br><br><br>Amanda Sourry Mark Sutton
Member of the Board of Directors and Lead Director of the Board of Directors<br><br>Compensation and Talent Development Committee Chair The Kroger Co.
The Kroger Co.<br><br><br><br><br><br><br><br>

I agree to the terms of this offer letter: Yes No

<br><br><br><br><br><br>
<br><br><br><br><br><br>/s/ Gregory S. Foran
Signature Date

cc: Ron Sargent, Interim Chairman and Chief Executive Officer

Tim Massa, EVP, Chief Associate Experience Officer

THE KROGER CO

Exhibit 10.24

This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.

The date of this document is <Date of Grant>.

THE KROGER CO.

RESTRICTED STOCK AGREEMENT

Pursuant to a Long-Term Incentive Plan (the “Plan”), The Kroger Co. (“we” or “us”) hereby grants <Number of Shares Granted> shares of restricted stock (the “shares”) to the undersigned grantee (“you”) on <Date of Grant> (the “grant date”).

1.The shares will be issued in your name, or in the name of an agent or plan administrator on your behalf, but will be held by us. The shares will be subject to, and any certificate issued to evidence the shares will bear, the following legend:

“This certificate and the shares of stock represented hereby are subject to the terms and conditions (including the risks of forfeiture and restrictions against transfer) contained in a Long-Term Incentive Plan of The Kroger Co. and an Agreement entered into between the Plan participant and The Kroger Co. Release from such terms and conditions will be made only in accordance with the provisions of the Plan and the Agreement, a copy of each of which is on file in the office of the Secretary of The Kroger Co. or The Kroger Co.’s plan administrator.”

2.Neither the shares, the right to vote the shares or the right to receive dividends thereon may be sold, assigned, transferred, pledged, hypothecated or otherwise transferred or encumbered by you during the restricted period. You will have all the other rights of a shareholder. Dividends on the restricted shares will be treated as compensation for tax purposes, unless a Section 83(b) election is made in which case they will be treated as dividends for tax purposes, but in either case will not be considered as earnings for purposes of calculating retirement benefits.

3.Unless and until the restrictions on the shares lapse, the shares will be forfeited by you if your employment by us ceases for any reason other than

(a) death or disability, as determined by the Committee as defined in the Plan;

(b) your “Retirement,” as defined below; or

(c) your employment is terminated without “Cause” or by you for “Good Reason” within two years after a “Change in Control,” all as defined below.

At the time of either of the foregoing (a) or (c), the restrictions will lapse, the shares no longer will be subject to the restrictions, and any new certificates issued to you or the your legal representative for all shares theretofore subject to risk of forfeiture will be free of the foregoing legend. Subject to the provisions of Paragraphs 11, 12, and 13 below, upon your Retirement the restrictions on your shares will continue to lapse in accordance with the vesting schedule outlined in Paragraph 7, and upon lapsing of those restrictions those shares will no longer be subject to the risk of forfeiture and will be free of the restrictive legend.

4.For purposes of Paragraph 3, the following definitions shall apply:

(i)“Change in Control” means:

(a)any Person, excluding Kroger, any of its Affiliates and any employee benefit plan of Kroger or any of its Affiliates, is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of securities of Kroger representing 30% or more of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors;

(b)consummation of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of the Company and its Affiliates (a “Business Combination”), in each case, unless, following such Business Combination, Persons that were the beneficial owners of outstanding voting securities entitled to vote generally in the election of directors of Kroger immediately prior to such Business Combination beneficially own, directly or indirectly, at least 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the entity resulting from such Business Combination (including, without limitation, an entity which, as a result of such Business Combination, owns all or substantially all of the Company and its Affiliates or their assets either directly or through one or more subsidiaries or affiliates) in substantially the same proportions as their ownership of such securities immediately prior to such Business Combination;

(c)during any period of twenty-four (24) consecutive months, individuals who, at the beginning of such period, constitute the Board (the “Incumbent Directors”) cease for any reason (including without limitation, as a result of a tender offer, proxy contest, merger or similar transaction) to constitute at least a majority thereof; provided that, any individual becoming a director of Kroger whose appointment or election by the Board or nomination for election by Kroger’s shareholders was approved or recommended by a vote of at least two-thirds of the Incumbent Directors shall also be considered an Incumbent Director; or

(d)the approval by the shareholders of Kroger of a complete liquidation or dissolution of the Company.

(ii)“Affiliate” means a corporation, partnership, business trust, limited liability company, or other form of business organization at least 50% of the total combined voting power of all classes of stock or other equity interests of which is owned by Kroger, either directly or indirectly;

(iii)“Kroger” and “Company” means the parent company, The Kroger Co.;

(iv)“Person” means an individual, corporation, partnership, association, trust, unincorporated organization, limited liability company or other legal entity. All references to Person shall include an individual Person or group (as defined in Rule 13d-5 under the Exchange Act) of persons;

(v)“Board” means the Board of Directors of Kroger;

(vi)“Good Reason” means:

(a)without your consent

(i)A material diminution in your base compensation;

(ii)A material diminution in your authority, duties, or responsibilities;

(iii)A material change in the geographic location at which you must perform services (this shall be deemed to occur if and only if your principal place of work is relocated more than 50 miles from your principal place of work immediately before a Change in Control); or

(iv)Any action or inaction by Kroger which results in employee benefits, perquisites and fringe benefits that, in the aggregate, are materially less favorable than those provided to you immediately prior to the Change in Control.

(b)You shall not have Good Reason for a termination of employment unless:

(i)the condition constituting Good Reason occurs during the two years following a Change in Control;

(ii)you provide written notice to the Committee of the existence of the condition constituting Good Reason within 90 days of the initial existence of the condition constituting Good Reason and the Company is given 30 days to cure such condition; and

(iii)you incur a termination of employment no later than 120 days following the end of the two years after a Change in Control.

(vii)“Cause” means your:

(a)failure to substantially perform your duties (other than by reason of disability) with respect to Kroger or an Affiliate,

(b)breach of fiduciary duty to Kroger or an Affiliate,

(c)dishonesty, fraud, alcohol or illegal drug abuse, or misconduct with respect to the business or affairs of Kroger or an Affiliate,

(d)willful violation of the policies of Kroger or an Affiliate after receiving written notice of such violation, or

(e)conviction of a felony or crime involving moral turpitude.

All determinations of Cause hereunder shall be made by the Committee and shall be binding for all purposes hereunder.

You acknowledge and agree that the foregoing definitions of “Change in Control,” “Cause,” and “For Good Reason” are subject to amendment from time to time in relevant Kroger plan documents and that if, as of a given time, the definitions of “Change in Control,” “Cause,” or “Good Reason” have been amended in relevant Kroger plan documents and differs from the ones in this Agreement, those amended definitions shall supersede, take the place of and be construed and deemed to supersede and take the place of the definitions of “Change of Control,” “Cause,” or “Good Reason” contained within this Agreement. You will, in the event of such an amendment, be informed of the amendment.

5.For purposes of this Agreement, a Retirement will be deemed to occur if your employment by or service to Kroger voluntarily terminates after reaching age 60 with at least ten years of service at Kroger and provided that you are within the employment of or are a director providing service to Kroger on the first anniversary of the date of grant, and provided it is on terms deemed satisfactory to the Committee in its sole discretion.

6.This Agreement does not give you any right of continued employment by or to continue to provide service to Kroger or its subsidiaries. It does not affect your right or our right to terminate your employment or service at any time.

7.The restrictions will lapse on the later to occur of (i) the date on which you formally accept this Agreement in the manner that we advise you in writing, and (ii) the passage of the period of time, known as the vesting period, as follows:

Annual Anniversary of Date of GrantYou Are Vested In:

1st33% of the shares

2nd33% of the shares

3rd34% of the shares

After the restrictions have lapsed, the shares thereafter no longer will be subject to the restrictions, and any new certificate issued to you or your representative will be free of the foregoing legend.

8.For purposes of this Agreement, the fair market value of a share of common stock is the amount determined pursuant to a reasonable method adopted by the Committee. If no sales are made on that date, the Committee will use the most recent prior date for which sales are reported.

9.You or your representative will be responsible to satisfy all tax obligations, if any, prior to the lapsing of the restrictions. If you or your representative do not satisfy those obligations through a cash payment to our stock option administrator or as we otherwise direct, on or before the date on which the restrictions lapse, we are authorized and directed to retain that number of shares with a fair market value, as defined in the prospectus for the Plan and this Agreement, equal to the tax obligations due, on the date of the release. You or your representative will remain liable for any tax obligations remaining in excess of the amounts so withheld.

10.Any shares to be issued under this Agreement, at our election, may be issued in certificate form or may be maintained in book-entry form and not represented by a certificate. Shares may be issued directly in your name or in the name of a designated agent or plan administrator on your behalf.

11.If your employment terminates due to Retirement, notwithstanding anything contained in Paragraph 3 to the contrary, in the event that while this Agreement is outstanding you provide services as an employee, director, consultant, agent or otherwise (professionally engaged in any respect – directly or indirectly) to or with any person, company or entity engaged in any business (whether brick-and-mortar or online) that substantially sells grocery products at retail or provides grocery delivery services (including, without limitation, mass merchants, club stores, dollar stores and convenience stores that do so), if such operator, company, person or entity engages in any such business activity at, from or to any location within fifty miles of any location in United States at, from or to which Kroger conducts such business activity, this Agreement expires and any shares for which the restrictions have not then lapsed are immediately forfeited.

12.If your employment terminates due to Retirement, notwithstanding anything contained in Paragraph 3 to the contrary, in the event that while this Agreement is outstanding you, either on your own behalf or on behalf of any person, company or entity: (a) solicit or endeavor to solicit or entice away from employment or engagement with the Company any employee of the Company, or discourage from being or becoming employed by the Company any person whom you know or reasonably should know is an employee or prospective employee of the Company; or (b) employ, procure or in any way arrange or attempt to arrange for another person, company or entity to employ or engage any such person, this Agreement expires and any shares for which the restrictions have not then lapsed are immediately forfeited.

13.Notwithstanding anything contained in Paragraph 3 to the contrary, during your employment or thereafter, you or anyone acting at your behest or on your behalf shall not in any respect divulge or disclose in any way to any third party any Kroger trade secrets, business plans, strategies or policies, financial or marketing information, sales or market share information, vendor or supplier information, contractual information, or other confidential company information of any kind whatsoever (that is, material business-related information not already disclosed by the company, or any other material non-public company information). In the event of a violation of the foregoing provision, this Agreement expires and any shares for which the restrictions have not lapsed are forfeited. You further acknowledge and agree that the foregoing expiration and forfeiture is not the exclusive or sole consequence or remedy in the event of a divulgence or disclosure as described above in this Paragraph but rather one among others, and that in addition to the foregoing Kroger fully reserves and retains the right to pursue all other remedies available or potentially available to it as a matter of law or equity.

14.You acknowledge and agree, as a condition of the grant of Restricted Stock under this Agreement, that you may not and shall not, while this Agreement is outstanding and for a period of twelve months following the separation of your employment with Kroger for whatever reason, be employed by or be contractually or otherwise professionally engaged in any business (directly or indirectly) with any grocery or supermarket operator, or with any other company, person or entity engaged in any business (whether brick-and-mortar or online) that substantially sells grocery products at retail or provides grocery delivery services (including, without limitation, mass merchants, club stores, dollar stores, drug stores and convenience stores that do so), if such operator, company, person or entity engages in any such business activity at, from or to any location within fifty miles of any location in the United States of America at, from or to which Kroger conducts such business activity.

15.You acknowledge and agree, as a condition of the grant of Restricted Stock under this Agreement, that you may not and shall not, while this Agreement is outstanding and for a period of twelve months following the separation of your employment with Kroger, either on your own behalf or on behalf of any company, person or entity: (a) solicit or endeavor to solicit or entice away from employment or engagement with Kroger any employee of Kroger, or discourage from being or becoming employed by Kroger any person whom you know or reasonably should know is an employee or prospective employee of Kroger; or (b) employ, procure or in any way arrange or attempt to arrange for another company, person or entity to employ or engage any such person.

16.You acknowledge and agree that the restrictions contained within the two sections immediately preceding this one are separate and distinct, are to be construed separately from one another, are reasonable with respect to their duration, scope and application for the protection of the legitimate business interests of Kroger and its intellectual property, confidential information and goodwill, and will not prevent or significantly interfere with your ability to pursue and secure gainful employment or professional engagement or livelihood. However, in the event that any such restriction were ruled to be void or unenforceable as written but valid and enforceable if some part or parts of it were deleted, modified or limited in scope or duration, you agree that such restriction shall apply with such deletions, modifications or limitations as may be necessary to make it valid and effective.

17.This Agreement is governed by the laws of the state of Ohio.

The parties have executed this Agreement on the date of grant set forth above.


	The Kroger Co.

	By:
		Gregory Foran




		(“you”)


		< Participant’s Name>

stock option agreement

Exhibit 10.25

This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.

The date of this document is <Date of Grant>.

The Kroger Co., an Ohio corporation with its principal place of business at Cincinnati, Ohio, (“we” or “us”) has adopted a Long-Term Incentive Plan for employees and directors of Kroger and its subsidiaries ("Kroger"). The plan is administered by the Committee as defined in the plan. The Committee determines the employees and directors who are granted awards and the types and amounts of awards.

The plan provides that the terms of grants are determined by the Committee and will be set forth in this Agreement.

The Committee has decided to grant nonqualified stock options to purchase <Number of Shares Granted> Kroger common shares to <Name of Participant> (“you”) on the date of this document <Date of Grant> (the “date of grant”).

In consideration of the services you have provided and that you will provide, we grant you the option to purchase Kroger common shares, subject to the terms of the plan and the following specific terms and conditions:

1.The option price of $<Grant Price> is the Fair Market Value of a Kroger common share on the date of grant of the option. Fair Market Value for purposes of establishing the option price is the closing price of Kroger common shares reported on the date of grant on the New York Stock Exchange. For all other purposes, Fair Market Value of a common share is the amount determined pursuant to a reasonable method adopted by the Committee. If no sales are made on that date, the Committee will use the most recent prior date for which sales are reported.

2.Except as otherwise provided in Paragraph 7 or Paragraph 8 below, you have no right to exercise any part of this option until the later of (i) your formal acceptance of this Agreement in the manner that we have advised you in writing, and (ii) the passage of the period of time, known as the vesting period, as follows:

Annual Anniversary of Date of GrantYou Are Vested In:Expiration Date

1^st^ 33% of the options ExpireDate

2^nd^ 33% of the options ExpireDate

3^rd^ 34% of the options ExpireDate

If your employment by or service to Kroger is terminated prior to this option becoming exercisable, other than as set forth in Paragraph 7, all rights under this Agreement will terminate.

3.You cannot transfer this option except by will or the laws of descent and distribution. It is exercisable, during your lifetime, only by you, or, in the event of legal disability, by your legal representative.

4.You are entitled to the privileges of share ownership only as to those shares actually purchased by you under this Agreement.

5.If you want to exercise all or any part of this option, you must make the election in writing. You must deliver your notice of election, this Agreement, and cash payment for your shares to: Stock Option Administrator, The Kroger Co., 1014 Vine Street, Cincinnati, Ohio 45202. The Committee can

establish any other place or method for delivery of stock option exercises, including electronic means directly with us or our designated administrator. We will notify you in advance of any alternate place or method of delivery of stock option exercises. No shares will be delivered to you until the full option price per share for the number of shares then exercised is paid. In addition to cash, you may pay the exercise price by delivering Kroger common shares, fully endorsed and containing a signature guaranty. Any shares delivered by you will be valued at the Fair Market Value, as described in Paragraph 1 of this Agreement, on the date of exercise of the option. You must have owned those shares for at least six months. The Committee can increase this required holding period for up to two years. Under certain circumstances, unless prohibited by law, you also can elect to have a portion of the shares issuable upon exercise sold in order to satisfy the exercise price and any taxes that must be withheld. You can obtain information on how to accomplish this, along with other forms of cashless exercise, from your human resources office.

6.You must pay all withholding tax or liabilities prior to issuance of shares.

7.Except as otherwise provided in Paragraph 13, 14 and 15, if your employment by or service to Kroger voluntarily terminates after reaching age 60 with at least ten years of service at Kroger and provided that you are within the employment of or are a director providing service to Kroger on the first anniversary of the date of grant, and provided it is on terms deemed satisfactory to the Committee in its sole discretion (“Retirement”), your options will continue to vest as shown in paragraph 2 of this Agreement and you will be permitted to exercise your option throughout the remaining term. “Terms deemed satisfactory to the Committee” will include but not be limited to a retirement date and leadership transition plan acceptable to both you and Kroger. If you die or become disabled, as determined by us, your option will become exercisable and your personal representative will be permitted to exercise your option throughout the remaining term. If you leave Kroger’s employ or cease providing services as a director to Kroger for any other reason, this option expires. If any portion of the option is exercisable prior to that expiration, you or your personal representative have one year or the remainder of the ten year term, whichever is shorter, to exercise the option.

8.This option becomes immediately exercisable in full, but not in part, if at any time after the date of this Agreement, your employment is terminated without Cause or by you for Good Reason within two years after a Change in Control of Kroger. For purposes of this paragraph 8 only, the following definitions shall apply:

(i)	“Change in Control” means:

their ownership of such securities immediately prior to such Business Combination;

(d)the approval by the shareholders of Kroger of a complete liquidation or dissolution of the Company.

(ii)	“Affiliate” means a corporation, partnership, business trust, limited liability company, or other form of business organization at least 50% of the total combined voting power of all classes of stock or other equity interests of which is owned by Kroger, either directly or indirectly;

(iii)	“Kroger” and “Company” means the parent company, The Kroger Co.;

(iv)	“Person” means an individual, corporation, partnership, association, trust, unincorporated organization, limited liability company or other legal entity. All references to Person shall include an individual Person or group (as defined in Rule 13d-5 under the Exchange Act) of persons;

(v)	“Board” means the Board of Directors of Kroger;

(vi)	“Good Reason” means:

(a)without your consent

(i)A material diminution in your base compensation;

(ii)A material diminution in your authority, duties, or responsibilities;

(b)You shall not have Good Reason for a termination of employment unless:

(i)the condition constituting Good Reason occurs during the two years following a Change in Control;

(iii)you incur a termination of employment no later than 120 days following the end of the two years after a Change in Control.

(vii)	“Cause” means your:

(a)failure to substantially perform your duties (other than by reason of disability) with respect to Kroger or an Affiliate,

(b)breach of fiduciary duty to Kroger or an Affiliate,

(c)dishonesty, fraud, alcohol or illegal drug abuse, or misconduct with respect to the business or affairs of Kroger or an Affiliate,

(d)willful violation of the policies of Kroger or an Affiliate after receiving written notice of such violation, or

(e)conviction of a felony or crime involving moral turpitude.

All determinations of Cause hereunder shall be made by the Committee and shall be binding for all purposes hereunder.

You acknowledge and agree that the foregoing definitions of “Change in Control,” “Cause,” and “For Good Reason” are subject to amendment from time to time in relevant Kroger plan documents and that if, as of a given time, the definitions of “Change in Control,” “Cause,” or “For Good Reason” have been amended in relevant Kroger plan documents and differ from the one in this Agreement, those amended definitions shall supersede, take the place of and be construed and deemed to supersede and take the place of the definitions of “Change of Control,” “Cause,” or “for Good Reason” contained within this Agreement. You will, in the event of such an amendment, be informed of the amendment.

9.This Agreement does not give you any right of continued employment by or to continue to provide service to Kroger. It does not affect your right or Kroger’s right, to terminate your employment or service at any time.

10.In the event of any stock splits, stock dividends, or reverse stock splits, the number of shares and the price per share set forth in this Agreement will be adjusted proportionately.

11.Unless sooner terminated under one or more of the terms and conditions in this Agreement, this option will remain in force for a term of ten years from the date of this Agreement, and it must be exercised by the holder on or before that date. In the event that the option expires on a day that is not a business day, it must be exercised on or before the last business day prior to the expiration date.

12.The option evidenced by this Agreement and the exercise of the option are subject to the terms and conditions of the plan. This option is subject to any rules and regulations adopted by the Committee.

13.If your employment terminates due to Retirement, notwithstanding anything contained in

Paragraph 7 to the contrary, in the event that while this Agreement is outstanding you provide services as an employee, director, consultant, agent or otherwise (professionally engaged in any respect – directly or indirectly) to or with any person, company or entity engaged in any business (whether brick-and-mortar or online) that substantially sells grocery products at retail or provides grocery delivery services (including, without limitation, mass merchants, club stores, dollar stores and convenience stores that do so), if such operator, company, person or entity engages in any such business activity at, from or to any location within fifty miles of any location in United States at, from or to which Kroger conducts such business activity, this Agreement expires and any unvested portion of this option shall immediately expire. If any portion of the option is vested and exercisable prior to that expiration, you or your personal representative have one year or the remainder of the ten year term, whichever is shorter, to exercise such vested portion of the option.

14.If your employment terminates due to Retirement, notwithstanding anything contained in Paragraph 7 to the contrary, in the event that while this Agreement is outstanding you, either on your own behalf or on behalf of any person, company or entity: (a) solicit or endeavor to solicit or entice away from employment or engagement with the Company any employee of the Company, or discourage from being or becoming employed by the Company any person whom you know or reasonably should know is an employee or prospective employee of the Company; or (b) employ, procure or in any way arrange or attempt to arrange for another person, company or entity to employ or engage any such person, this Agreement expires and any shares for which the restrictions have not then lapsed are immediately forfeited.

15.Notwithstanding anything contained in Paragraph 7 to the contrary, during your employment or thereafter, you or anyone acting at your behest or on your behalf shall not in any respect divulge or disclose in any way to any third party any Kroger trade secrets, business plans, strategies or policies, financial or marketing information, sales or market share information, vendor or supplier information, contractual information, or other confidential company information of any kind whatsoever (that is, material business-related information not already disclosed by the company, or any other material non-public company information). In the event of a violation of the foregoing provision, this Agreement expires and any unvested portion of this option shall immediately expire. If any portion of the option is vested and exercisable prior to that expiration, you or your personal representative have one year or the remainder of the ten year term, whichever is shorter, to exercise such vested portion of the option.

You further acknowledge and agree that the foregoing expiration and forfeiture is not the exclusive or sole consequence or remedy in the event of a divulgence or disclosure as described above in this Paragraph but rather one among others, and that in addition to the foregoing Kroger fully reserves and retains the right to pursue all other remedies available or potentially available to it as a matter of law or equity.

16.You acknowledge and agree, as a condition of the grant of stock options under this Agreement, that you may not and shall not, during your employment and for a period of twelve months following the separation of your employment with Kroger for whatever reason, be employed by or be contractually or otherwise professionally engaged in any respect (directly or indirectly) with any grocery or supermarket operator, or with any other company, person or entity engaged in any business (whether brick-and-mortar or online) that substantially sells grocery products at retail or provides grocery delivery services (including, without limitation, mass merchants, club stores, dollar stores, drug stores and convenience stores that do so), if such operator, company, person or entity engages in any such business activity at, from or to any location within fifty miles of any location in the United States of America at, from or to which Kroger conducts such business activity.

17.You acknowledge and agree, as a condition of the grant of stock options under this Agreement, that you may not and shall not, during your employment and for a period of twelve months following the separation of your employment with Kroger, either on your own behalf or on behalf of any

company, person or entity: (a) solicit or endeavor to solicit or entice away from employment or engagement with Kroger any employee of Kroger, or discourage from being or becoming employed by Kroger any person whom you know or reasonably should know is an employee or prospective employee of Kroger; or (b) employ, procure or in any way arrange or attempt to arrange for another company, person or entity to employ or engage any such person.

18.You acknowledge and agree that the restrictions contained within the two paragraphs immediately preceding this one are separate and distinct, are to be construed separately from one another, are reasonable with respect to their duration, scope and application for the protection of the legitimate business interests of Kroger and its intellectual property, confidential information and goodwill, and will not prevent or significantly interfere with your ability to pursue and secure gainful employment or professional engagement or livelihood. However, in the event that any such restriction were ruled to be void or unenforceable as written but valid and enforceable if some part or parts of it were deleted, modified or limited in scope or duration, you agree that such restriction shall apply with such deletions, modifications or limitations as may be necessary to make it valid and effective.

19.This Agreement is governed by the laws of the state of Ohio.

The parties have executed this Agreement on the date of grant set forth above.


	The Kroger Co.

	By:
		Gregory Foran




		(“you”)


		<Name>

EXHIBIT 21.1

SUBSIDIARIES OF THE KROGER CO.

84.51 LLC [Ohio]

84.51 HQ Building Company, LLC [Ohio]

Alpha Beta Company [California]

Also Doing Business As:

Food 4 Less

Ralphs

Ansonborough Square Investors I, LLC [Delaware]

Ansonborough Square Retail, LLC [South Carolina]

Bay Area Warehouse Stores, Inc. [California]

Also Doing Business As:

Food 4 Less

Foods Co.

Beech Tree Holdings, LLC [Delaware]

Bleecker Ventures LLC [New York]

Bluefield Beverage Company [Ohio]

Box Cutter, Inc. [New York]

Cala Co. [Delaware]

Cala Foods, Inc. [California]

Also Doing Business As:

Foods Co.

CB&S Advertising Agency, Inc. [Oregon]

Cheeses of All Nations, Inc. [New York]

Country Oven, Inc. [Ohio]

Crawford Stores, Inc. [California]

Creedmoor Retail, LLC [North Carolina]

Dillon Companies, LLC [Kansas]

Also Doing Business As:

Baker’s

Baker's Supermarkets

City Market

City Market Fuel Center

City Market Pharmacy

Dillons

Dillons Marketplace

Dillons Pharmacy

Gerbes Pharmacy

Gerbes Supermarkets

Inter-American Products

King Soopers

King Soopers Fresh Fare

King Soopers Fuel Center

King Soopers Marketplace

Peyton’s Fountain

Dillon Real Estate Co., Inc. [Kansas]

Distribution Trucking Company [Oregon]

Dotto, Inc. [Indiana]

Edgewood Plaza Holdings, LLC [Ohio]

Embassy International, Inc. [Ohio]

FM, Inc. [Utah]

[ ] Brackets indicate state or country of incorporation or organization and do not form part of corporate name.

FMJ, Inc. [Delaware]

Also Doing Business As:

FMJ Ecommerce

Fred Meyer Jewelers Mail Order

fredmeyerjewelers.com

littmanjewelers.com

Food 4 Less GM, Inc. [California]

Food 4 Less Holdings, Inc. [Delaware]

Food 4 Less Merchandising, Inc. [California]

Food 4 Less of California, Inc. [California]

Also Doing Business As:

Food 4 Less

Foods Co.

Food 4 Less of Southern California, Inc. [Delaware]

Fred Meyer, Inc. [Delaware]

Fred Meyer Jewelers, Inc. [California]

Also Doing Business As:

Fred Meyer Jewelers

Littman Jewelers

Fred Meyer Stores, Inc. [Ohio]

Also Doing Business As:

Fred Meyer Cork & Tap

Fred Meyer Fuel Center

Fred Meyer Fuel Stop

Fred Meyer Pharmacy

Fred Meyer

Inter-American Products

Peyton’s Phoenix

QFC

QFC Cork & Tap

QFC Fuel Station/Center

QFC Fuel Stop

Q20 Pub

Quality Food Centers

Swan Island Dairy

Fresh Distribution Services LLC [Ohio]

Glasswing Labs LLC [Ohio]

Glendale/Goodwin Realty I, LLC [Ohio]

Grubstake Investments, LLC [Oregon]

Harris Teeter, LLC [North Carolina]

Also Doing Business As:

Harris Teeter

Harris Teeter Delivery Service

Harris Teeter Fuel Center

Harris Teeter Pharmacy

Harris Teeter Properties, LLC [North Carolina]

Harris-Teeter Services, Inc. [North Carolina]

Harris Teeter Supermarkets, Inc. [North Carolina]

Healthy Options Inc. [Delaware]

Also Doing Business As:

Columbus Central Fill

Postal Prescription Services

Henpil, Inc. [Texas]

Hood-Clayton Logistics LLC [Georgia]

HT Carolina Colours, LLC [North Carolina]

[ ] Brackets indicate state or country of incorporation or organization and do not form part of corporate name.

HT Fuel DE, LLC [Delaware]

HT Fuel NC, LLC [North Carolina]

HT Fuel SC, LLC [South Carolina]

HT Fuel VA, LLC [Virginia]

HT Glebe Road Phase 1, LLC [North Carolina]

HT Glebe Road Phase 2, LLC [North Carolina]

HT Glebe Road Phase 3, LLC [North Carolina]

HTGBD, LLC [North Carolina]

HTP Bluffton, LLC [North Carolina]

HTP Plaza, LLC [North Carolina]

HTP Relo, LLC [North Carolina]

HTPS, LLC [North Carolina]

HTTAH, LLC [North Carolina]

Hughes Markets, Inc. [California]

Also Doing Business As:

Ralphs

Hughes Realty, Inc. [California]

Inter-American Foods, Inc. [Ohio]

Inter American Products, Inc. [Ohio]

IRP, LLC [Wisconsin]

I.T.A., Inc. [Wisconsin]

ITAC 119, LLC [North Carolina]

ITAC 265, LLC [North Carolina]

Jondex Corp. [Wisconsin]

Jubilee Carolina, LLC [North Carolina]

J.V. Distributing, Inc. [Michigan]

KCDE-2 LLC [Ohio]

KCDE-3 LLC [Ohio]

KCDE-4 LLC [Ohio]

KCDE-5 LLC [Ohio]

Kee Trans, Inc. [Wisconsin]

KGO LLC [Ohio]

Kiosk Medicine Kentucky, LLC [Kentucky]

Also Doing Business As:

The Little Clinic

Kirkpatrick West Retail, LLC [Virginia]

KPF, LLC [Delaware]

KPS, LLC [Ohio]

KRGP LLC [Ohio]

Also Doing Business As:

Kitchen 1883

KRLP Inc. [Ohio]

The Kroger Co. of Michigan [Michigan]

Also Doing Business As:

Inter-American Products

Kessel Food Markets

Kessel Pharmacies

Kroger

Kroger Fresh Fare

Kroger Marketplace

Michigan Dairy

Kroger Community Development Entity, LLC [Ohio]

Kroger Dedicated Logistics Co. [Ohio]

Also Doing Business As:

KDL

[ ] Brackets indicate state or country of incorporation or organization and do not form part of corporate name.

Kroger Fulfillment Network LLC [Ohio]

Kroger G.O. LLC [Ohio]

Kroger HQ LLC [Ohio]

Kroger Health Navigator LLC [Ohio]

Kroger Limited Partnership I [Ohio]

Also Doing Business As:

Chef’s Choice Catering

Foods Plus

Gene Maddy Drugs

Inter-American Products

JayC Food Stores

Jeffersonville Central Fill

Kentucky Distribution Center

Kroger

Kroger Fresh Fare

Kroger Marketplace

Kroger Pharmacy

Pay Less Super Markets

Peyton's Southeastern

Ruler Foods

Kroger Limited Partnership II [Ohio]

Also Doing Business As:

Country Oven Bakery

Crossroad Farms Dairy

Inter-American Products

K. B. Specialty Foods

Kenlake Foods

Pace Dairy of Indiana

Peyton's Northern

Winchester Farms Dairy

Kroger LM Real Estate Holdings, LLC [Ohio]

Kroger Management Co. [Michigan]

Kroger Management – NMTC Athens I, LLC [Ohio]

Kroger Management – NMTC Portsmouth I, LLC [Ohio]

Kroger MC Holdings, LLC [Ohio]

Kroger MTL Management, LLC [Ohio]

Kroger NMTC Fremont, LLC [Ohio]

Kroger Opportunity Fund I, Inc. [Ohio]

Kroger OZ1 Inc. [Ohio]

Kroger OZ2 Inc. [Ohio]

Kroger OZ3 Inc. [Ohio]

Kroger OZ1 LLC [Ohio]

Kroger OZ2 LLC [Ohio]

Kroger OZ3 LLC [Ohio]

Kroger Prescription Plans, Inc. [Ohio]

Kroger Texas L.P. [Ohio]

Also Doing Business As:

America's Beverage Company

Inter-American Products

Kroger

Kroger Fresh Fare

Kroger Marketplace

Kroger Pharmacy

Vandervoort Dairy Foods Company

KV Anderson, LLC [Delaware]

[ ] Brackets indicate state or country of incorporation or organization and do not form part of corporate name.

LCGP3 Home Cooking, Inc. [Delaware]

The Little Clinic LLC [Delaware]

The Little Clinic of Arizona LLC [Delaware]

The Little Clinic of Colorado LLC [Delaware]

The Little Clinic of IN LLC [Delaware]

The Little Clinic of Kansas LLC [Delaware]

The Little Clinic of Mississippi LLC [Delaware]

The Little Clinic of Ohio LLC [Ohio]

The Little Clinic of Tennessee LLC [Delaware]

The Little Clinic of TX LLC [Delaware]

The Little Clinic of VA LLC [Delaware]

Local Mkt LLC [Ohio]

Main & Vine LLC [Ohio]

Main Street Spirits LLC [Ohio]

Matthews Property 1, LLC [North Carolina]

Mega Marts, LLC [Wisconsin]

Also Doing Business As:

Metro Market

Pick ‘n Save

Michigan Dairy, L.L.C. [Michigan]

Murray’s Cheese LLC [Ohio]

Also Doing Business As:

Murray’s Cheese

Murray’s LIC LLC [New York]

Also Doing Business As:

Murray’s Cheese Bar

Murray’s Table LLC [New York]

Also Doing Business As:

Murray’s Table

Pace Dairy Foods Company [Ohio]

Paramount Logistics, LLC [Ohio]

Parkway Shopping Center LLC [Colorado]

Pay Less Super Markets, Inc. [Indiana]

Peyton's-Southeastern, Inc. [Tennessee]

Also Doing Business As:

Peyton's Mid-South Company

Plum Labs LLC [Ohio]

Pontiac Foods, Inc. [South Carolina]

Queen City Assurance, Inc. [Vermont]

Ralphs Grocery Company [Ohio]

Also Doing Business As:

Food 4 Less

Food 4 Less Midwest

Foods Co.

Inter-American Products

Ralphs

Ralphs Fresh Fare

RBF, LLC [Wisconsin]

Relish Labs LLC [Delaware]

Also Doing Business As:

Home Chef

RGC Southeast Properties LLC [Ohio]

Rocket Newco, Inc. [Texas]

Roundy’s Acquisition Corp. [Delaware]

[ ] Brackets indicate state or country of incorporation or organization and do not form part of corporate name.

Roundy’s Illinois, LLC [Wisconsin]

Also Doing Business As:

Mariano’s

Roundy’s, Inc. [Delaware]

Roundy’s Supermarkets, Inc. [Wisconsin]

Also Doing Business As:

Mariano’s Pharmacy

RCK Foods

Second Story, Inc. [Washington]

Shop-Rite, LLC [Wisconsin]

Also Doing Business As:

Metro Market

Pick ‘n Save

Smith’s Beverage of Wyoming, Inc. [Wyoming]

Smith’s Food & Drug Centers, Inc. [Ohio]

Also Doing Business As:

Fry’s Food Stores

Fry’s Marketplace

Fry’s Mercado

Inter-American Products

Smith’s Express

Smith’s Food & Drug

Smith’s Fuel Centers

Smith’s Marketplace

Stallings Investors I, LLC [North Carolina]

Sunrise R&D Holdings, LLC [Ohio]

Sunrise Technology LLC [Ohio]

TLC Corporate Services LLC [Delaware]

TLC of Georgia LLC [Delaware]

Also Doing Business As:

The Little Clinic

Topvalco, Inc. [Ohio]

Ultimate Mart, LLC [Wisconsin]

Also Doing Business As:

Metro Market

Pick ‘n Save

Ultra Mart Foods, LLC [Wisconsin]

Also Doing Business As:

Metro Market

Pick ‘n Save

Vine Court Assurance Incorporated [Vermont]

WA KPS LLC [Ohio]

Woodmont Holdings, LLC [North Carolina]

[ ] Brackets indicate state or country of incorporation or organization and do not form part of corporate name.

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-265130) and Form S-8 (Nos. 333-266030, 333-206531, 333-197711, 333-185446, and 033-55501) of The Kroger Co. of our report dated March 31, 2026 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/PricewaterhouseCoopers LLP

Cincinnati, Ohio

March 31, 2026 1

Exhibit 24.1 POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each of the undersigned directors of THE KROGER CO. (the “Company”) hereby makes, constitutes and appoints George H. Vincent and Stacey M. Heiser, or either of them, his or her true and lawful attorneys-in-fact to sign and execute for and on his or her behalf the Company’s annual report on Form 10-K, and any and all amendments thereto, to be filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, in such form as they, or either of them, may approve and to do any and all other acts which said attorneys-in-fact, or either of them, may deem necessary or desirable to enable the Company to comply with said Act or the rules and regulations thereunder.

IN WITNESS WHEREOF, the undersigned directors have hereunto set their hands as of the 11^th^ day of March 2026.

/s/ Nora A. Aufreiter	/s/ Clyde R. Moore
Nora A. Aufreiter	Clyde R. Moore
/s/ Kevin M. Brown	/s/ Ronald L. Sargent
Kevin M. Brown	Ronald L. Sargent
/s/ Elaine L Chao	/s/ J. Amanda Sourry Knox
Elaine L. Chao	J. Amanda Sourry Knox
/s/ Anne Gates	/s/ Mark S. Sutton
Anne Gates	Mark S. Sutton
/s/ Karen M. Hoguet	/s/ Ashok Vemuri
Karen M. Hoguet	Ashok Vemuri

EXHIBIT 31.1

CERTIFICATION

I, Ronald L. Sargent, certify that:

1.	I have reviewed this annual report on Form 10-K of The Kroger Co.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: March 31, 2026
	/s/ Ronald L. Sargent
	Ronald L. Sargent
	Chairman of the Board
	(principal executive officer)

EXHIBIT 31.2

CERTIFICATION

I, David J. C. Kennerley, certify that:

1.	I have reviewed this annual report on Form 10-K of The Kroger Co.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: March 31, 2026
	/s/ David J.C. Kennerley
	David J. C. Kennerley
	Executive Vice President and Chief Financial Officer
	(principal financial officer)

EXHIBIT 32.1

CERTIFICATIONS

NOTE: The referenced officers, based on their knowledge, furnish the following certification, pursuant to 18 U.S.C. §1350.

We, Ronald L. Sargent, Chairman of the Board, and David J.C. Kennerley, Executive Vice President and Chief Financial Officer, of The Kroger Co. (the “Company”), do hereby certify in accordance with 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Annual Report on Form 10-K of the Company for the period ending January 31, 2026 (the “Periodic Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §78m or 78o(d)); and

2.	The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: March 31, 2026	/s/ Ronald L. Sargent
	Ronald L. Sargent
	Chairman of the Board<br><br>(principal executive officer)

	/s/ David J.C. Kennerley
	David J.C. Kennerley
	Executive Vice President and Chief Financial Officer<br><br>(principal financial officer)

A signed original of this written statement as required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to The Kroger Co., and will be retained by The Kroger Co. and furnished to the SEC or its staff upon request. 1