Morningstar

The Kroger Co KR

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Stock XNYS Rating as of
$56.52 +1.05 (1.89%)
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As of Delayed Price Closed

Company Report

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Intense Retail Competition Likely to Put Downward Pressure on Kroger's Margins

Noah Rohr

With over 2,700 locations across the United States and a portfolio of over 20 different banners, no-moat Kroger is one of the nation’s leading grocery retailers. It built its vast footprint through expansion of its namesake banner along with numerous acquisitions of competing chains, giving it an ingrained presence in many US communities. Considering this, an immense top line (eclipsing $150 billion in fiscal 2023) that brings a strong standing with suppliers, and its loyalty membership program, Kroger’s competitive standing appears enviable at first glance.

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Price vs Fair Value

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KR is trading within a range we consider fairly valued.
Price
$56.52
Fair Value
$25.00
Uncertainty
Low
1-Star Price
$97.33
5-Star Price
$68.10
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Kroger’s loyalty membership program allows the firm to personalize its promotional activity, driving traffic to its stores.

Bears

The unit economics of digital order fulfillment are less favorable than traditional brick-and-mortar shopping and are likely to weigh on Kroger’s margins.

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News

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Trading Information

Previous Close Price
$55.47
Day Range
$55.45–56.82
52-Week Range
$42.10–58.34
Bid/Ask
$55.92 / $57.04
Market Cap
$40.89 Bil
Volume/Avg
3.3 Mil / 4.4 Mil

Key Statistics

Price/Earnings (Normalized)
12.19
Price/Sales
0.27
Dividend Yield (Trailing)
2.11%
Dividend Yield (Forward)
2.26%
Total Yield
2.16%

Company Profile

Kroger is one of the largest grocery retailers in the United States with more than 2,700 stores across a portfolio of over 20 supermarket banners. The company boasts an ingrained presence in US communities, citing that it is a top-two grocer in most of its major market areas. Over one fourth of Kroger’s roughly $110 billion in nonperishable and fresh food sales (about 75% of revenue) stems from its private-label portfolio, of which the company manufactures about 30% of units via its 33 food production plants. The firm also operates fuel stations and pharmacies at 60% and 80% of its locations, respectively.
Sector
Consumer Defensive
Industry
Grocery Stores
Stock Style Box
Mid Value
Total Number of Employees
414,000
Website
https://www.thekrogerco.com

Competitors

Valuation

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Metric
KR
TGT
WMT
Price/Earnings (Normalized)
 12.1916.0333.54
Price/Book Value
 3.264.987.59
Price/Sales
 0.270.670.97
Price/Cash Flow
 5.659.0218.41
Price/Earnings
KR
TGT
WMT

Financial Strength

Metric
KR
TGT
WMT
Quick Ratio
 0.370.170.18
Current Ratio
 0.870.900.80
Interest Coverage
 9.9514.458.64
Quick Ratio
KR
TGT
WMT

Profitability

Metric
KR
TGT
WMT
Return on Assets (Normalized)
 —8.54%6.41%
Return on Equity (Normalized)
 —35.60%19.99%
Return on Invested Capital (Normalized)
 —15.59%11.82%
Return on Assets
KR
TGT
WMT

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