The Kroger Co. announced plans to close approximately 60 stores over the next 18 months as part of a broader strategy to streamline operations and reinvest in core business areas. The decision came alongside the company’s release of strong first-quarter 2025 financial results.
In its earnings report, Kroger revealed it had recorded a $100 million impairment charge related to the upcoming closures. While the specific store locations were not disclosed, company officials emphasized that the move is intended to generate modest financial benefits, which will be redirected toward enhancing customer experience. Kroger added that it is committed to reinvesting these savings back into the customer experience, and as a result, this will not impact full-year guidance. Kroger will offer roles in other stores to all associates currently employed at affected stores, the company said.
“Kroger delivered solid first quarter results, with strong sales led by pharmacy, e-commerce and fresh,” says Ron Sargent, chairman and CEO for Kroger. “We made good progress in streamlining our priorities, enhancing customer focus and running great stores to improve the shopping experience.
“Our commitment to driving growth in our core business and moving with speed positions us well for the future. We are confident in our ability to build on our momentum, deliver value for customers, invest in associates and generate attractive returns for shareholders,” Sargent says.
First quarter highlights
- Identical sales without fuel increased 3.2%
- Operating profit of $1,322 million; EPS of $1.29
- Adjusted FIFO operating profit of $1,518 million and adjusted EPS of $1.49
- E-commerce sales increased 15%
Kroger expects to continue to generate strong free cash flow and remains committed to investing in the business to drive long-term sustainable net earnings growth, as well as maintaining its current investment grade debt rating. The company says it expects to continue to pay its quarterly dividend and expects this to increase over time, subject to board approval.
CFO David Kennerley expressed optimism: “Our strong sales results and positive momentum give us confidence to raise our identical sales without fuel guidance, to a new range of 2.25% to 3.25%. While first-quarter sales and profitability exceeded our expectations, the macroeconomic environment remains uncertain, and as a result, other elements of our guidance remain unchanged. We continue to believe that our strategy focusing on fresh, our brands and e-commerce will continue to resonate with customers, and our resilient model positions us well to navigate the current environment.”