UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~November~~May 924, ~~2024~~2025

☐	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		(I.R.S. Employer
incorporation or organization)		Identification No.)

1014 Vine Street, Cincinnati, Ohio 45202

(Address of principal executive offices)

(Zip Code)

(513) 762-4000

(Registrant’s telephone number, including area code)

Unchanged

(Former name, former address and former fiscal year, if changed since last report)

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

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 the 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 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, 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

There were ~~723~~661,~~606~~155,~~130~~838 shares of Common Stock ($1 par value) outstanding as of ~~December~~June 1024, ~~2024~~2025.

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements.

THE KROGER CO.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	~~Third~~First Quarter Ended				~~Three Quarters Ended~~
	~~November~~May 924,		~~November~~May 425,		~~November 9,~~		~~November 4,~~
(In millions, except per share amounts)	~~2024~~2025		~~2023~~2024		~~2024~~		~~2023~~
Sales	$	3345,~~634~~118	$	3345,~~957~~269	$	~~112,815~~	$	~~112,975~~

Operating expenses
Merchandise costs, including advertising, warehousing, and transportation, excluding items shown separately below		2534,~~948~~551		2635,~~477~~124		~~87,332~~		~~88,032~~
Operating, general and administrative		57,~~898~~923		57,~~646~~604		~~19,388~~		~~19,974~~
Rent		~~203~~271		~~201~~269		~~672~~		~~671~~
Depreciation and amortization		~~757~~1,051		~~721~~978		~~2,486~~		~~2,396~~

Operating profit		~~828~~1,322		~~912~~1,294		~~2,937~~		~~1,902~~

Other income (expense)
Net interest expense		(86)		(94)		(294)		(341)
Net interest expense (see Note 2)		(199)		(123)
Non-service component of company-sponsored pension plan benefits		3		7		9		24
Non-service component of company-sponsored pension plan (expense) benefits		(1)		4
(Loss) gain on investments		(2019)		2616		~~(125)~~		~~317~~
Gain on the sale of business		79		—		79		—


Net earnings before income tax expense		1,103		1,191
Net earnings before income tax expense		804		851		2,606		1,902


Income tax expense		235		235
Income tax expense		187		204		568		472


Net earnings including noncontrolling interests		868		956
Net earnings including noncontrolling interests		617		647		2,038		1,430
Net income attributable to noncontrolling interests		2		9
Net (loss) income attributable to noncontrolling interests		(1)		1		7		2


Net earnings attributable to The Kroger Co.	$	866	$	947
Net earnings attributable to The Kroger Co.	$	618	$	646	$	2,031	$	1,428


Net earnings attributable to The Kroger Co. per basic common share	$	1.30	$	1.30
Net earnings attributable to The Kroger Co. per basic common share	$	0.85	$	0.89	$	2.79	$	1.97


Average number of common shares used in basic calculation		660		721
Average number of common shares used in basic calculation		723		719		722		718


Net earnings attributable to The Kroger Co. per diluted common share	$	1.29	$	1.29
Net earnings attributable to The Kroger Co. per diluted common share	$	0.84	$	0.88	$	2.77	$	1.95


Average number of common shares used in diluted calculation		664		727
Average number of common shares used in diluted calculation		728		725		728		725

The accompanying notes are an integral part of the Consolidated Financial Statements.

THE KROGER CO.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)


	~~Third~~First Quarter Ended				~~Three Quarters Ended~~
	~~November~~May 924,		~~November~~May 425,		~~November 9,~~		~~November 4,~~
(In millions)	~~2024~~2025		~~2023~~2024		~~2024~~		~~2023~~
Net earnings including noncontrolling interests	$	~~617~~868	$	~~647~~956	$	~~2,038~~	$	~~1,430~~

Other comprehensive income (loss)
Change in pension and other postretirement defined benefit plans, net of income tax(1)		(1)		(3)		(3)		(10)
Change in pension and other postretirement defined benefit plans, net of income tax		(1)		(2)
Unrealized gains and losses on cash flow hedging activities, net of income tax(2)		(50)		121		(103)		317
Unrealized gains and losses on cash flow hedging activities, net of income tax(1)		1		70
Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax(3)		2		1		6		4
Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax(2)		2		2

Total other comprehensive (loss) income		(49)		119		(100)		311
Total other comprehensive income		2		70

Comprehensive income		~~568~~870		~~766~~1,026		~~1,938~~		~~1,741~~
Comprehensive (loss) income attributable to noncontrolling interests		(1)		1		7		2
Comprehensive income attributable to noncontrolling interests		2		9
Comprehensive income attributable to The Kroger Co.	$	~~569~~868	$	~~765~~1,017	$	~~1,931~~	$	~~1,739~~

(1) Amount is net of tax of $(1) for the ~~third~~first quarter of ~~2023.~~2025 ~~Amount is net of tax of $(1) for the first three quarters of 2024~~ and $~~(3)~~21 for the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024.

(2) Amount is net of tax of $~~(14)~~1 for the ~~third quarter of 2024 and $36 for the third quarter of 2023. Amount is net of tax of $(30) for the~~ first ~~three~~ quarters of ~~2024~~2025 and ~~$96 for the first three quarters of 2023~~2024.

(3) Amount is net of tax of $1 for the third quarter of 2023. Amount is net of tax of $1 for the first three quarters of 2024 and $2 for the first three quarters of 2023.

The accompanying notes are an integral part of the Consolidated Financial Statements.

THE KROGER CO.

CONSOLIDATED BALANCE SHEETS

(unaudited)


	~~November~~May 924,		February 31,
(In millions, except par amounts)	~~2024~~2025		~~2024~~2025
ASSETS
Current assets
Cash and temporary cash investments	$	134,~~358~~738	$	13,~~883~~959
Store deposits in-transit		1,~~082~~179		1,~~215~~312
Receivables		2,~~193~~131		2,~~136~~195
FIFO inventory		9,~~960~~464		9,~~414~~442
LIFO reserve		(2,~~375~~444)		(2,~~309~~404)
Prepaid and other current assets		~~807~~697		~~609~~769
Total current assets		2515,~~025~~765		1215,~~948~~273

Property, plant and equipment, net		25,~~698~~829		25,~~230~~703
Operating lease assets		6,~~829~~840		6,~~692~~839
Intangibles, net		~~865~~836		~~899~~834
Goodwill		2,674		2,~~916~~674
Other assets		1,~~327~~304		1,~~820~~293

Total Assets	$	6253,~~418~~248	$	5052,~~505~~616

LIABILITIES
Current liabilities
Current portion of long-term debt including obligations under finance leases	$	~~187~~807	$	~~198~~272
Current portion of operating lease liabilities		~~667~~668		~~670~~599
Accounts payable		10,~~521~~562		10,~~381~~124
Accrued salaries and wages		1,~~185~~209		1,~~323~~330
Other current liabilities		3,~~714~~379		3,~~486~~615
Total current liabilities		16,~~274~~625		1615,~~058~~940

Long-term debt including obligations under finance leases		2217,~~414~~138		1217,~~028~~633
Noncurrent operating lease liabilities		6,~~512~~595		6,~~351~~578
Deferred income taxes		1,~~556~~401		1,~~579~~417
Pension and postretirement benefit obligations		~~371~~381		~~385~~387
Other long-term liabilities		2,~~397~~200		2,~~503~~380

Total Liabilities		4944,~~524~~340		3844,~~904~~335

Commitments and contingencies see Note 5
Commitments and contingencies (see Note 5)

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 2024 and 2023		1,918		1,918
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		43,~~038~~159		3,~~922~~087
Accumulated other comprehensive loss		(~~589~~619)		(~~489~~621)
Accumulated earnings		2829,~~299~~381		2628,~~946~~724
Common shares in treasury, at cost, 1,194 shares in 2024 and 1,198 shares in 2023		(20,766)		(20,682)
Common shares in treasury, at cost, 1,257 shares in 2025 and 1,258 shares in 2024		(24,926)		(24,823)

Total Shareowners’ Equity - The Kroger Co.		128,~~900~~913		118,~~615~~285
Noncontrolling interests		(65)		(144)

Total Equity		128,~~894~~908		118,~~601~~281

Total Liabilities and Equity	$	6253,~~418~~248	$	5052,~~505~~616

The accompanying notes are an integral part of the Consolidated Financial Statements.

THE KROGER CO.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	~~Three~~First ~~Quarters~~Quarter Ended
	~~November~~May 924,		~~November~~May 425,
(In millions)	~~2024~~2025		~~2023~~2024
Cash Flows from Operating Activities:
Net earnings including noncontrolling interests	$	~~2,038~~868	$	~~1,430~~956
Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:
Depreciation and amortization		21,~~486~~051		~~2,396~~978
Operating lease asset amortization		465		472
Asset impairment and store closure charges		108		20
LIFO charge		66		131
Operating lease asset amortization		184		187
Share-based employee compensation		133		124
LIFO charge		40		41
Deferred income taxes		9		(261)
Share-based employee compensation		38		57
Gain on the sale of assets		(8)		(45)
Deferred income taxes		(16)		(64)
Gain on the sale of business		(79)		—
Loss (gain) on investments		19		(16)
Loss (gain) on investments		125		(317)
Other		(37)		(10)
Other		29		120
Changes in operating assets and liabilities:
Store deposits in-transit		~~134~~133		(7011)
Receivables		~~(238)~~47		~~133~~(102)
Inventories		(~~662~~23)		~~(502)~~225
Prepaid and other current assets		(~~204~~52)		45(208)
Accounts payable		~~578~~288		~~991~~622
Accrued expenses		77(243)		(~~387~~327)
Income taxes receivable and payable		2841		~~148~~180
Operating lease liabilities		(~~451~~134)		(~~539~~137)
Other		(~~136~~163)		~~999~~(49)

Net cash provided by operating activities		42,~~390~~149		42,~~868~~342

Cash Flows from Investing Activities:
Payments for property and equipment, including payments for lease buyouts		(31,~~133~~044)		(21,~~907~~304)
Proceeds from sale of assets		~~310~~12		94304
Net proceeds from sale of business		464		—
Other		(7)		(14)
Other		(43)		68

Net cash used by investing activities		(21,~~402~~039)		(21,~~745~~014)

Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt		10,499		—
Payments on long-term debt including obligations under finance leases		(52)		(54)
Payments on long-term debt including obligations under finance leases		(145)		(755)
Dividends paid		(211)		(210)
Dividends paid		(651)		(586)
Proceeds from issuance of capital stock		145		85
Financing fees paid		(116)		—
Treasury stock purchases		(181)		(103)
Proceeds from issuance of capital stock		106		42
Other		(32)		(66)
Treasury stock purchases		(125)		(54)
Other		(81)		(60)

Net cash provided (used) by financing activities		9,487		(1,413)
Net cash used by financing activities		(331)		(348)

Net increase in cash and temporary cash investments		~~11,475~~779		~~710~~980

Cash and temporary cash investments:
Beginning of year		13,~~883~~959		1,~~015~~883
End of period	$	134,~~358~~738	$	12,~~725~~863

Reconciliation of capital investments:
Payments for property and equipment, including payments for lease buyouts	$	(31,~~133~~044)	$	(21,~~907~~304)
Payments for lease buyouts		4611		—37
Changes in construction-in-progress payables		~~271~~(150)		~~421~~37
Total capital investments, excluding lease buyouts	$	(21,~~816~~183)	$	(21,~~486~~230)

Disclosure of cash flow information:
Cash paid during the year for net interest	$	~~150~~269	$	~~380~~70
Cash paid during the year for income taxes	$	~~526~~203	$	~~579~~119

The accompanying notes are an integral part of the Consolidated Financial Statements.

THE KROGER CO.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS’ EQUITY

(unaudited)


									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
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	—		—		—	(13)		2385		—		—		—		2385
Restricted stock issued	—		—		(7276)	(1)		3033		—		—		—		(4243)
Treasury stock activity:
Stock options exchanged	—		—		—	—2		(29103)		—		—		—		(29103)
Share-based employee compensation	—		—		4957	—		—		—		—		—		4957
Other comprehensive income net of tax of $26	—		—		—	—		—		88		—		—		88
Other comprehensive income net of tax of $22	—		—		—	—		—		70		—		—		70
Other	—		—		4481	—		(4481)		—		—		3—		3—
Cash dividends declared ($0.26 per common share)	—		—		—	—		—		—		(188)		—		(188)
Cash dividends declared ($0.29 per common share)	—		—		—	—		—		—		(210)		—		(210)
Net earnings including noncontrolling interests	—		—		—	—		—		—		~~962~~947		—9		~~962~~956

Balances at May 20, 2023	1,918	$	1,918	$	3,826	1,200	$	(20,670)	$	(544)	$	26,375	$	(25)	$	10,880
Balances at May 25, 2024	1,918	$	1,918	$	3,984	1,196	$	(20,748)	$	(419)	$	27,683	$	(5)	$	12,413
Issuance of common stock:
Stock options exercised	—		—		—	~~(1)~~—		138		—		—		—		138
Restricted stock issued	—		—		(8596)	(12)		5556		—		—		—		(3040)
Treasury stock activity:
Stock options exchanged	—		—		—	—		(1813)		—		—		—		(1813)
Share-based employee compensation	—		—		4332	—		—		—		—		—		4332
Other comprehensive income net of tax of $32	—		—		—	—		—		104		—		—		104
Other comprehensive income net of tax of $(38)	—		—		—	—		—		(121)		—		—		(121)
Other	—		—		5667	—		(5667)		—		—		2—		2—
Cash dividends declared ($0.29 per common share)	—		—		—	—		—		—		(211)		—		(211)
Cash dividends declared ($0.32 per common share)	—		—		—	—		—		—		(232)		—		(232)
Net earnings (loss) including noncontrolling interests	—		—		—	—		—		—		~~(180)~~466		(1)		~~(179)~~465

Balances at August 12, 2023	1,918	$	1,918	$	3,840	1,198	$	(20,676)	$	(440)	$	25,984	$	(22)	$	10,604
Balances at August 17, 2024	1,918	$	1,918	$	3,987	1,194	$	(20,764)	$	(540)	$	27,917	$	(6)	$	12,512
Issuance of common stock:
Stock options exercised	—		—		—	—		613		—		—		—		613
Restricted stock issued	—		—		(42)	—		—3		—		—		—		~~(4)~~1
Treasury stock activity:
Stock options exchanged	—		—		—	—		(79)		—		—		—		(79)
Share-based employee compensation	—		—		3244	—		—		—		—		—		3244
Other comprehensive income net of income tax of $36	—		—		—	—		—		119		—		—		119
Other comprehensive income net of income tax of $(14)	—		—		—	—		—		(49)		—		—		(49)
Other	—		—		39	—		(39)		—		—		31		31
Cash dividends declared ($0.29 per common share)	—		—		—	—		—		—		(209)		—		(209)
Cash dividends declared ($0.32 per common share)	—		—		—	—		—		—		(236)		—		(236)
Net earnings including noncontrolling interests	—		—		—	—		—		—		646		1		647
Net earnings (loss) including noncontrolling interests	—		—		—	—		—		—		618		(1)		617

Balances at November 4, 2023	1,918	$	1,918	$	3,871	1,198	$	(20,680)	$	(321)	$	26,421	$	(18)	$	11,191
Balances at November 9, 2024	1,918	$	1,918	$	4,038	1,194	$	(20,766)	$	(589)	$	28,299	$	(6)	$	12,894
Issuance of common stock:
Stock options exercised	—		—		—	—		821		—		—		—		821
Restricted stock issued	—		—		(2)	~~(1)~~—		3—		—		—		—		1(2)
Treasury stock activity:
Stock options exchanged	—		—		—	1		(8)		—		—		—		(8)
Treasury stock purchases, at cost	—		—		(1,000)	64		(4,038)		—		—		—		(5,038)
Share-based employee compensation	—		—		48	—		—		—		—		—		48
Stock options exchanged	—		—		—	—		(31)		—		—		—		(31)
Other comprehensive income net of income tax of $(50)	—		—		—	—		—		(168)		—		—		(168)
Share-based employee compensation	—		—		42	—		—		—		—		—		42
Other	—		—		5	—		(5)		—		—		1		1
Other comprehensive income net of income tax of $(11)	—		—		—	—		—		(32)		—		—		(32)
Cash dividends declared ($0.29 per common share)	—		—		—	—		—		—		(211)		—		(211)
Other	—		—		9	—		(9)		—		—		2		2
Net earnings including noncontrolling interests	—		—		—	—		—		—		736		3		739
Cash dividends declared ($0.32 per common share)	—		—		—	—		—		—		(209)		—		(209)
Net earnings including noncontrolling interests	—		—		—	—		—		—		634		—		634

Balances at February 3, 2024	1,918	$	1,918	$	3,922	1,198	$	(20,682)	$	(489)	$	26,946	$	(14)	$	11,601
Balances at February 1, 2025	1,918	$	1,918	$	3,087	1,258	$	(24,823)	$	(621)	$	28,724	$	(4)	$	8,281

The accompanying notes are an integral part of the Consolidated Financial Statements.

THE KROGER CO.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS’ EQUITY

(unaudited)


									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 February 3, 2024	1,918	$	1,918	$	3,922	1,198	$	(20,682)	$	(489)	$	26,946	$	(14)	$	11,601
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	—		—		—	(34)		85145		—		—		—		85145
Restricted stock issued	—		—		(7665)	(1)		3332		—		—		—		(4333)
Treasury stock activity:
Stock options exchanged	—		—		—	24		(~~103~~181)		—		—		—		(~~103~~181)
Share-based employee compensation	—		—		5738	—		—		—		—		—		5738
Other comprehensive income net of tax of $22	—		—		—	—		—		70		—		—		70
Other comprehensive income net of tax of $2	—		—		—	—		—		2		—		—		2
Other	—		—		8199	—		(8199)		—		—2		—(3)		—(1)
Cash dividends declared ($0.29 per common share)	—		—		—	—		—		—		(210)		—		(210)
Cash dividends declared ($0.32 per common share)	—		—		—	—		—		—		(211)		—		(211)
Net earnings including noncontrolling interests	—		—		—	—		—		—		~~947~~866		92		~~956~~868

Balances at May 25, 2024	1,918	$	1,918	$	3,984	1,196	$	(20,748)	$	(419)	$	27,683	$	(5)	$	12,413
Balances at May 24, 2025	1,918	$	1,918	$	3,159	1,257	$	(24,926)	$	(619)	$	29,381	$	(5)	$	8,908
Issuance of common stock:
Stock options exercised	—		—		—	—		8		—		—		—		8
Restricted stock issued	—		—		(96)	(2)		56		—		—		—		(40)
Treasury stock activity:
Stock options exchanged	—		—		—	—		(13)		—		—		—		(13)
Share-based employee compensation	—		—		32	—		—		—		—		—		32
Other comprehensive income net of tax of $(38)	—		—		—	—		—		(121)		—		—		(121)
Other	—		—		67	—		(67)		—		—		—		—
Cash dividends declared ($0.32 per common share)	—		—		—	—		—		—		(232)		—		(232)
Net earnings (loss) including noncontrolling interests	—		—		—	—		—		—		466		(1)		465

Balances at August 17, 2024	1,918	$	1,918	$	3,987	1,194	$	(20,764)	$	(540)	$	27,917	$	(6)	$	12,512
Issuance of common stock:
Stock options exercised	—		—		—	—		13		—		—		—		13
Restricted stock issued	—		—		(2)	—		3		—		—		—		1
Treasury stock activity:
Stock options exchanged	—		—		—	—		(9)		—		—		—		(9)
Share-based employee compensation	—		—		44	—		—		—		—		—		44
Other comprehensive income net of income tax of $(14)	—		—		—	—		—		(49)		—		—		(49)
Other	—		—		9	—		(9)		—		—		1		1
Cash dividends declared ($0.32 per common share)	—		—		—	—		—		—		(236)		—		(236)
Net earnings (loss) including noncontrolling interests	—		—		—	—		—		—		618		(1)		617

Balances at November 9, 2024	1,918	$	1,918	$	4,038	1,194	$	(20,766)	$	(589)	$	28,299	$	(6)	$	12,894

The accompanying notes are an integral part of the Consolidated Financial Statements.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

1.	ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying financial statements include the consolidated accounts of The Kroger Co., its wholly-owned subsidiaries and other consolidated entities. The February 31, ~~2024~~2025 balance sheet was derived from audited financial statements and, due to its summary nature, does not include all disclosures required by generally accepted accounting principles (“GAAP”). Significant intercompany transactions and balances have been eliminated. References to the “Company” in these Consolidated Financial Statements mean the consolidated company.

In the opinion of management, the accompanying unaudited Consolidated Financial Statements include adjustments, all of which are of a normal, recurring nature that are necessary for a fair statement of results of operations for such periods but should not be considered as indicative of results for a full year. The financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted, pursuant to SEC regulations. Accordingly, the accompanying Consolidated Financial Statements should be read in conjunction with the financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended February 31, ~~2024~~2025.

The unaudited information in the Consolidated Financial Statements for the ~~third~~first quarters ended ~~November~~May 924, ~~2024~~2025 and ~~November~~May 425, ~~2023~~2024 includes the results of operations of the Company for the ~~12 and 40~~ 16-week periods then ended.

Reclassifications

In the fourth quarter of 2023, the Company retrospectively reclassified certain liabilities from “Other current liabilities” to “Accounts payable” on the Consolidated Balance Sheets to better align the presentation of liabilities associated with its third-party financing arrangements and other current liabilities on the Consolidated Balance Sheets with management’s internal reporting. A similar reclassification was made to the Consolidated Statement of Cash Flows resulting in a change to “Accounts payable” and “Accrued expenses” within “Net cash provided by operating activities” for the quarter ended November 4, 2023. The reclassification did not affect total current liabilities on the Company’s Consolidated Balance Sheet or total operating cash flows on the Consolidated Statement of Cash Flows.

Fair Value Measurements

Fair value measurements are classified and disclosed in one of the following three categories:

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.

The Company records cash and temporary cash investments, store deposits in-transit, receivables, prepaid and other current assets, ~~trade~~ accounts payable, accrued salaries and wages and other current liabilities at approximated fair value. Certain other investments and derivatives are recorded as Level 1, 2 or 3 instruments.

8The fair value of certain financial instruments, measured using Level 1 inputs, was $164 and $183 as of May 24, 2025 and February 1, 2025, respectively, and is included in “Other assets” in the Company’s Consolidated Balance Sheets. An unrealized loss for these Level 1 investments of approximately $19 and $86 for the first quarters of 2025 and 2024, respectively, is included in “(Loss) gain on investments” in the Company’s Consolidated Statements of Operations.

The fair value of all financial instruments, measured using Level 1 inputs, was $205 and $578 as of November 9, 2024 and February 3, 2024, respectively, and is included in “Other assets” in the Company’s Consolidated Balance Sheets. An unrealized loss for the Company’s Level 1 investments of approximately $20 and $103 for the third quarters of 2024 and 2023, respectively, is included in “(Loss) gain on investments” in the Company’s Consolidated Statements of Operations. An unrealized loss for the Company’s Level 1 investments of approximately $93 and $12 for the first three quarters of 2024 and 2023, respectively, is included in “(Loss) gain on investments” in the Company’s Consolidated Statements of Operations.

In the first quarter of 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's forward-starting interest rate swaps ~~and treasury lock agreements~~ are considered Level 2 instruments. The Company values these forward-starting interest rate swaps ~~and treasury locks~~ using observable forward yield curves. These forward yield curves are classified as Level 2 inputs.

Refer to Note 2 for the disclosure of debt instrument fair values.

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 these financing arrangements are included in “Accounts payable” in the Company’s Consolidated Balance Sheets for $274 and $294 as of May 24, 2025 and February 1, 2025, respectively.

As of November 9, 2024 and February 3, 2024, the Company had $350 and $325, respectively, in “Accounts payable” in the Company’s Consolidated Balance Sheets associated with financing arrangements.

2.	DEBT OBLIGATIONS

Long-term debt consists of:


	~~November~~May 924,		February 31,
	~~2024~~2025		~~2024~~2025
1.70% to 8.00% Senior Notes due through 2064	$	1914,~~520~~857	$	914,~~123~~854
Other		1,~~058~~081		1,~~064~~055

Total debt, excluding obligations under finance leases		2015,~~578~~938		1015,~~187~~909
Less current portion		(10606)		(25104)

Total long-term debt, excluding obligations under finance leases	$	2015,~~568~~332	$	1015,~~162~~805

The fair value of the Company’s long-term debt, including current maturities, was estimated 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 ~~November~~May 924, ~~2024~~2025 and February 31, ~~2024~~2025. At ~~November~~May 924, ~~2024~~2025, the fair value of total debt was $1914,~~731~~375 compared to a carrying value of $2015,~~578~~938. At February 31, ~~2024~~2025, the fair value of total debt was $914,~~401~~648 compared to a carrying value of $1015,~~187~~909.

9As of May 25, 2024, the Company had five forward-starting interest rate swaps with a maturity date of August 1, 2027 and an aggregate notional amount totaling $5,350. These forward-starting interest rate swaps were hedging the variability in future benchmark interest payments attributable to changing interest rates on the forecasted issuance of fixed-rate debt that was issued in the third quarter of 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. 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 were recognized through net earnings. In the first quarter of 2024, the Company recognized an unrealized gain of $79 related to these forward-starting interest rate swaps that is included in “(Loss) gain on investments” in the Company’s Consolidated Statements of Operations.

InCash ~~the~~paid ~~second~~for ~~quarter of 2024, the Company terminated five forward-starting~~ interest ~~rate~~expense ~~swaps~~related with a maturity date of August 1, 2027 and an aggregate notional amount totaling $5,350. These forward-starting interest rate swaps were hedging the variability in future benchmark interest payments attributable to ~~changing interest rates on the forecasted issuance of fixed~~long-~~rate~~term debt ~~that~~including ~~was~~obligations ~~issued~~under infinance ~~the~~leases ~~third~~was ~~quarter~~$329 ofand ~~2024. A notional amount of~~ $~~2,350~~106 offor ~~these forward-starting interest rate swaps was designated as a cash-flow hedge as defined by GAAP. Accordingly,~~ the ~~unamortized~~first ~~gain~~quarters ofended ~~$48,~~May ~~$36 net of tax~~24, ~~has~~2025 ~~been deferred in accumulated other comprehensive income~~ and ~~will~~May ~~be amortized to earnings as the interest payments are made. The remainder of the notional amount of $3~~25,~~000~~ ~~of the forward-starting interest rate swaps was not designated as a cash-flow hedge. Accordingly~~2024, ~~the changes in the fair value of these forward-starting interest rate swaps not designated as cash-flow hedges were recognized through net earnings~~respectively. InInterest ~~the~~income ~~third quarter~~ of ~~2023,~~approximately ~~the~~$63 ~~Company~~and ~~recognized an unrealized gain of~~ $~~129~~36 ~~related~~for ~~to these forward-starting interest rate swaps that is included in “(Loss) gain on investments” in~~ the ~~Company’s Consolidated Statements of Operations. During the~~ first ~~three~~ quarters of ~~2024~~2025 and ~~2023~~2024, ~~the Company recognized a realized loss of $55 and an unrealized gain of $329,~~ respectively, ~~related to these forward-starting interest rate swaps that~~ is included in “~~(Loss)~~Net ~~gain~~interest ~~on investments~~expense” in the Company’s Consolidated Statements of Operations.

InAs ~~the second quarter~~ of ~~2024~~May 24, ~~the Company entered into two 10-year treasury lock agreements with an aggregate notional amount of $2~~2025,~~100~~ and aFebruary ~~weighted-average~~1, ~~interest~~2025, ~~rate~~Other ofdebt ~~3.91%~~consisted ~~and~~primarily ~~two 30-year treasury lock agreements with an aggregate notional amount~~ of ~~$3,250 and~~ a ~~weighted-average~~financial ~~interest~~obligation ~~rate~~related ~~of 4.11%. These treasury locks were an agreement used~~ to ~~hedge~~a ~~the~~sale ~~U.S.~~transaction ~~Treasury~~for ~~benchmark~~properties ~~interest rate associated with future interest payments on the forecasted issuance of fixed-rate debt~~ that ~~was~~did ~~issued~~not inqualify ~~the~~for ~~third quarter of 2024. These treasury locks were designated as cash~~sale-~~flow~~leaseback ~~hedges~~accounting astreatment ~~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~~2021. In the third quarter of 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.

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. This Credit Agreement amended 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 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 $2,750.9

Cash paid for interest expense related to long term debt including obligations under finance leases was $355 and $467 for the three quarters ended November 9, 2024 and November 4, 2023, respectively. Interest income of approximately $147 and $29 for the third quarters of 2024 and 2023, respectively, is included in “Net interest expense” in the Company’s Consolidated Statements of Operations. Interest income of approximately $220 and $87 for the first three quarters of 2024 and 2023, respectively, is included in “Net interest expense” in the Company’s Consolidated Statements of Operations.

For additional information about the Company’s unsecured bridge term loan facility, term loan credit agreement and completed senior notes issuance, see Note 10 and Note 11 to the Consolidated Financial Statements.

3.	BENEFIT PLANS

The following table provides the components of net periodic benefit cost (benefit) for the company-sponsored defined benefit pension plans and other postretirement benefit plans for the ~~third~~first quarters of ~~2024~~2025 and ~~2023~~2024:


	~~Third~~First Quarter Ended
	Pension Benefits				Other Benefits
	~~November~~May 924,		~~November~~May 425,		~~November~~May 924,		~~November~~May 425,
	~~2024~~2025		~~2023~~2024		~~2024~~2025		~~2023~~2024
Components of net periodic benefit cost (benefit):
Service cost	$	2	$	42	$	1	$	1
Interest cost		3040		2941		24		3
Expected return on plan assets		(3442)		(3546)		—		—
Amortization of:
Prior service cost		—		—		(1)		(31)
Actuarial loss (gain)		24		23		(24)		(34)

Net periodic benefit cost (benefit)	$	—4	$	—	$	—	$	(21)

The ~~following~~Company ~~table~~is ~~provides~~not ~~the~~required ~~components~~to ofmake ~~net~~any ~~periodic~~contributions ~~benefit~~to ~~cost~~its ~~(benefit)~~company-sponsored ~~for~~pension plans in 2025 but may make contributions to the ~~company-sponsored~~extent ~~defined~~such ~~benefit~~contributions ~~pension~~are ~~plans~~beneficial ~~and~~to ~~other~~the ~~postretirement~~Company. The ~~benefit~~Company did not make any significant contributions to its company-sponsored pension plans ~~for~~in the first ~~three~~ quarters of ~~2024~~2025 ~~and~~or ~~2023:~~2024.


	Three Quarters Ended
	Pension Benefits				Other Benefits
	November 9,		November 4,		November 9,		November 4,
	2024		2023		2024		2023
Components of net periodic benefit cost (benefit):
Service cost	$	5	$	13	$	3	$	3
Interest cost		101		98		8		6
Expected return on plan assets		(114)		(115)		—		—
Amortization of:				0				0
Prior service cost		—		—		(3)		(9)
Actuarial loss (gain)		7		6		(8)		(10)

Net periodic benefit cost (benefit)	$	(1)	$	2	$	—	$	(10)

The Company contributed $109 to employee 401(k) retirement savings accounts in both the first quarters of 2025 and 2024.

The Company is not required to make any contributions to its company-sponsored pension plans in 2024 but may make contributions to the extent such contributions are beneficial to the Company. The Company did not make any significant contributions to its company-sponsored pension plans in the first three quarters of 2024 or 2023.

The Company contributed $255 and $251 to employee 401(k) retirement savings accounts in the first three quarters of 2024 and 2023, respectively.

4.	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:

~~Third~~First Quarter Ended

~~November~~May 924, ~~2024~~2025

~~November~~May 425, ~~2023~~2024

Per

Earnings

(Numerator)

(Denominator)

Amount

(Numerator)

(Denominator)

Amount

Net earnings attributable to The Kroger Co. per basic common share

~~613~~860

~~723~~660

01.8530

~~641~~940

~~719~~721

01.8930

Dilutive effect of stock options

Net earnings attributable to The Kroger Co. per diluted common share

~~613~~860

~~728~~664

01.8429

~~641~~940

~~725~~727

01.8829


	Three Quarters Ended					Three Quarters Ended
	November 9, 2024					November 4, 2023
				Per					Per
	Earnings		Shares	Share		Earnings		Shares	Share
	(Numerator)		(Denominator)	Amount		(Numerator)		(Denominator)	Amount
Net earnings attributable to The Kroger Co. per basic common share	$	2,015	722	$	2.79	$	1,416	718	$	1.97
Dilutive effect of stock options			6					7

Net earnings attributable to The Kroger Co. per diluted common share	$	2,015	728	$	2.77	$	1,416	725	$	1.95

The Company had combined undistributed and distributed earnings to participating securities totaling $6 and $7 in the first quarters of 2025 and 2024, respectively.

The Company had ~~combined~~options ~~undistributed~~outstanding ~~and~~for ~~distributed~~approximately ~~earnings~~1 tomillion ~~participating~~and ~~securities~~4 ~~totaling~~million $5shares induring ~~both~~ the ~~third~~first quarters of ~~2024~~2025 and ~~2023. For~~2024, ~~the~~respectively, ~~first~~that ~~three~~were ~~quarters~~excluded from the computations of ~~2024~~net ~~and~~earnings ~~2023,~~per ~~the~~diluted ~~Company~~common ~~had~~share ~~combined~~because ~~undistributed~~their ~~and~~inclusion ~~distributed~~would ~~earnings~~have tohad ~~participating~~an ~~securities~~anti-dilutive ofeffect ~~$16~~on ~~and~~net ~~$12,~~earnings ~~respectively~~per share.

The Company had options outstanding for approximately 3 million shares during both the third quarters of 2024 and 2023 that 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 share. The Company had options outstanding for approximately 3 million during both the first three quarters of 2024 and 2023 that 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 share.10

5.	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 they operate, subdivisions, and Native American tribes. Along with the execution of certain non-monetary conditions, the Company ~~has~~ 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 ~~would~~provides ~~allow~~ 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 ~~after the settlement becomes effective~~, 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 ~~the second quarter of~~ 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. As of November 9, 2024 and February 3, 2024, the Company recorded $284 and $1,129 of the estimated settlement liability in “Other current liabilities” and “Other long-term liabilities,” respectively, in the Company’s Consolidated Balance Sheets. In the first quarter of 2024, the Company made its first annual payment for $138 into an escrow account, which is recorded in “Prepaid and other current assets” in the Company’s Consolidated Balance Sheets. This escrow payment is recorded in “Prepaid and other current assets” within “Changes in operating assets and liabilities” in the Company’s Consolidated Statement of Cash Flows for the first three quarters ended November 9, 2024.

13The 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 payment was subsequently released from escrow on February 20, 2025. The Company made its second annual payment of $138 on March 5, 2025. This payment was recorded in “Other” within “Changes in operating assets and liabilities” in the Company’s Consolidated Statement of Cash Flows.

In ~~the first three quarters of~~ 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 isbecame ~~currently anticipated to become~~ effective on December 30, 2024, and the settlement with Native American tribes is currently anticipated to become effective onby ~~December~~September 3130, 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.

InAs ~~the~~of ~~first~~May ~~quarter~~24, ~~of 2023~~2025, the Company recorded a$148 ~~charge~~and of $62982 ~~relating~~of tothe aestimated settlement ofliability ~~opioid~~in ~~litigation~~“Other ~~claims~~current ~~with~~liabilities” and “Other long-term liabilities,” respectively, in the ~~State~~Company’s ofConsolidated ~~West~~Balance ~~Virginia~~Sheets related to these opioid settlements. As ~~The~~of ~~agreed~~February ~~upon~~1, 2025, the Company recorded $279 and $1,139 of the estimated settlement ~~framework~~liability ~~resolves~~in ~~all~~“Other ~~opioid~~current ~~lawsuits~~liabilities” and ~~claims~~“Other bylong-term liabilities,” respectively, in the ~~West~~Company’s ~~Virginia~~Consolidated ~~Attorney~~Balance ~~General~~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~~Termination — 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~~Merger ~~are~~with ~~unable~~Albertsons ~~to fulfill their lease obligations. Due to the wide distribution of the Company’s assignments among third parties~~Companies, ~~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~~Inc.

6.As ~~ACCUMULATED~~previously ~~OTHER~~disclosed, ~~COMPREHENSIVE~~on ~~INCOME~~October 13, 2022, the Company entered into a merger agreement (~~LOSS~~the “Merger Agreement”) with Albertsons Companies, Inc. (“Albertsons”) pursuant to which the Company would have acquired Albertsons. On February 26, 2024, the Federal Trade Commission instituted an administrative proceeding to prohibit the merger and filed suit in the United States District Court for the District of Oregon requesting a preliminary injunction to block the merger. On December 10, 2024, the court issued a preliminary injunction enjoining the consummation of the merger.

~~The~~On ~~following~~December ~~table~~10, ~~represents~~2024, Albertsons sued the ~~changes~~Company in ~~AOCI~~the byDelaware ~~component~~Court of Chancery for alleged breaches of the ~~first~~Merger ~~three~~Agreement ~~quarters~~and the implied covenant of ~~2024~~good faith and ~~2023:~~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.


			Pension and
	Cash Flow		Postretirement
	Hedging		Defined Benefit
	Activities(1)		Plans(1)		Total(1)
Balance at January 28, 2023	$	(129)	$	(503)	$	(632)
OCI before reclassifications(2)		317		—		317
Amounts reclassified out of AOCI(3)		4		(10)		(6)
Net current-period OCI		321		(10)		311
Balance at November 4, 2023	$	192	$	(513)	$	(321)

Balance at February 3, 2024	$	60	$	(549)	$	(489)
OCI before reclassifications(2)		(103)		—		(103)
Amounts reclassified out of AOCI(3)		6		(3)		3
Net current-period OCI		(97)		(3)		(100)
Balance at November 9, 2024	$	(37)	$	(552)	$	(589)

On December 11, 2024, the Company delivered a notice to Albertsons terminating the Merger Agreement, which 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 notice, Kroger notified Albertsons that Kroger has no obligation to pay the $600 termination fee because Albertsons failed to perform and comply in all material respects with its covenants under the Merger Agreement.

(1) All amounts are net of tax.

(2) Net of tax of $96 for cash flow hedging activities for the first three quarters of 2023 and $(30) for the first three quarters of 2024.

(3) Net of tax of $2 for cash flow hedging activities and $(3) for pension and postretirement defined benefit plans for the first three quarters of 2023. Net of tax of $1 for cash flow hedging activities and $(1) for pension and postretirement defined benefit plans for the first three quarters of 2024.

14On March 17, 2025, the Company filed an answer denying the allegations in Albertsons’s complaint and filed counterclaims that seek recovery for breaches of the Merger Agreement by Albertsons.

~~The following table represents the items reclassified out of AOCI and the related tax effects for the first three quarters of 2024 and 2023:~~12


	Third Quarter Ended				Three Quarters Ended
	November 9,		November 4,		November 9,		November 4,
	2024		2023		2024		2023
Cash flow hedging activity items:
Amortization of gains and losses on cash flow hedging activities(1)	$	2	$	2	$	7	$	6
Tax expense		—		(1)		(1)		(2)
Net of tax		2		1		6		4

Pension and postretirement defined benefit plan items:
Amortization of amounts included in net periodic pension cost(2)		(1)		(4)		(4)		(13)
Tax expense		—		1		1		3
Net of tax		(1)		(3)		(3)		(10)
Total reclassifications, net of tax	$	1	$	(2)	$	3	$	(6)

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 their 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.

(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 cost (see Note 3 for additional details).

6.	ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

7.The ~~INCOME~~following ~~TAXES~~table represents the changes in AOCI by component for the first quarters of 2025 and 2024:

The effective income tax rate was 23.3% for the third quarter of 2024 and 23.9% for the third quarter of 2023. The effective income tax rate was 21.8% for the first three quarters of 2024 and 24.8% for the first three quarters of 2023. The effective income tax rate for the third quarter of 2024 differed from the federal statutory rate due to the effect of state income taxes, partially offset by the utilization of tax credits and deductions. The effective income tax rate for the first three quarters of 2024 differed from the federal statutory rate due to the effect of state income taxes, partially offset by a tax benefit related to classifying Kroger Specialty Pharmacy as held for sale and the utilization of tax credits and deductions. The effective income tax rate for the third quarter of 2023 differed from the federal statutory rate due to the effect of state income taxes and certain nondeductible expenses, partially offset by the utilization of tax credits. The effective income tax rate for the first three quarters of 2023 differed from the federal statutory rate due to the effect of state income taxes, the nondeductible portion of opioid settlement charges and certain nondeductible expenses, partially offset by the utilization of tax credits.

8. RECENTLY ISSUED ACCOUNTING STANDARDS

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 for annual reporting periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. The Company is currently assessing the effect that adoption of this guidance will have on its Consolidated Financial Statements.


			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⁾		70		—		70
Amounts reclassified out of AOCI⁽³⁾		2		(2)		—
Net current-period OCI		72		(2)		70
Balance at May 25, 2024	$	132	$	(551)	$	(419)

Balance at February 1, 2025	$	(35)	$	(586)	$	(621)
OCI before reclassifications⁽²⁾		1		—		1
Amounts reclassified out of AOCI⁽³⁾		2		(1)		1
Net current-period OCI		3		(1)		2
Balance at May 24, 2025	$	(32)	$	(587)	$	(619)

(1)	All amounts are net of tax.

(2)	Net of tax of $21 for cash flow hedging activities for the first quarter of 2024 and $1 for the first quarter of 2025.

(3)	Net of tax of $1 for cash flow hedging activities in the first quarters of 2024 and 2025.

InThe ~~December~~following ~~2023,~~table represents the ~~FASB~~items ~~issued~~reclassified ~~ASU~~out ~~No.~~of ~~2023-09,~~AOCI ~~"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~~related tax ~~rate~~effects ~~reconciliation. The ASU is effective~~ for ~~annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently assessing~~ the ~~effect~~first ~~that~~quarters ~~adoption~~ of ~~this~~2025 ~~guidance~~and ~~will have on its Consolidated Financial Statements.~~2024:


	First Quarter Ended
	May 24,		May 25,
	2025		2024
Cash flow hedging activity items:
Amortization of gains and losses on cash flow hedging activities⁽¹⁾	$	3	$	3
Tax expense		(1)		(1)
Net of tax		2		2

Pension and postretirement defined benefit plan items:
Amortization of amounts included in net periodic pension cost⁽²⁾		(1)		(2)
Tax expense		—		—
Net of tax		(1)		(2)
Total reclassifications, net of tax	$	1	$	—

(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 cost (see Note 3 for additional details).

In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The amendments improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The ASU is effective for annual reporting periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 with early adoption permitted and should be applied on a retroactive basis. The Company is currently assessing the effect that adoption of this guidance will have on its Consolidated Financial Statements and segment disclosures.13

97. ~~SALE~~SEGMENT ~~OF KROGER SPECIALTY PHARMACY~~REPORTING

OnThe ~~October~~Company 4,operates ~~2024~~supermarkets, multi-department stores and fulfillment centers throughout the United States. The Company’s ~~completed~~retail ~~the~~operations, ~~sale~~which represent 99% of the Company’s consolidated sales, are its ~~Kroger~~only ~~Specialty~~reportable ~~Pharmacy~~segment. ~~business~~The retail operations’ segment revenues are predominately earned as consumer products are sold to ~~Elevance~~customers ~~Health~~in our stores, ~~for~~fuel ~~$464~~centers and via the Company’s eCommerce business. In The Company aggregates its operating divisions into one reportable segment due to the ~~third~~operating ~~quarter~~divisions ofhaving ~~2024~~similar economic characteristics with similar long-term financial performance. In addition, the Company’s ~~recognized~~operating adivisions ~~gain~~offer oncustomers ~~sale~~similar ~~for~~products, ~~$79~~have similar distribution methods, ~~$60~~operate ~~net~~in ofsimilar ~~tax~~regulatory environments, ~~due~~purchase tothe majority of the merchandise for retail sale~~. For~~ ~~the~~from ~~first~~similar ~~three~~(and ~~quarters~~in ofmany ~~2024,~~cases ~~the~~identical) ~~Company~~vendors ~~recognized~~on a ~~gain~~coordinated onbasis ~~sale~~from ~~for~~a ~~$79~~centralized location, ~~$91~~serve ~~net~~similar types of ~~tax~~customers, ~~which~~and ~~includes~~are allocated capital from a centralized location. Operating divisions are organized primarily on a geographical basis so the ~~reduction~~operating todivision ~~income~~management ~~tax~~team ~~expense~~can be responsive to local needs of ~~$31~~the ~~related~~operating todivision ~~deferred~~and ~~tax~~can ~~assets~~execute ~~recognized~~company strategic plans and initiatives throughout the locations in their operating division. This geographical separation is the ~~first~~primary ~~quarter~~differentiation between these retail operating divisions. The geographical basis of ~~2024~~organization ~~due~~reflects tohow ~~recording~~the ~~Kroger~~business ~~Specialty~~is ~~Pharmacy~~managed and how the Company’s Interim Chief Executive Officer, who acts as ~~held~~the ~~for~~Company’s ~~sale~~chief operating decision maker (“CODM”), assesses performance internally. All of the Company’s operations are domestic.

10The 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”). ~~TERMINATION~~The OFCompany ~~THE~~defines ~~MERGER~~FIFO ~~WITH~~EBITDA ~~ALBERTSONS~~as ~~COMPANIES~~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, ~~INC~~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.

As previously disclosed, on October 13, 2022, the Company entered into a merger agreement (the “Merger Agreement”) with Albertsons Companies, Inc. (“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 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), as further described below, the court issued a preliminary injunction enjoining the consummation of the merger. 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.14

InThe ~~connection~~following ~~with~~table ~~obtaining~~presents the ~~requisite~~Company’s ~~regulatory~~retail ~~clearance~~operations ~~necessary~~segment torevenue, ~~consummate~~measure ~~the~~of ~~transaction~~segment profit or loss, ~~the~~significant ~~Company~~segment expenses and ~~Albertsons~~reconciliation ~~expected~~of toretail ~~make~~operations ~~store~~segment ~~divestitures.~~FIFO OnEBITDA ~~September~~to 8,consolidated ~~2023,~~net ~~the~~earnings ~~Company~~before ~~and~~income ~~Albertsons~~tax ~~announced~~expense ~~that~~and ~~they~~retail ~~entered~~operations ~~into~~segment asales ~~comprehensive~~to ~~divestiture~~consolidated ~~plan~~sales ~~with~~for ~~C&S~~the ~~Wholesale~~first ~~Grocers,~~quarters ~~LLC~~of ~~(“C&S”).~~2025 and 2024:

On April 22, 2024, the Company and Albertsons announced they had amended their definitive agreement with C&S, which was a further divestiture package with additional stores, facilities, agreements, banners, private label brands and certain other rights. The definitive amended and restated agreement was subject to fulfillment of customary closing conditions, including clearance by the Federal Trade Commission (“FTC”). Following the termination of the merger with Albertsons, the Company terminated the amended and restated purchase agreement with C&S.


	First Quarter Ended
	May 24,		May 25,
	2025		2024
Retail operations segment sales	$	44,781	$	44,009
Retail operations segment expenses:
Merchandise costs⁽¹⁾		31,264		30,878
Expenses in gross⁽²⁾		3,244		3,317
Operating, general, and administrative		7,809		7,441
Rent		268		266
Retail operations segment FIFO EBITDA	$	2,196	$	2,107

Reconciliation of net earnings before income tax expense:
Retail operations segment FIFO EBITDA	$	2,196	$	2,107
Depreciation and amortization		(1,051)		(978)
LIFO charge		(40)		(41)
Other FIFO EBITDA⁽³⁾		217		206
Net interest expense		(199)		(123)
Non-service component of company-sponsored pension plan (expense) benefits		(1)		4
(Loss) gain on investments		(19)		16
Consolidated net earnings before income tax expense	$	1,103	$	1,191

Reconciliation of sales:
Retail operations segment sales	$	44,781	$	44,009
Other sales⁽³⁾		337		1,260
Consolidated sales	$	45,118	$	45,269

16(1) Merchandise costs include product costs, net of discounts and allowances, and food production costs.

(2)	Expenses in gross include advertising costs, warehousing costs, including receiving and inspection costs, and transportation costs.

(3)	Other sales and other FIFO EBITDA primarily include other operating segments that are not part of the retail operations segment such as third-party media revenue, data analytic services, specialty pharmacy and in-store health clinics.

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. On July 26, 2024, the Company and the commitment parties under the bridge facility agreed to extend the outside date with respect to the bridge facility commitments to the earlier of the Merger Outside Date (as defined herein) and December 31, 2024. 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”)8. ~~Borrowings~~INCOME 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 the third quarter of 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. TAXES

The effective income tax rate was 21.3% for the first quarter of 2025 and 19.8% for the first quarter of 2024. The effective income tax rate for the first quarter of 2025 differed from the federal statutory rate due to the effect of state income taxes, partially offset by the utilization of tax credits and deductions including the benefit from share-based payments. The effective income tax rate for the first quarter of 2024 differed from the federal statutory rate due to a tax benefit related to classifying Kroger Specialty Pharmacy as held for sale and the utilization of tax credits and deductions, partially offset by the effect of state income taxes.

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”) are subject to a special mandatory redemption (at a price equal to 101% of the aggregate principal amount of such series of notes plus accrued and unpaid interest to, but excluding, the date of the special mandatory redemption) under certain circumstances if the proposed merger is terminated or does not close by an agreed upon date. In connection with the termination of the Merger Agreement, the Company sent a notice to the trustee in respect of the SMR Notes, setting a redemption date of December 18, 2024 to redeem the SMR Notes in accordance with their terms. For additional information, see Note 11 to the Consolidated Financial Statements.15

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 cash9. InRECENTLY ~~conjunction~~ISSUED ~~with~~ACCOUNTING 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.STANDARDS

On August 29, 2024, the Company announced that it has received the requisite number of consents to adopt the Proposed Amendments with respect to certain series of ACI Notes (the “Consented Series”) based on the early tenders in the Exchange Offers and Consent Solicitations. The applicable parties to the applicable ACI Indentures executed supplemental indentures to the applicable ACI Indentures implementing the Proposed Amendments with respect to the Consented Series, which will not become operative until the settlement of the Exchange Offers. The Company had previously extended the expiration date of the Exchange Offers with respect to all series of ACI Notes. In connection with the termination of the Merger Agreement, the Company has terminated the Exchange Offers and Consent Solicitations. For additional information, see Note 11 to the Consolidated Financial Statements.

OnIn ~~February~~November ~~26,~~ 2024, the ~~FTC~~FASB ~~instituted~~issued anASU ~~administrative~~2024-03, ~~proceeding (the~~ “~~FTC~~Income ~~Administrative~~Statement ~~Proceeding”)~~- toReporting ~~prohibit~~Comprehensive ~~the~~Income ~~merger.~~- ~~Simultaneously,~~Expense ~~the~~Disaggregation ~~FTC~~Disclosures (~~joined~~Subtopic ~~by nine states~~220-40): ~~filed~~Disaggregation ~~the FTC Federal Litigation in the United States District Court for the District~~ of ~~Oregon~~Income ~~(the~~Statement ~~“FTC Federal Litigation~~Expenses.”) The ~~requesting~~guidance arequires ~~preliminary~~disclosures ~~injunction~~about tospecific ~~block~~expense ~~the merger. On January 15~~categories, ~~2024~~including ~~and~~but ~~February~~not ~~14,~~limited ~~2024~~to, ~~the~~purchases ~~attorneys general~~ of ~~Washington~~inventory, ~~and~~employee ~~Colorado~~compensation, ~~respectively~~depreciation, ~~filed~~amortization ~~suit~~and inselling ~~their~~expenses. ~~respective~~The ~~state~~ASU ~~courts,~~is ~~also~~effective ~~seeking~~for toannual ~~enjoin~~reporting ~~the~~periods ~~merger.~~beginning Onafter December 1015, ~~2024~~2026, ~~the~~and ~~federal court in the FTC Federal Litigation granted the FTC’s request~~ for ainterim ~~preliminary~~periods ~~injunction~~within tofiscal ~~block~~years ~~the~~beginning ~~merger. The~~after ~~Washington court also issued a permanent injunction blocking the merger in the Washington case on~~ December 1015, ~~2024~~2027. The ~~Colorado~~Company ~~court~~is ~~has~~currently ~~not~~assessing ~~yet issued a decision. In addition to these governmental actions, private plaintiffs have filed suit in~~ the ~~United~~effect ~~States~~that ~~District~~adoption ~~Court for the Northern District~~ of ~~California~~this ~~also~~guidance ~~seeking~~will tohave ~~enjoin~~on ~~the~~its ~~transaction.~~Consolidated ~~That~~Financial ~~case has been stayed pending resolution of the FTC’s motion for a preliminary injunction in the FTC Federal Litigation~~Statements.

11In December 2023, the FASB issued ASU No.~~SUBSEQUENT~~ ~~EVENTS~~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 ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently assessing the effect that adoption of this guidance will have on its Consolidated Financial Statements.

~~On December~~ 10~~, 2024, the court in the FTC Federal Litigation issued a preliminary injunction enjoining the consummation of the merger with Albertsons~~. On ~~December~~SUBSEQUENT ~~10, 2024, in the Washington case, the King County Superior Court for the State of Washington issued a permanent injunction enjoining the consummation of the merger.~~ EVENT

OnDuring ~~December 10, 2024, Albertsons sued~~ the ~~Company~~second inquarter ~~the Delaware Court~~ of ~~Chancery~~2025, ~~for~~Ocado ~~alleged~~International ~~breaches~~Holdings ofLimited ~~the Merger Agreement~~ and ~~the~~Ocado ~~implied~~Group ~~covenant~~plc of(“Ocado”) ~~good~~drew ~~faith~~down ~~and~~the ~~fair~~entire ~~dealing. Albertsons seeks payment of a~~ $~~600~~152 ~~termination~~from ~~fee~~its ~~that~~letter ~~Albertsons~~of ~~alleges~~credit ~~it is owed~~ under the ~~Merger~~Amended ~~Agreement,~~and asRestated ~~well~~Partnership asFramework ~~additional~~Agreement. The ~~damages~~Company inis ~~unspecified~~currently ~~amounts,~~undertaking ~~including~~a ~~expenses~~comprehensive ~~paid~~review byof ~~Albertsons~~its ineCommerce ~~connection~~operations ~~with the Merger~~ and ~~the~~reviewing ~~lost~~all ~~premium~~aspects ~~Albertsons~~of ~~alleges~~the isbusiness ~~owed~~ to ~~its~~drive ~~shareholders,~~growth asby ~~well~~both asimproving ~~other relief. No schedule has been set, and~~ the ~~Company’s~~customer ~~time~~experience towhile ~~respond~~improving ~~to the complaint has not yet run~~profitability. The ~~Company~~outcome ~~denies~~of ~~the~~this ~~allegations~~review ~~and~~could ~~intends~~have toa ~~vigorously~~material ~~defend~~effect ~~itself~~on inour ~~the~~financial ~~litigation~~statements.

On December 11, 2024, the Company delivered the Termination Notice to Albertsons, terminating the Merger Agreement. The Termination Notice further notified Albertsons that a prior termination letter sent by Albertsons to the Company, dated December 10, 2024, is not an effective termination. In connection with the Termination Notice, the Company notified Albertsons that the Company has no obligation to pay the Parent Termination Fee (as defined in the Merger Agreement) because Albertsons has failed to perform and comply in all material respects with its covenants under the Merger Agreement. Following the termination of the merger with Albertsons, the Company terminated the amended and restated purchase agreement with C&S.16

On December 11, 2024, the Company terminated the Exchange Offers and Consent Solicitations. On December 12, 2024, the Company sent a notice to the trustee in respect of the SMR Notes, setting a redemption date of December 18, 2024 to redeem the SMR Notes at a redemption price equal to 101% of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date.

On September 9, 2022, the Company’s Board of Directors had approved a $1,000 share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “September 2022 Repurchase Program”). On December 11, 2024, the Company announced that its Board of Directors terminated the September 2022 Repurchase Program and authorized a new share repurchase program in an aggregate amount of $7,500, of which $5,000 is expected to be repurchased by means of an accelerated share repurchase program. The remaining amounts under the program may be repurchased by means of open market transactions, privately negotiated transactions, accelerated share repurchase programs or other derivative transactions, or any combination of the foregoing.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following analysis should be read in conjunction with the Consolidated Financial Statements.

CAUTIONARY STATEMENT

This discussion and analysis contains certain forward-looking statements about our future performance. These statements are based on management’s assumptions and beliefs in light of the information currently available to it. Such statements are indicated by words such as “accelerate,” “achieve,” “affect,” “anticipate,” “believe,” “committed,” “~~continue~~confident,” “~~could~~continue,” “~~deliver~~could,” “drive,” “enable,” “ensure,” “estimate,” “expect,” “future,” “goals,” “initiatives,” “~~intended,” “~~maintain,” “may,” “model,” “plan,” “position,” “strategy,” “target,” “trend,” “will,” and “would,” and similar words or phrases. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially. These include the specific risk factors identified in “Risk Factors” in our Annual Report on Form 10-K for our last fiscal year and any subsequent filings, as well as those identified in this Form 10-Q.

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 FIFO operating profit goals may be affected by: ~~the termination of the merger agreement and our proposed transaction with Albertsons and related divestiture plan;~~ 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 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; 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 cyber-attacks or data security breaches; 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 our strategic pillars of ~~fresh~~Fresh, Our Brands, personalization, and ~~seamless~~eCommerce; ~~and~~ the ~~successful~~outcome ~~integration~~ of ~~merged~~litigation ~~companies~~matters, ~~and~~including ~~new~~those ~~strategic~~relating ~~collaborations~~to the terminated transaction with Albertsons; and the risks relating to or arising from our ~~proposed nationwide~~ opioid litigation ~~settlement~~settlements, including ~~our ability to finalize and effectuate~~ the ~~settlement,~~risk ~~the scope and coverage~~ of ~~the~~litigation ~~ultimate~~relating ~~settlement~~to ~~and~~persons, ~~the~~entities, ~~expected financial~~ or ~~other~~jurisdictions ~~impacts~~ that ~~could~~do ~~result~~not ~~from~~participate ~~the~~in ~~settlement~~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.

1917

●

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.

Statements elsewhere in this report and below 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. While we believe that the statements are accurate, uncertainties about the general economy, our labor relations, our ability to execute our plans on a timely basis and other uncertainties described in this report and other reports that we file with the Securities and Exchange Commission could cause actual results to differ materially. We assume no obligation to update the information contained in this report unless required by applicable law.

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~~health and ~~Wellness~~wellness. By executing on our go-to- market strategy built on the four pillars of Fresh, Our Brands, Personalization and ~~Seamless~~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 Kroger Precision Marketing. In turn, the value generated from these businesses enables us to reinvest back into our retail business.

We are focused on enhancing our pillars and delivering an exceptional customer experience to accelerate this flywheel effect. By expanding our store network and improving our ~~digital~~eCommerce capabilities, we expect to grow households and increase sales. ~~Kroger~~Our ~~has evolved into a more diverse business, with a~~ model ~~that~~ provides more ways than ever to generate net earnings growth.

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 ~~and our seamless ecosystem~~ to ensure we deliver a full, fresh and friendly experience for every customer, every time. In an effort to serve more households, we will invest in major storing projects that allow us to increase both in store and online sales. As more and more customers incorporate ~~ecommerce~~eCommerce into their permanent routines, we expect ~~digital~~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 processes and utilizing technology to enhance the associate experience without affecting the customer experience. Together, these will enable us to improve operating margin, while balancing strategic price investments for customers and wage and benefit investments for associates.

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 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. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. On December 11, 2024, we announced that our Board of Directors terminated the September 2022 Share Repurchase Program, as defined below, and authorized a new share repurchase program in an aggregate amount of $7.5 billion, of which $5.0 billion is expected to be repurchased by means of an accelerated share repurchase program. The remaining amounts under the program may be repurchased by means of open market transactions, privately negotiated transactions, accelerated share repurchase programs or other derivative transactions, or any combination of the foregoing.

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

2018

EXECUTIVE SUMMARY

WeKroger delivered solid ~~third~~first quarter results, with strong sales led by ~~our~~ pharmacy, eCommerce and ~~digital~~Fresh. ~~performance~~We made good progress in streamlining our priorities, ~~which~~enhancing ~~reflects~~customer focus and running great stores to improve the ~~versatility~~shopping experience. We’re off to a solid start in 2025 and ~~durability~~we ofare ~~our~~optimistic ~~value~~about ~~creation~~the ~~model~~rest of the year. Our Bycommitment ~~executing~~to driving growth in our ~~go-to-market~~core ~~strategy~~business toand ~~deliver~~moving awith ~~differentiated~~speed ~~customer~~positions ~~experience~~us ~~through~~well for the future. We continue to believe that our ~~focus~~strategy ~~areas~~focusing ofon Fresh, Our Brands, ~~Personalization~~and eCommerce will continue to resonate with customers and ~~Seamless,~~our weresilient ~~are~~model ~~building~~positions ~~loyalty,~~us ~~increasing~~well ~~customer~~to ~~engagement~~navigate ~~and~~the ~~driving~~current ~~growth~~environment. We are focused on investing in ~~total~~projects ~~and~~that ~~loyal~~will ~~households~~maximize return on invested capital over time, ~~which~~while inremaining ~~turn~~committed ~~funds~~to maintaining our ~~alternative~~current ~~profit~~investment ~~businesses~~grade rating, growing our dividend, subject to board approval, and ~~drives~~returning ~~greater~~excess ~~efficiencies~~capital to shareholders. We are confident that by executing on these key priorities, we will generate long-term growth and attractive shareholder returns.

Kroger is delivering on its longstanding commitment to provide customers with the value they are seeking. We are helping customers save in multiple ways, including competitive shelf prices and loyalty discounts, personalized offers, fuel rewards and an expanded multi-tiered Our Brands portfolio. We also remain focused on retention by investing in our associates, through enhanced wages and benefits and improved training and career development opportunities. This positions us well 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)


	~~Third~~First Quarter Ended								~~Three Quarters Ended~~
	~~November~~May 924,			Percentage		~~November~~May 425,			~~November 9,~~			~~Percentage~~		~~November 4,~~
	~~2024~~2025			Change		~~2023~~2024			~~2024~~			~~Change~~		~~2023~~
Sales	$	3345,~~634~~118		(1.0.3)	%	$	3345,~~957~~269		$	~~112,815~~		~~(0.1)~~	%	$	~~112,975~~
Sales without fuel	$	3040,~~299~~778		1.52	%	$	2940,~~852~~311		$	~~100,885~~		~~1.1~~	%	$	~~99,821~~
Identical sales excluding fuel		2.3	%	N/A			(0.6)	%		1.2	%	N/A			1.5	%
Identical sales excluding fuel and Adjusted Items(1)		3.2	%	N/A			0.5	%
FIFO gross margin rate, excluding fuel, bps increase		0.51		N/A			0.03			0.25		N/A			0.20
FIFO gross margin rate, excluding rent, depreciation and amortization, fuel and Adjusted Items, bps increase (decrease)		0.79		N/A			(0.07)
OG&A rate, excluding fuel and Adjusted Items, bps increase		0.2263		N/A			0.3222			~~0.35~~		~~N/A~~			~~0.15~~
Operating profit	$	~~828~~1,322		(92.2)	%	$	~~912~~1,294		$	~~2,937~~		~~54.4~~	%	$	~~1,902~~
Adjusted FIFO operating profit	$	1,~~017~~518		(01.5)3	%	$	1,~~022~~499		$	~~3,500~~		~~(4.9)~~	%	$	~~3,680~~
Net earnings attributable to The Kroger Co.	$	~~618~~866		(48.36)	%	$	~~646~~947		$	~~2,031~~		~~42.2~~	%	$	~~1,428~~
Adjusted net earnings attributable to The Kroger Co.	$	~~719~~996		3(4.09)	%	$	~~698~~1,047		$	~~2,447~~		~~(2.1)~~	%	$	~~2,500~~
Net earnings attributable to The Kroger Co. per diluted common share	$	01.8429		~~(4.5)~~—	%	$	01.8829		$	~~2.77~~		~~42.1~~	%	$	~~1.95~~
Adjusted net earnings attributable to The Kroger Co. per diluted common share	$	01.9849		34.2	%	$	01.9543		$	~~3.34~~		~~(2.3)~~	%	$	~~3.42~~
Dividends paid	$	~~231~~211		~~10.~~0.5	%	$	210		$	~~651~~		~~11.1~~	%	$	~~586~~
Dividends paid per common share	$	0.32		10.3	%	$	0.29		$	~~0.90~~		~~11.1~~	%	$	~~0.81~~
Share repurchases	$	9181		N/A		$	7103		$	~~125~~		~~N/A~~		$	54
Increase (decrease) in total debt, including obligations under finance leases compared to prior fiscal year end(1)	$	10,375		N/A		$	(615)		$	10,375		N/A		$	(615)
Increase (decrease) in total debt, including obligations under finance leases compared to prior fiscal year end	$	40		N/A		$	(7)

(1) ~~The~~For ~~increase~~the first quarter of ~~$10~~2025,~~375~~ inidentical ~~total~~sales, ~~debt~~excluding ~~was primarily due to issuing $10~~fuel,~~500~~ ofwere ~~senior~~adjusted ~~notes~~ to ~~pay~~exclude astores ~~portion~~involved ofin the ~~cash~~labor ~~consideration~~disputes ~~for~~in ~~the proposed merger with Albertsons and for general corporate purposes~~Colorado. ~~Excluding~~Identical ~~the issuances of $10~~sales,~~500~~ ofexcluding ~~senior notes~~fuel, ~~total~~were ~~debt~~excluded ~~would~~for ~~have~~the ~~decreased~~first byfour ~~$125~~weeks as of ~~November~~the 9,first ~~2024,~~quarters ~~compared~~of to2025 ~~2023 fiscal year end. For additional information, see Note 10~~ and ~~Note~~2024 11for tostores ~~the~~involved ~~Consolidated~~in ~~Financial~~this ~~Statements~~labor dispute.

2119

OVERVIEW

Notable items for the ~~third~~first quarter ~~and first three quarters~~ of ~~2024~~2025 are:

Shareholder Return

● ~~Net~~Achieved net earnings attributable to The Kroger Co. per diluted common share of $01.~~84 for the third quarter and $2.77 for the first three quarters of 2024~~29, which ~~includes~~is ~~the~~consistent ~~net~~with ~~earnings of $0.08 per diluted share from~~ the ~~sale~~first ~~of our Kroger Specialty Pharmacy business. This represents a 5% decrease for the third~~ quarter of 2024 ~~compared to the third quarter of 2023 and a 42% increase for the first three quarters of 2024 compared to the first three quarters of 2023~~.

● ~~Adjusted~~Achieved adjusted net earnings attributable to The Kroger Co. per diluted common share of $01.9849, ~~for~~which ~~the third quarter and $3.34 for the first three quarters of 2024. This~~ represents a 34% increase ~~for the third quarter of 2024~~ compared to the ~~third~~first quarter of ~~2023 and a 2% decrease for the first three quarters of~~ 2024 ~~compared to the first three quarters of 2023~~.

● Achieved operating profit of $~~828 million for the third quarter and $2~~1.93 billion, ~~for~~which ~~the first three quarters of 2024. This~~ represents a 92% ~~decrease for the third quarter of 2024 compared to the third quarter of 2023 and a 54%~~ increase ~~for the first three quarters of 2024~~ compared to the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024.

● Achieved adjusted FIFO operating profit of $1.~~0 billion for the third quarter and $3.~~5 billion ~~for the first three quarters of 2024. Adjusted FIFO operating profit remained essentially flat for the third quarter of 2024 compared to the third quarter of 2023~~, ~~and~~which ~~decreased~~represents 5a 1% ~~for~~increase ~~the first three quarters of 2024~~ compared to the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024.

● Generated cash flows from operations of $42.41 billion ~~for the first three quarters of 2024~~, which represents aan 108% decrease compared to the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024.

● Cash and temporary cash investments increased by $~~11.5~~779 ~~billion~~million from $14.90 billion as of fiscal year end ~~2023~~2024 to $~~13.~~4 ~~billion as of November 9, 2024~~.7 ~~Excluding the issuances of $10.5~~ billion ~~of senior notes, cash and temporary cash investments increased by $975 million from $1.9 billion~~ as of ~~fiscal~~May ~~year end 2023 to $2.9 billion as of November 9~~24, ~~2024~~2025.

● Returned $~~651~~392 million to shareholders ~~through~~from ~~dividend~~share ~~payments~~repurchases inand ~~the~~dividend ~~first three quarters of 2024~~payments.

Other Financial Results

● ~~The~~Identical ~~LIFO~~sales, ~~charge~~excluding ~~was~~fuel $4and ~~million~~Adjusted inItems, ~~the~~increased ~~third quarter of 2024 compared to $29 million in the third quarter of 2023~~3.2% ~~The LIFO charge was $66 million~~ in the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025, compared to ~~$131 million in~~ the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024. ~~The~~Our ~~decrease~~sales ingrowth ~~the LIFO charge~~ was ~~due~~led toby ~~our~~strong ~~lower~~pharmacy, ~~expected~~eCommerce ~~annualized~~and ~~product~~Fresh ~~cost inflation for 2024 compared to 2023~~sales.

● ~~Digital~~eCommerce sales increased 1115% in the ~~third~~first quarter ~~and 10% in the first three quarters~~ of ~~2024~~2025, compared to the ~~same~~first ~~periods~~quarter of ~~2023~~2024. ~~Digital~~eCommerce sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier. ~~Digital~~eCommerce sales growth was led by ~~the~~strong ~~strength~~demand offor our Delivery solutions. ~~Delivery~~During ~~solutions, which grew by 18% in both~~ the ~~third~~first quarter ~~and first three quarters~~ of ~~2024~~2025, ~~compared~~we todelivered ~~the~~our ~~same~~best ~~periods~~eCommerce ofprofit ~~2023,~~improvement ~~were~~yet ~~driven~~on bya ~~the~~quarter ~~growth~~over inquarter ~~demand across our Kroger Delivery Network~~basis.

● Identical sales, excluding fuel, increased 2.3% in the third quarter and 1.2% in the first three quarters of 2024, compared to the same periods of 2023. Identical sales, excluding fuel, increased in the third quarter of 2024, compared to the third quarter of 2023, primarily due to increases in total and loyal households shopping with us, increased Health and Wellness sales, partially offset by a reduction in the number of items in basket. Identical sales, excluding fuel, for the first three quarters of 2024, compared to the first three quarters of 2023, increased primarily due to increases in total and loyal households shopping with us, increased customer visits and Health and Wellness sales, partially offset by a reduction in the number of items in basket.

Significant Events

● OnDuring ~~December 11, 2024, we delivered a notice (~~the ~~“Termination~~first ~~Notice”)~~quarter toof ~~Albertsons~~2025, ~~terminating the merger agreement (the “Merger Agreement”)~~ we ~~entered~~recognized ~~into~~store ~~with~~closure ~~Albertsons~~costs onof ~~October~~$100 13million, ~~2022.~~$77 ~~The~~million ~~Termination~~net ~~Notice~~of ~~further~~tax, ~~notified~~related ~~Albertsons~~to ~~that~~the aplanned ~~prior~~closing ~~termination~~of ~~letter~~approximately ~~sent~~60 bystores ~~Albertsons~~over tothe ~~us,~~next ~~dated~~18 ~~December 10, 2024, is not an effective termination~~months. InAs ~~connection~~a ~~with~~result ~~the~~of ~~Termination~~these ~~Notice~~store closures, we ~~notified~~expect ~~Albertsons~~a ~~that~~modest wefinancial ~~have~~benefit noand ~~obligation~~we toare ~~pay~~committed ~~the Parent Termination Fee (as defined in the Merger Agreement) because Albertsons has failed~~ to ~~perform~~reinvesting ~~and~~these ~~comply~~savings inback ~~all~~into ~~material respects with its covenants under~~ the ~~Merger~~customer ~~Agreement~~experience. ~~For~~We ~~additional~~will ~~information~~offer ~~about~~roles ~~the~~in ~~termination~~other ofstores ~~the~~to ~~Merger~~all ~~Agreement,~~associates ~~see~~currently ~~Note~~employed 11at to the ~~Consolidated~~affected ~~Financial Statements~~stores.

● OnIn ~~October~~addition 4,to ~~2024, we completed~~ the ~~sale~~recurring ofmulti-employer ~~our~~pension ~~Kroger~~contributions ~~Specialty~~we ~~Pharmacy~~make ~~business~~in ~~to Elevance Health for $464 million. In~~ the ~~third~~normal ~~quarter~~course of ~~2024~~business, we ~~recognized~~contributed aan ~~gain~~incremental ~~on sale for~~ $7960 million, $6046 million net of tax, ~~due~~ to ~~the~~multi-employer ~~sale.~~pension ~~For the first three quarters of 2024~~plans, wehelping ~~recognized~~stabilize afuture ~~gain~~associate onbenefits ~~sale~~and ~~for~~allowing ~~$79~~us ~~million,~~to ~~$91~~pre-fund ~~million~~future ~~net~~requirements. ofTotal ~~tax,~~multi-employer ~~which~~pension ~~includes~~contributions ~~the~~drove ~~reduction~~a to29 ~~income~~basis ~~tax~~point ~~expense~~increase ofin ~~$31~~our ~~million~~operating, ~~related~~general toand ~~deferred~~administrative ~~tax~~expenses ~~assets~~(“OG&A”) ~~recognized~~rate in the first quarter of ~~2024~~2025, ~~due~~compared to ~~recording Kroger Specialty Pharmacy as held for sale. The sale reduced total company sales in~~ the ~~third~~first quarter of 2024 ~~by approximately $340 million, compared to~~ (the ~~same~~“2025 ~~period~~Multi-Employer ofPension ~~2023, and annualized sales will be approximately $3 billion lower going forward~~Contributions”). Kroger Specialty Pharmacy was a low margin business. As a result, the sale of the business increased both our gross margin and operating, general and administrative costs as a rate of sales. It had no material effect on operating profit.

~~● On August~~ 20, 2024, we successfully issued $10.5 billion of senior notes to pay a portion of the cash consideration for the proposed merger and for general corporate purposes. In connection with the termination of the Merger Agreement, we sent a notice to the trustee in respect of the $4.7 billion of the senior notes that included a special mandatory redemption feature, setting a redemption date of December 18, 2024 (the “special mandatory redemption date”) to redeem these senior notes at a redemption price equal to 101% of their principal amount, plus accrued and unpaid interest to, but excluding, the special mandatory redemption date. The interest expense associated with these senior notes was offset by interest income earned on the proceeds of these senior notes. For additional information about the issuance of these senior notes, see Note 2, Note 10 and Note 11 to the Consolidated Financial Statements.

USE OF NON-GAAP FINANCIAL MEASURES

The accompanying Consolidated Financial Statements, including the related notes, are presented in accordance with 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., ~~Merchandise~~rent ~~costs~~and ~~exclude~~ depreciation and ~~rent expenses~~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.

23We 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.

WeThe ~~calculate~~adjusted ~~FIFO~~net ~~operating~~earnings, ~~profit~~adjusted asnet ~~operating~~earnings ~~profit~~per ~~excluding~~diluted ~~the~~share ~~LIFO~~and ~~charge.~~adjusted FIFO operating profit ismetrics anare important ~~measure~~measures used by management ~~and~~to ~~management~~compare ~~believes~~the performance of core operating results between periods. We believe adjusted net earnings, adjusted net earnings per diluted share and adjusted FIFO operating profit isare a useful ~~metric~~metrics to investors and analysts because itthey ~~measures~~present ~~the~~more ~~operational~~accurate ~~effectiveness~~year-over-year comparisons of our ~~financial~~net ~~model~~earnings, net earnings per diluted share and FIFO operating profit because adjusted items are not the result of our normal operations. Net earnings for the first quarter of 2025 include the following, which we define as the “2025 Adjusted Items”:

~~The~~● ~~adjusted~~Charges ~~net~~to ~~earnings,~~OG&A ~~adjusted~~of ~~net~~$100 ~~earnings~~million, ~~per~~$77 ~~diluted~~million ~~share~~net ~~and~~of ~~adjusted~~tax, ~~FIFO~~for ~~operating~~store ~~profit~~closures; ~~metrics~~$15 ~~are~~million, ~~important~~$11 ~~measures~~million ~~used~~net ~~by management to compare the performance~~ of ~~core~~tax, ~~operating~~for ~~results~~merger-related ~~between~~litigation ~~periods.~~costs; We$22 ~~believe~~million, ~~adjusted~~$17 million net ~~earnings~~of tax, ~~adjusted~~for ~~net~~opioid ~~earnings~~settlement ~~per~~charges ~~diluted share~~ and ~~adjusted~~vendor ~~FIFO~~reserves ~~operating~~and ~~profit~~a ~~are~~credit ~~useful metrics~~ to ~~investors~~OG&A ~~and analysts because they present more accurate year-over-year comparisons~~ of ~~our~~$21 ~~net earnings~~million, ~~net~~$16 ~~earnings~~million ~~per~~net ~~diluted share and FIFO operating profit because adjusted items are not the result~~ of ~~our~~tax, ~~normal~~for ~~operations.~~executive ~~Net~~stock ~~earnings~~compensation for ~~the~~a ~~first~~former ~~three~~executive ~~quarters of 2024 include~~ (the ~~following, which we define as the~~ “~~2024~~2025 OG&A Adjusted Items”:).

● ~~Charges~~A toloss ~~operating,~~in ~~general~~other ~~and~~income ~~administrative expenses~~ (~~“OG&A”~~expense) of $~~509~~19 million, $~~411~~15 million net of tax, for ~~merger~~the ~~related~~unrealized ~~costs~~loss on investments (the “~~2024~~2025 ~~OG&A~~Other Income (Expense) Adjusted Item”).

● A ~~loss~~reduction into ~~other~~ income (tax expense) of $~~125~~7 million, ~~$96~~for ~~million~~executive ~~net~~stock ofcompensation ~~tax,~~ for ~~the unrealized loss on investments and~~ a ~~gain~~former inexecutive ~~other~~ income ~~(expense) of $79 million, $60 million net of~~ tax, onadjustment ~~the sale of Kroger Specialty Pharmacy~~ (the “~~2024~~2025 ~~Other~~ Income (Tax Expense) Adjusted ~~Items~~Item”).

● A ~~reduction~~net charge to ~~income~~Sales, ~~tax~~Merchandise ~~expense~~costs and OG&A of $3144 million, ~~due~~$33 tomillion anet ~~held~~of ~~for sale income~~ tax, ~~adjustment~~for ~~related~~labor todispute ~~the~~charges ~~sale of our Kroger Specialty Pharmacy business~~ (the “~~2024~~Labor ~~Income Tax Expense Adjusted Item~~Dispute”).

Net earnings for the ~~third~~first quarter of 2024 include the following, which we define as the “2024 ~~Third Quarter~~ Adjusted Items”:

● Charges to OG&A of $~~186~~175 million, $~~145~~143 million net of tax, for merger related costs (the “2024 ~~Third Quarter~~ OG&A Adjusted Item”).

● A ~~loss~~gain in other income (expense) of $2016 million, $1612 million net of tax, for the ~~unrealized~~gain ~~loss~~ on investments ~~and a gain in other income~~ (~~expense) of $79 million, $60 million net of tax, on~~ the ~~sale of Kroger Specialty Pharmacy (the~~ “2024 ~~Third Quarter~~ Other Income (Expense) Adjusted ~~Items~~Item”).

~~Net~~● ~~earnings~~A ~~for~~reduction ~~the~~to ~~first~~income ~~three~~tax ~~quarters~~expense of ~~2023~~$31 ~~include~~million due to a held for sale income tax adjustment related to the ~~following,~~sale ~~which~~of weour ~~define~~Kroger asSpecialty Pharmacy business (the “~~2023~~2024 Income Tax Expense Adjusted ~~Items~~Item”:).

● Charges to OG&A of $178 million, $153 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 $317 million, $244 million net of tax, for the unrealized gain on investments (the “2023 Other Income (Expense) Adjusted Item”).

Net earnings for the third quarter of 2023 include the following, which we define as the “2023 Third Quarter Adjusted Items”:

● Charges to OG&A of $84 million, $73 million net of tax, for merger related costs (the “2023 Third Quarter OG&A Adjusted Item”).

● A gain in other income (expense) of $27 million, $21 million net of tax, for the unrealized gain on investments (the “2023 Third Quarter Other Income (Expense) Adjusted Item”).

Please refer to the “Net Earnings per Diluted Share excluding the Adjusted Items” table below for reconciliations of certain non-GAAP financial measures reported in this Quarterly Report on Form 10-Q to the most comparable GAAP financial measures and related disclosure.

2421

The following table 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 ~~2024~~2025 and ~~2023~~2024 Adjusted Items:

Net Earnings per Diluted Share excluding the Adjusted Items

($ in millions, except per share amounts)


	~~Third~~First Quarter Ended						~~Three Quarters Ended~~
	~~November~~May 924,		~~November~~May 425,		Percentage		~~November 9,~~		~~November 4,~~		~~Percentage~~
	~~2024~~2025		~~2023~~2024		Change		~~2024~~		~~2023~~		~~Change~~
Net earnings attributable to The Kroger Co.	$	~~618~~866	$	~~646~~947			$	~~2,031~~	$	~~1,428~~

(Income) expense adjustments
Adjustment for loss (gain) on investments(1)(2)		1615		(2112)				96		~~(244)~~
Adjustment for merger related costs(1)(3)		145		73				411		153
Adjustment for labor dispute charges(1)(3)		33		—
Adjustment for opioid settlement charges(1)(4)		—		—				—		1,163
Adjustment for store closures(1)(4)		77		—
Adjustment for gain on sale of Kroger Specialty Pharmacy(1)(5)		(60)		—				(60)		—
Adjustment for executive stock compensation for a former executive(1)(5)		(16)		—
Held for sale income tax adjustment		—		—				(31)		—
Adjustment for merger-related costs(1)(6)		—		143
2024 and 2023 Adjusted Items		101		52				416		1,072
Adjustment for merger-related litigation costs(1)(7)		11		—

Adjustment for opioid settlement charges and vendor reserves(1)(8)		17		—
Net earnings attributable to The Kroger Co. excluding the Adjusted Items	$	719	$	698	3.0	%	$	2,447	$	2,500	(2.1)	%
Executive stock compensation for a former executive income tax adjustment		(7)		—

Held for sale income tax adjustment		—		(31)
Net earnings attributable to The Kroger Co. per diluted common share	$	0.84	$	0.88			$	2.77	$	1.95
2025 and 2024 Adjusted Items		130		100

(Income) expense adjustments
Net earnings attributable to The Kroger Co. excluding the Adjusted Items	$	996	$	1,047	(4.9)	%
Adjustment for loss (gain) on investments(6)		0.02		(0.03)				0.13		(0.34)

Adjustment for merger related costs(6)		0.20		0.10				0.56		0.21
Net earnings attributable to The Kroger Co. per diluted common share	$	1.29	$	1.29
Adjustment for opioid settlement charges(6)		—		—				—		1.60

Adjustment for gain on sale of Kroger Specialty Pharmacy(6)		(0.08)		—				(0.08)		—
(Income) expense adjustments
Held for sale income tax adjustment(6)		—		—				(0.04)		—
Adjustment for loss (gain) on investments(9)		0.02		(0.02)
2024 and 2023 Adjusted Items		0.14		0.07				0.57		1.47
Adjustment for labor dispute charges(9)		0.05		—

Adjustment for store closures(9)		0.12		—
Adjusted net earnings attributable to The Kroger Co. per diluted common share	$	0.98	$	0.95	3.2	%	$	3.34	$	3.42	(2.3)	%
Adjustment for executive stock compensation for a former executive(9)		(0.03)		—

Adjustment for merger-related costs(9)		—		0.20
Average number of common shares used in diluted calculation		728		725				728		725
Adjustment for merger-related litigation costs(9)		0.02		—
Adjustment for opioid settlement charges and vendor reserves(9)		0.03		—
Executive stock compensation for a former executive income tax adjustment(9)		(0.01)		—
Held for sale income tax adjustment(9)		—		(0.04)
2025 and 2024 Adjusted Items		0.20		0.14

Adjusted net earnings attributable to The Kroger Co. per diluted common share	$	1.49	$	1.43	4.2	%

Average number of common shares used in diluted calculation		664		727

(1)	The amounts presented represent the after-tax effect of each adjustment, which was calculated using discrete tax rates.

(2) The pre-tax ~~adjustments~~adjustment for loss (gain) on investments ~~were~~was $2019 in the ~~third~~first quarter of ~~2024~~2025 and $(2716) in the ~~third~~first quarter of ~~2023. The pre-tax adjustments for loss (gain) on investments were $125 in the first three quarters of~~ 2024 ~~and $(317) in the first three quarters of 2023~~.

(3) The pre-tax adjustment for ~~merger~~labor ~~related~~dispute ~~costs~~charges was $~~186 in the third quarter of 2024 and $84 in the third quarter of 2023~~44. The pre-tax adjustment for merger related costs was $509 in the first three quarters of 2024 and $178 in the first three quarters of 2023. Merger related costs primarily include third-party professional fees and the amortization of credit facility fees associated with the proposed merger with Albertsons.

(4) The pre-tax adjustment for ~~opioid~~store ~~settlement~~closures ~~charges~~ was $~~1,475 in the first three quarters of 2023~~100.

(5) The pre-tax adjustment for ~~gain~~executive onstock ~~sale~~compensation offor ~~Kroger~~a ~~Specialty~~former ~~Pharmacy~~executive was $(7921).

(6) The ~~amount~~pre-tax ~~presented~~adjustment ~~represents~~for ~~the~~merger-related ~~net~~costs ~~earnings~~was ~~(loss) per diluted common share effect of each adjustment~~$175.

(7)	The pre-tax adjustment for merger-related litigation costs was $15.

(8)	The pre-tax adjustment for opioid settlement charges and vendor reserves was $22.

(9)	The amount presented represents the net earnings (loss) per diluted common share effect of each adjustment.

2522

RESULTS OF OPERATIONS

Sales

Total Sales

($ in millions)


	~~Third~~First Quarter Ended								~~Three Quarters Ended~~
	~~November~~May 924,		Percentage		~~November~~May 425,		Percentage		~~November 9,~~		~~Percentage~~		~~November 4,~~		~~Percentage~~
	~~2024~~2025		Change(1)		~~2023~~2024		Change(2)		~~2024~~		~~Change(3)~~		~~2023~~		~~Change(4)~~
Total sales to retail customers without fuel(5)	$	30,023	1.5	%	$	29,580	(0.7)	%	$	99,995	1.0	%	$	98,972	1.4	%
Total sales to retail customers without fuel(3)	$	40,401	1.1	%	$	39,967	0.6	%
Supermarket fuel sales		34,~~335~~340	(1812.85)	%		4,~~105~~958	(12.97)	%		~~11,930~~	~~(9.3)~~	%		~~13,154~~	~~(13.1)~~	%
Other sales(6)		276	1.5	%		272	15.3	%		890	4.8	%		849	17.6	%
Other sales(4)		377	9.6	%		344	6.8	%

Total sales	$	3345,~~634~~118	(1.0.3)	%	$	3345,~~957~~269	(0.7)2	%	$	~~112,815~~	~~(0.1)~~	%	$	~~112,975~~	~~(0.4)~~	%

(1) This column represents the percentage change in the ~~third~~first quarter of ~~2024~~2025, compared to the ~~third~~first quarter of ~~2023~~2024.

(2) This column represents the percentage change in the ~~third~~first quarter of ~~2023~~2024, compared to the ~~third~~first quarter of ~~2022~~2023.

(3) ~~This~~eCommerce ~~column~~sales ~~represents~~are included in the ~~percentage~~“Total ~~change~~sales to retail customers without fuel” line above. eCommerce sales increased 15% in the first ~~three~~quarter ~~quarters~~of 2025, compared to the first quarter of 2024. eCommerce sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier. eCommerce sales growth was led by strong demand for our Delivery solutions, which grew by 20% in the first quarter of 2025, compared to the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024.

(4) ~~This~~Other ~~column~~sales ~~represents~~primarily ~~the~~relate ~~percentage~~to ~~change~~external sales at food production plants, third-party media revenue and data analytic services. The increase in the first ~~three~~quarter ~~quarters~~ of ~~2023~~2025, compared to the first ~~three~~quarter ~~quarters~~ of ~~2022~~2024, is primarily due to an increase in external sales at food production plants and third-party media revenue.

(5) Digital sales are included in the “Total sales to retail customers without fuel” line above. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier. Digital sales increased 11% in the third quarter and 10% in the first three quarters of 2024, compared to the same periods of 2023. Digital sales growth was led by the strength of our Delivery solutions. Delivery solutions, which grew by 18% in both the third quarter and first three quarters of 2024, compared to the same periods of 2023, were driven by the growth in demand across our Kroger Delivery network.

(6) Other sales primarily relate to external sales at food production plants, data analytic services and third-party media revenue. The increase in the third quarter of 2024, compared to the third quarter of 2023, is primarily due to increases in external sales at food production plants and third-party media revenue, partially offset by miscellaneous other reclassifications. The increase in the first three quarters of 2024, compared to the first three quarters of 2023, is primarily due to increases in external sales at food production plants and third-party media revenue.

Total sales decreased in the ~~third~~first quarter of ~~2024~~2025, compared to the ~~third~~first quarter of ~~2023~~2024, by 1.0.3%. The decrease was primarily due to a decrease in supermarket fuel sales and the sale of Kroger Specialty Pharmacy, partially offset by an increase in total sales to retail customers without fuel. Total supermarket fuel sales decreased 1812.85% in the ~~third~~first quarter of ~~2024~~2025, compared to the ~~third~~first quarter of ~~2023~~2024, primarily due to a decrease in the average retail fuel price of 1410.91% and a decrease in fuel gallons sold of 42.57%. The decrease in the average retail fuel price was caused by a decrease in the product cost of fuel. Total sales, excluding fuel, ~~and~~ Kroger Specialty Pharmacy and the Labor Dispute, increased 23.7% in the ~~third~~first quarter of ~~2024~~2025, compared to the ~~third~~first quarter of ~~2023~~2024, which was primarily due to our identical sales increase, excluding fuel and the Labor Dispute, of 2.3.2%. Identical sales, excluding fuel and the Labor Dispute, for the ~~third~~first quarter of ~~2024~~2025, compared to the ~~third~~first quarter of ~~2023~~2024, increased primarily due to ~~increases~~increased inpharmacy, ~~total~~eCommerce and ~~loyal~~Fresh ~~households~~sales ~~shopping with us~~ and increased ~~Health~~spend ~~and~~per ~~Wellness sales~~item, partially offset by a reduction in the number of items in basket.

2623

~~Total~~We ~~sales~~calculate ~~decreased~~identical insales, ~~the~~excluding ~~first~~fuel, ~~three~~as ~~quarters~~sales ofto ~~2024~~retail customers, ~~compared~~including tosales ~~the~~from ~~first~~all ~~three~~departments ~~quarters~~at ofidentical ~~2023,~~supermarket bylocations ~~0.1%.~~and ~~The~~Delivery ~~decrease~~and ~~was~~Ship ~~primarily~~solutions. ~~due~~We todefine a ~~decrease~~supermarket inas ~~supermarket~~identical ~~fuel~~when ~~sales~~it ~~and~~has ~~the~~been ~~sale~~in ofoperation ~~Kroger~~without ~~Specialty~~expansion ~~Pharmacy,~~or ~~partially~~relocation ~~offset~~for byfive anfull ~~increase~~quarters. We ininclude ~~both~~Kroger ~~total~~Delivery sales tofrom ~~retail~~customer ~~customers~~fulfillment ~~without~~centers ~~fuel~~in ~~and~~the ~~other~~identical sales. ~~Total~~calculation ~~supermarket~~if ~~fuel~~the ~~sales~~delivery ~~decreased~~occurs ~~9.3%~~ in ~~the~~an ~~first~~existing ~~three~~Kroger ~~quarters~~supermarket ofgeography ~~2024,~~or ~~compared~~when to the ~~first~~location ~~three~~has ~~quarters~~been ofin ~~2023,~~operation ~~primarily~~for ~~due~~five tofull aquarters. ~~decrease~~Although inidentical ~~the~~sales ~~average~~is ~~retail~~a ~~fuel~~relatively ~~price~~standard ofterm, ~~6.6%~~numerous ~~and~~methods aexist ~~decrease~~for incalculating ~~fuel~~identical ~~gallons~~sales ~~sold of 2~~growth.~~9%.~~ ~~The~~As ~~decrease~~a inresult, the ~~average~~method ~~retail~~used ~~fuel price was caused~~ by aour ~~decrease~~management into ~~the~~calculate ~~product~~identical ~~cost~~sales ofmay ~~fuel.~~differ ~~Total~~from ~~sales,~~methods ~~excluding~~other ~~fuel~~companies ~~and~~use ~~Kroger~~to ~~Specialty~~calculate ~~Pharmacy,~~identical ~~increased 1~~sales.5% inIt ~~the~~is ~~first~~important ~~three quarters of 2024, compared~~ to understand the ~~first~~methods ~~three~~used ~~quarters~~by ofother ~~2023,~~companies ~~which~~to ~~was~~calculate ~~primarily~~identical ~~due~~sales tobefore comparing our identical sales ~~increase,~~to ~~excluding~~those ~~fuel,~~ of 1other such companies.~~2%.~~ ~~Identical~~Our identical sales results, excluding fuel, ~~for~~are ~~the~~summarized ~~first~~in ~~three~~the ~~quarters~~following oftables. ~~2024,~~We ~~compared~~used to the ~~first~~identical ~~three quarters of 2023~~sales, ~~increased~~excluding ~~primarily due to increases in total and loyal households shopping with us~~fuel, ~~increased~~dollar ~~customer~~figures ~~visits~~presented ~~and~~below ~~Health~~to ~~and~~calculate ~~Wellness~~percentage ~~sales,~~changes ~~partially~~for ~~offset by a reduction in~~ the ~~number~~first quarter of ~~items in basket~~2025.

We calculate identical sales, excluding fuel, as sales to retail customers, including sales from all departments at identical supermarket locations, Kroger Specialty Pharmacy business and Delivery and Ship solutions. We define a supermarket as identical when it has been in operation without expansion or relocation for five full quarters. We define Kroger Specialty Pharmacy business as identical when physical locations have been in operation continuously for five full quarters; discontinued patient therapies are excluded from the identical sales calculation starting in the quarter of transfer or termination. Starting in the first quarter of 2024, Kroger Specialty Pharmacy business was not included in identical sales due to being classified as held for sale, while they were included in identical sales in the third quarter and the first three quarters of 2023. We completed the sale of the Kroger Specialty Pharmacy business during the third quarter of 2024. We include sales from Kroger Delivery powered by Ocado 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. 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 table. We used the identical sales, excluding fuel, dollar figures presented below to calculate percentage changes for the third quarter and the first three quarters of 2024.

Identical Sales

($ in millions)


	~~Third~~Excluding ~~Quarter~~Adjusted ~~Ended~~Items(1)
	~~November~~First 9,Quarter Ended		~~Percentage~~		~~November 4,~~		~~Percentage~~
	~~2024~~May 24,		~~Change(1)~~Percentage		~~2023~~May 25,		~~Change(2)~~Percentage
Excluding Fuel	$	29,470	2.3	%	$	28,818	(0.6)	%
	2025		Change(2)		2024		Change(3)
Excluding Fuel	$	39,766	3.2	%	$	38,535	0.5	%

(1) ~~This~~Identical ~~column~~sales, ~~represents~~excluding fuel, were adjusted to exclude stores involved in the ~~percentage~~labor ~~change~~disputes in ~~identical~~Colorado. Identical sales, inexcluding fuel, were excluded for the ~~third~~first ~~quarter~~four weeks of the first quarters of 2025 and 2024, ~~compared~~for tostores ~~the~~involved ~~third~~in ~~quarter~~this oflabor ~~2023~~dispute.

(2) This column represents the percentage change in identical sales in the ~~third~~first quarter of ~~2023~~2025, compared to the ~~third~~first quarter of ~~2022~~2024.

(3)	This column represents the percentage change in identical sales in the first quarter of 2024, compared to the first quarter of 2023.


	Three Quarters Ended
	November 9,		Percentage		November 4,		Percentage
	2024		Change(1)		2023		Change(2)
Excluding Fuel	$	97,595	1.2	%	$	96,397	1.5	%

(1) This column represents the percentage change in identical sales in the first three quarters of 2024, compared to the first three quarters of 2023.

(2) This column represents the percentage change in identical sales in the first three quarters of 2023, compared to the first three quarters of 2022.


	First Quarter Ended
	May 24,		Percentage		May 25,		Percentage
	2025		Change⁽¹⁾		2024		Change⁽²⁾
Excluding Fuel	$	40,027	3.0	%	$	38,867	0.5	%

(1)	This column represents the percentage change in identical sales in the first quarter of 2025, compared to the first quarter of 2024.

(2)	This column represents the percentage change in identical sales in the first quarter of 2024, compared to the first quarter of 2023.

Gross Margin, LIFO and FIFO Gross Margin

WeOur ~~define~~ gross margin rates, as a percentage of sales, ~~minus~~were ~~merchandise~~23.0% ~~costs~~in the first quarter of 2025 and 22.0% in the first quarter of 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, ~~including~~which ~~advertising~~has a lower gross margin rate, ~~warehousing~~lower shrink, lower supply chain costs and ~~transportation.~~decreased ~~Rent~~fuel ~~expense~~sales, ~~depreciation~~which ~~and~~have ~~amortization~~a ~~expense~~lower gross margin rate, ~~and~~partially ~~interest~~offset ~~expense~~by ~~are~~increased ~~not~~pharmacy ~~included~~sales, inwhich have a lower gross margin rate.

Our gross margin rate, as a percentage of sales, was 22.85% for the third quarter of 2024, compared to 22.03% for the third quarter of 2023. This increase in rate was achieved while maintaining competitive prices and helping customers manage their budgets. The increase in rate in the third quarter of 2024, compared to the third quarter of 2023, resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower gross margin rate, lower shrink, decreased fuel sales, which have a lower gross margin rate, strong Our Brands performance and a decreased LIFO charge, partially offset by lower pharmacy margins.24

Our gross margin rate, as a percentage of sales, was 22.59% for the first three quarters of 2024, compared to 22.08% for the first three quarters of 2023. This increase in rate was achieved while maintaining competitive prices and helping customers manage their budgets. The ~~increase~~following intable ~~rate~~provides in the ~~first~~calculation ~~three quarters~~ of ~~2024, compared to the first three quarters of 2023, resulted primarily from strong Our Brands performance, decreased fuel sales, which have a lower~~ gross ~~margin~~profit ~~rate,~~and ~~lower shrink, the sale of our Kroger Specialty Pharmacy business, which has a lower~~ gross margin ~~rate,~~in ~~our~~accordance ~~ability~~with ~~to effectively manage product costs through sourcing practices and a decreased LIFO charge, partially offset by lower pharmacy margins.~~GAAP:

Our LIFO charge was $4 million in the third quarter of 2024, compared to $29 million in the third quarter of 2023. Our LIFO charge was $66 million in the first three quarters of 2024, compared to $131 million in the first three quarters of 2023. Our decreased LIFO charge for the first three quarters of 2024, compared to the first three quarters of 2023, was due to our lower expected annualized product cost inflation for 2024 compared to 2023.


	First Quarter Ended
	May 24,			May 25,
	2025			2024
Sales	$	45,118		$	45,269
Merchandise costs, including advertising, warehousing and transportation and LIFO charge, excluding rent and depreciation and amortization		34,551			35,124
Rent		18			23
Depreciation and amortization		193			181
Gross profit	$	10,356		$	9,941

Gross margin		23.0	%		22.0	%

~~Our~~We ~~FIFO~~define ~~gross margin rate, which excludes the LIFO charge, was 22.86% in the third quarter of 2024, compared to 22.11% in the third quarter of 2023. Our fuel sales lower our~~ FIFO gross margin ~~rate~~as ~~due to the very low~~ FIFO gross ~~margin~~profit ~~rate,~~divided asby ~~a percentage of~~ sales~~, of fuel sales compared to non-fuel sales~~. ~~Excluding the effect of fuel, our~~ FIFO gross ~~margin~~profit ~~rate~~is ~~increased~~calculated 51as ~~basis~~sales ~~points~~less inmerchandise ~~the~~costs, ~~third~~including ~~quarter of 2024~~advertising, ~~compared~~warehousing ~~to the third quarter of 2023. This increase in rate was achieved while maintaining competitive prices~~ and ~~helping~~transportation ~~customers~~expenses, ~~manage~~but ~~their~~excluding ~~budgets. This increase resulted primarily from~~ the ~~sale~~LIFO ~~of our Kroger Specialty Pharmacy business~~charge, ~~which~~rent ~~has a lower gross margin rate, lower shrink~~ and ~~strong~~depreciation ~~Our Brands performance, partially offset by lower pharmacy margins. Excluding the effect of fuel~~ and ~~Kroger Specialty Pharmacy, our FIFO gross margin rate increased 25 basis points in the third quarter of 2024, compared to the third quarter of 2023~~amortization.

Our fuel sales lower our FIFO gross margin rate, ~~which~~due ~~excludes~~to the ~~LIFO~~very ~~charge,~~low ~~was~~FIFO ~~22.65%~~gross inmargin ~~the~~rate, ~~first~~as ~~three~~a ~~quarters~~percentage of ~~2024~~sales, ~~compared~~of tofuel ~~22.19%~~sales incompared ~~the~~to ~~first~~non-fuel ~~three quarters of 2023~~sales. Excluding the effect of fuel and the Labor Dispute, our FIFO gross margin rate increased 2579 basis points in the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025, compared to the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024. This increase ~~in rate was achieved while maintaining competitive prices and helping customers manage their budgets. This increase~~ resulted primarily from ~~strong Our Brands performance, lower shrink,~~ the sale of our Kroger Specialty Pharmacy business, which has a lower gross margin rate, ~~our~~lower ~~ability~~shrink toand ~~effectively~~lower ~~manage~~supply ~~product~~chain costs, ~~through~~partially ~~sourcing~~offset ~~practices~~by ~~and~~increased apharmacy ~~decreased LIFO charge~~sales, ~~partially~~which ~~offset~~have bya lower ~~pharmacy~~gross ~~margins.~~margin rate. Excluding the effect of fuel, ~~and~~ Kroger Specialty Pharmacy and the Labor Dispute, our FIFO gross margin rate increased 1433 basis points in the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025, compared to the first ~~three~~quarter ~~quarters~~ of ~~2023~~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 17.546% in the ~~third~~first quarter of ~~2024~~2025 and 16.638% in the ~~third~~first quarter of ~~2023~~2024. The increase in the ~~third~~first quarter of ~~2024~~2025, compared to the ~~third~~first quarter of ~~2023~~2024, resulted primarily from the ~~2024 Third Quarter OG&A Adjusted Item, the~~ effect of decreased fuel sales, which increases our OG&A rate, as a percentage of sales, ~~increased incentive plan costs and~~ the sale of our Kroger Specialty Pharmacy business, which has a lower OG&A rate to sales, the 2025 Multi-Employer Pension Contributions, the 2025 OG&A Adjusted Items and increased healthcare costs, partially offset by the 2024 OG&A Adjusted Items and continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity ~~and the 2023 Third Quarter OG&A Adjusted Item~~.

28Our 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 63 basis points in the first quarter of 2025, compared to the first quarter of 2024. This increase resulted primarily from the sale of our Kroger Specialty Pharmacy business, which has a lower OG&A rate to sales, the 2025 Multi-Employer Pension Contributions and increased healthcare costs, partially offset by continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity.

~~OG&A~~Excluding ~~expenses,~~the aseffect ~~a percentage~~ of ~~sales~~fuel, ~~were~~Kroger ~~17.19%~~Specialty inPharmacy, the ~~first~~2025 ~~three~~OG&A ~~quarters~~Adjusted ~~of 2024 and 17.68% in the first three quarters of 2023. The decrease in the first three quarters of 2024~~Items, ~~compared to~~ the ~~first~~Labor ~~three quarters of 2023~~Dispute, ~~resulted primarily from~~ the ~~2023~~2024 OG&A Adjusted Items and ~~continued~~the ~~execution~~2025 ~~of broad~~Multi-~~based~~Employer ~~cost~~Pension ~~savings initiatives that drive administrative efficiencies~~Contributions, ~~including store productivity, partially offset by the effect of decreased fuel sales, which increases~~ our OG&A rate, aswas arelatively ~~percentage~~flat ~~of sales, increased incentive plan costs, planned investment~~ in ~~associates,~~ the ~~sale~~first quarter of ~~our Kroger Specialty Pharmacy business~~2025, ~~which~~compared ~~has a lower OG&A rate~~ to ~~sales, and~~ the ~~2024~~first ~~OG&A~~quarter ~~Adjusted~~of ~~Item~~2024.

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 2024 Third Quarter OG&A Adjusted Item and the 2023 Third Quarter OG&A Adjusted Item, our OG&A rate increased 22 basis points in the third quarter of 2024, compared to the third quarter of 2023. This increase resulted primarily from increased incentive plan costs and the sale of our Kroger Specialty Pharmacy business, which has a lower OG&A rate to sales, partially offset by continued execution of broad-based cost savings initiatives that drive administrative efficiencies, including store productivity. Excluding the effect of fuel, Kroger Specialty Pharmacy, the 2024 Third Quarter OG&A Adjusted Item and the 2023 Third Quarter OG&A Adjusted Item, our OG&A rate increased 5 basis points in the third quarter of 2024, compared to the third quarter of 2023.

Excluding the effect of fuel, the 2024 OG&A Adjusted Item and the 2023 OG&A Adjusted Items, our OG&A rate increased 35 basis points in the first three quarters of 2024, compared to the first three quarters of 2023. This increase resulted primarily from increased incentive plan costs, planned investments in associates and the sale of our Kroger Specialty Pharmacy business, which has a lower OG&A rate to sales, partially offset by the broad-based improvement from cost savings initiatives that drive administrative efficiencies, including store productivity. Excluding the effect of fuel, Kroger Specialty Pharmacy, the 2024 OG&A Adjusted Item and the 2023 OG&A Adjusted Items, our OG&A rate increased 29 basis points in the first three quarters of 2024, compared to the first three quarters of 2023.

Rent Expense

Rent expense remained relatively consistent, as a percentage of sales, for the ~~third~~first quarter ~~and the first three quarters~~ of ~~2024~~2025, compared to the ~~same~~first ~~periods~~quarter of ~~2023~~2024.

Depreciation and Amortization Expense

Depreciation and amortization expense increased, as a percentage of sales, in the ~~third~~first quarter ~~and first three quarters~~ of ~~2024~~2025, compared to the ~~same~~first ~~periods~~quarter of ~~2023~~2024. This increase was primarily due to ~~additional~~the sale of our Kroger Specialty Pharmacy business, which has a lower depreciation ~~associated~~& ~~with~~amortization ~~higher~~rate to sales, additional depreciation on capital investments, excluding mergers and lease buyouts, of $3.6 billion during the rolling four quarter period ending with the ~~third~~first quarter of ~~2024~~2025 and a decrease in the average useful life on these capital investments.

Operating Profit and FIFO Operating Profit

Operating profit was $~~828~~1.3 ~~million~~billion, or 2.593% of sales, for the ~~third~~first quarter of ~~2024~~2025, compared to $~~912~~1.3 ~~million~~billion, or 2.786% of sales, for the ~~third~~first quarter of ~~2023~~2024. Operating profit, as a percentage of sales, ~~decreased~~increased 227 basis points in the ~~third~~first quarter of ~~2024~~2025, compared to the ~~third~~first quarter of ~~2023~~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~~, and a decrease in fuel operating profit, partially offset by a higher FIFO gross margin rate and a decreased LIFO charge~~.

~~Operating~~FIFO operating profit was $21.94 billion, or 23.602% of sales, for the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025, compared to $1.93 billion, or 12.795% of sales, for the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024. ~~Operating~~FIFO operating profit, as a percentage of sales, excluding the 2025 and 2024 Adjusted Items, increased 923 basis points in the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025, compared to the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024, primarily due to ~~decreased OG&A expenses, as~~ a ~~percentage of sales, a~~ higher FIFO gross margin rate ~~and a decreased LIFO charge~~, partially offset by increased OG&A and depreciation and amortization expenses, as a percentage of sales~~, and a decrease in fuel operating profit~~.

FIFO operating profit was $832 million, or 2.5% of sales, for the third quarter of 2024, compared to $941 million, or 2.8% of sales, for the third quarter of 2023. FIFO operating profit, as a percentage of sales, excluding the 2024 and 2023 Third Quarter Adjusted Items, remained primarily flat in the third quarter of 2024, compared to the third quarter of 2023.

FIFO operating profit was $3.0 billion, or 2.7% of sales, for the first three quarters of 2024, compared to $2.0 billion, or 1.8% of sales, for the first three quarters of 2023. FIFO operating profit, as a percentage of sales, excluding the 2024 and 2023 Adjusted Items, decreased 15 basis points in the first three quarters of 2024, compared to the first three quarters of 2023, due to increased OG&A and depreciation and amortization expenses, as a percentage of sales, and a decrease in fuel operating profit, partially offset by a higher FIFO gross margin rate and a decreased LIFO charge.

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 ~~2024~~2025 and ~~2023~~2024 Adjusted Items:

Operating Profit excluding the Adjusted Items

($ in millions)


	~~Third~~First Quarter Ended				~~Three Quarters Ended~~
	~~November~~May 924,		~~November~~May 425,		~~November 9,~~		~~November 4,~~
	~~2024~~2025		~~2023~~2024		~~2024~~		~~2023~~
Operating profit	$	~~828~~1,322	$	~~912~~1,294	$	~~2,937~~	$	~~1,902~~
LIFO charge		440		2941		66		~~131~~

FIFO Operating profit		~~832~~1,362		~~941~~1,335		~~3,003~~		~~2,033~~

Adjustment for merger related costs(1)		186		84		509		178
Adjustment for merger-related costs(1)		—		175
Adjustment for opioid settlement charges		—		—		—		1,475
Adjustment for merger-related litigation costs		15		—
Other		(1)		(3)		(12)		(6)
Adjustment for opioid settlement charges and vendor reserves		22		—

Adjustment for labor dispute charges		44		—
2024 and 2023 Adjusted items		185		81		497		1,647
Adjustment for store closures		100		—

Adjustment for executive stock compensation for a former executive		(21)		—
Adjusted FIFO operating profit excluding the adjusted items above	$	1,017	$	1,022	$	3,500	$	3,680
Other		(4)		(11)

2025 and 2024 Adjusted items		156		164

Adjusted FIFO operating profit excluding the adjusted items above	$	1,518	$	1,499

(1) Merger -related costs primarily include third-party professional fees and ~~the amortization of~~ credit facility fees associated with the ~~proposed~~terminated merger with Albertsons Companies, Inc.

3026

Net Interest Expense

Net interest expense ~~decreased~~totaled ~~for~~$199 ~~the~~million ~~third~~in ~~quarter~~the ~~and~~ first ~~three~~quarter ~~quarters~~ of ~~2024~~2025, compared to ~~the same periods of 2023. Excluding the proceeds of the~~ $~~10.5~~123 ~~billion~~million ~~issuance of senior notes~~ in the ~~third~~first quarter of 2024,. This ~~net~~increase ~~interest~~resulted ~~expense decreased~~ primarily ~~due~~from to increased ~~interest~~average ~~income~~total ~~earned~~outstanding ondebt ~~our~~in ~~cash and temporary cash investments due to increased balances of cash and temporary cash investments throughout~~ the ~~third~~first quarter ~~and the first three quarters~~ of ~~2024~~2025, compared to the ~~same~~first ~~periods~~quarter of ~~2023, and decreased average total debt throughout~~ 2024, ~~compared~~from ~~to 2023. For~~ the ~~$10.5~~net ~~billion~~proceeds of the senior notes ~~issued~~issuance induring the third quarter of 2024, ~~the~~partially offset by increased interest ~~expense~~income ~~associated~~earned ~~with~~due ~~these~~to ~~senior~~increased ~~notes~~balances ~~was~~of ~~offset~~cash byand ~~interest~~temporary ~~income~~cash ~~earned~~investments onin the ~~proceeds~~first quarter of ~~these~~2025, ~~senior~~compared ~~notes~~to the first quarter of 2024.

Income Taxes

The effective income tax rate was 2321.3% for the ~~third~~first quarter of ~~2024~~2025 and 2319.~~9% for the third quarter of 2023. The effective income tax rate was 21.~~8% for the first ~~three~~quarter ~~quarters~~ of 2024 ~~and 24~~.8% ~~for the first three quarters of 2023.~~ The effective income tax rate for the ~~third~~first quarter of ~~2024~~2025 differed from the federal statutory rate due to the effect of state income taxes, partially offset by the utilization of tax credits and deductions. including the benefit from share-based payments, which includes the 2025 Income Tax Expense Adjusted Item. The effective income tax rate for the first ~~three~~quarter ~~quarters~~ of 2024 differed from the federal statutory rate due to ~~the effect of state income taxes, partially offset by~~ a tax benefit related to classifying Kroger Specialty Pharmacy as held for sale and the utilization of tax credits and deductions~~. The effective income tax rate for the third quarter of 2023 differed from the federal statutory rate due to the effect of state income taxes and certain nondeductible expenses~~, partially offset by the ~~utilization of tax credits. The effective income tax rate for the first three quarters of 2023 differed from the federal statutory rate due to the~~ effect of state income taxes~~, the nondeductible portion of opioid settlement charges and certain nondeductible expenses, partially offset by the utilization of tax credits~~.

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 $01.8429 per diluted share for the ~~third~~first quarter of ~~2024~~2025 ~~represented~~was aconsistent ~~decrease~~with ~~of 4.5% compared to~~ net earnings of 0$1.8829 per diluted share for the ~~third~~first quarter of ~~2023~~2024. Excluding the 2025 and 2024 Adjusted Items, adjusted net earnings of $01.9849 per diluted share for the ~~third~~first quarter of ~~2024~~2025 represented an increase of 34.2% compared to adjusted net earnings of $01.9543 per diluted share for the ~~third~~first quarter of ~~2023~~2024. The increase in adjusted net earnings per diluted share resulted primarily from increased adjusted FIFO operating profit, ~~excluding~~lower ~~fuel,~~income atax ~~decreased~~expense ~~LIFO charge~~ and lower ~~net~~common ~~interest~~shares ~~expense~~outstanding, partially offset by ~~decreased~~increased ~~fuel~~net ~~earnings~~interest expense.

Net earnings of $2.77 per diluted share for the first three quarters of 2024 represented an increase of 42.1% compared to net earnings of $1.95 per diluted share for the first three quarters of 2023. Adjusted net earnings of $3.34 per diluted share for the first three quarters of 2024 represented a decrease of 2.3% compared to adjusted net earnings of $3.42 per diluted share for the first three quarters of 2023. The decrease in adjusted net earnings per diluted share resulted primarily from decreased FIFO operating profit, excluding fuel, and decreased fuel earnings, partially offset by a decreased LIFO charge, lower net interest expense and lower income tax expense.27

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow Information

The following table summarizes our net increase in cash and temporary cash investments for the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025 and ~~2023~~2024:


	~~Three Quarters Ended~~
	~~November~~First 9,Quarter Ended		~~November 4,~~
	~~2024~~May 24,		~~2023~~May 25,
	2025		2024
Net cash provided by (used in)
Operating activities	$	42,~~390~~149	$	42,~~868~~342
Investing activities		(21,~~402~~039)		(21,~~745~~014)
Financing activities		~~9,487~~(331)		(~~1,413~~348)
Net increase in cash and temporary cash investments	$	~~11,475~~779	$	~~710~~980

Net cash provided by operating activities

We generated $42.41 billion of cash from operations in the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025 compared to $42.~~9 billion in the first three quarters of 2023. Net earnings including noncontrolling interests, adjusted for non-cash items, generated approximately $5.~~3 billion ~~of operating cash flow~~ in the first ~~three~~quarter ~~quarters~~ of 2024 ~~compared to $4~~.1 billion in the first three quarters of 2023. Cash (used) provided by operating activities for changes in operating assets and liabilities, including working capital, was $(874) million in the first three quarters of 2024 compared to $818 million in the first three quarters of 2023. The decrease in cash ~~provided~~generated byfrom ~~operating~~operations ~~activities for changes in operating assets and liabilities, including working capital,~~ was primarily due to the following:

● Cash flows for ~~accounts~~inventory ~~receivable~~ were less favorable for the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025, compared to the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024, ~~primarily~~ due to strategic forward buys made during the ~~following:~~first quarter of 2025; and

o● ACash ~~decrease~~flows for accounts payable were more favorable in ~~pharmacy~~the ~~receivables~~first quarter of 2024, compared to the first quarter of 2025, due to an increase in accounts payable at the end of the ~~third~~first quarter of ~~2023~~2024, compared to fiscal year end ~~2022~~2023, primarily due to ~~the~~timing ~~termination~~ of ~~our~~payments ~~agreement~~and ~~with~~management’s ~~Express~~focus ~~Scripts~~on working capital improvements;

o● APartially ~~decrease~~offset by cash flows for prepaid and other current assets were more favorable in ~~income~~the ~~taxes~~first ~~receivable~~quarter of 2025, compared to the first quarter of 2024, due to an increase in prepaid and other current assets at the end of the ~~third~~first quarter of ~~2023~~2024, compared to fiscal year ~~2022~~end 2023, primarily ~~due~~related to ~~applying~~an ~~our~~escrow ~~overpayment~~payment infor ~~2022~~settlement tocharges ~~our~~under ~~estimated~~the ~~tax~~nationwide ~~payments~~opioid ~~for~~settlement ~~2023; and~~framework.

oCash Anpaid ~~increase~~for interest increased in ~~pharmacy~~the ~~receivables~~first atquarter of 2025, compared to the ~~end~~first quarter of 2024, primarily due to increased interest payments related to the $5.8 billion of senior notes issued in the third quarter of 2024 and not redeemed in the fourth quarter of 2024. Cash paid for taxes increased in the first quarter of 2025, compared to ~~fiscal~~the ~~year~~first ~~end~~quarter ~~2023~~of 2024, primarily due to ~~timing~~applying ofa ~~cash~~2023 ~~receipts~~tax ~~and~~overpayment ~~increased~~to ~~Health~~reduce ~~and~~our ~~Wellness~~estimated ~~sales;~~tax payments in 2024.

● An increase in long-term liabilities at the end of the third quarter of 2023, compared to fiscal year end 2022, primarily due to an increase in the noncurrent portion of our accrued opioid settlement charges;

● An increase in accounts payable at the end of the third quarter of 2023, compared to fiscal year end 2022, primarily due to timing of payments and management’s focus on working capital improvements;

● Partially offset by cash flows for accrued expenses were more favorable for the first three quarters of 2024, compared to the first three quarters of 2023, primarily due to the following:

o A smaller decrease in accrued incentive plan costs at the end of third quarter of 2024, compared to fiscal year end 2023, than the decrease at the end of third quarter of 2023, compared to fiscal year end 2022, primarily due to the following:

◾ A decrease in accrued incentive plan costs at the end of the third quarter of 2023, compared to fiscal year end 2022;

◾ Partially offset by a decrease in accrued incentive plan costs at the end of the third quarter of 2024, compared to fiscal year end 2023, primarily due to a semi-annual incentive payment made to store employees in the third quarter of 2024;

o A decrease in our commitments due to the UFCW International Union-Industry Pension Fund (“National Fund”) at the end of the third quarter of 2023, compared to fiscal year end 2022, as a result of the final contractual payment related to the multi-employer pension plan withdrawal liability charge we incurred in 2020; and

o An increase in accrued interest expense at the end of the third quarter of 2024, compared to fiscal year end 2023, primarily due to accrued interest expense associated with the $10.5 billion senior notes issuance;

o Partially offset by an increase in accrued legal expenses at the end of the third quarter of 2023, compared to fiscal year end 2022, primarily due to an increase in the current portion of our accrued opioid settlement charges; and

o An increase in accrued expenses for our pharmacy distillery business at the end of the third quarter of 2023, compared to fiscal year end 2022, primarily due to the timing of payments as a result of management’s focus on working capital improvements.

Cash paid for net interest decreased in the first three quarters of 2024, compared to the first three quarters of 2023, primarily due to increased interest income earned on our increased balances of cash and temporary cash investments throughout the first three quarters of 2024. In addition, interest payments for the $10.5 billion of senior notes issued in the third quarter of 2024 are not due until the beginning of fiscal year 2025.

Net cash used by investing activities

Investing activities used cash of $21.40 billion in both the first ~~three~~ quarters of ~~2024~~2025 ~~compared~~and ~~to $2~~2024.7 ~~billion in the first three quarters of 2023.~~ The amount of cash used by investing activities ~~decreased~~remained consistent in the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025, compared to the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024, primarily due to ~~the~~a ~~net~~decrease ~~proceeds from the sale of our Kroger Specialty Pharmacy business~~ in the ~~third quarter of 2024 and an increase in~~ proceeds from the sale of assets ~~related~~due to the sale of an equity method investment in the first ~~three~~quarter ~~quarters~~ of 2024, which was ~~partially~~ offset by ~~increased~~a decrease in payments for property and equipment, including payments for lease buyouts, in the first quarter of 2025, compared to the first quarter of 2024.

Net cash ~~provided (~~used) by financing activities

~~Cash~~The ~~provided~~cash (used) byfor financing activities ~~was~~of $~~9.5~~331 ~~billion~~million in the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025 ~~compared~~was toconsistent ~~$(1.4)~~with ~~billion in~~ the ~~first three quarters of 2023. The amount of~~ cash ~~provided~~used byfor financing activities ~~increased in the first three quarters~~ of ~~2024,~~$348 ~~compared~~million toin the first ~~three~~quarter ~~quarters~~ of ~~2023, primarily due to increased proceeds from the issuance of long-term debt and decreased payments on long-term debt including obligations under finance leases~~2024.

Capital Investments

Capital investments, ~~excluding~~including ~~mergers,~~changes ~~acquisitions~~in ~~and~~construction-in-progress ~~the~~payables ~~purchase~~and ~~of leased facilities, totaled $740 million for the third quarter of 2024 compared to $715 million for the third quarter of 2023. Capital investments,~~ excluding ~~mergers, acquisitions and~~ the purchase of leased facilities, totaled $21.~~8 billion for the first three quarters of 2024 compared to $~~2.5 billion for ~~the~~both ~~first three quarters of 2023. Capital investments increased for~~ the first ~~three~~ quarters of ~~2024,~~2025 ~~compared~~and ~~to the first three quarters of 2023, due to the completion of more store projects in~~ 2024 ~~compared to 2023~~. During the first three quarters of 2024, we opened, expanded, relocated or acquired 19 supermarkets and completed 170 remodels. During the first three quarters of 2023, we opened, expanded, relocated or acquired 8 supermarkets and completed 148 remodels. During the rolling four quarter period ended with the ~~third~~first quarter of ~~2024~~2025, we opened, expanded, relocated or acquired 2127 supermarkets and completed ~~269~~210 remodels. We define a remodel as a project that ~~exceeds~~is agreater ~~total~~than or equal to a cost of $~~750~~8 ~~thousand~~per square foot. Total supermarket square footage at the end of the ~~third~~first quarter of ~~2024~~2025 increased 0.79% from the end of the ~~third~~first quarter of ~~2023~~2024. Excluding mergers, acquisitions and operational closings, total supermarket square footage at the end of the ~~third~~first quarter of ~~2024~~2025 increased 01.91% over the end of the ~~third~~first quarter of ~~2023~~2024.

Debt Management

As of ~~November~~May 924, ~~2024~~2025, we maintained ana ~~unsecured~~$2.75 ~~revolving~~billion ~~credit facility~~ (~~the “Credit Agreement”),~~ with ~~a termination date of September 13, 2029, unless extended as permitted under~~ the ~~Credit~~ability ~~Agreement.~~to ~~This~~increase ~~Credit~~by ~~Agreement amended our~~ $2.750 billion ~~credit facility that would otherwise have terminated on July 6~~), ~~2026.~~unsecured ~~Under the Credit Agreement, the aggregate amount of initial commitments under the~~ revolving credit facility ~~is $2.75 billion~~that, ~~which~~unless ~~could have been increased by $2.25 billion to $5 billion upon the closing date of the proposed merger with Albertsons (such additional commitments~~extended, ~~the~~terminates ~~“Albertsons Closing Date Additional Commitments”). Concurrently with the termination of the Merger Agreement~~ on ~~December~~September 1113, ~~2024, the Albertsons Closing Date Additional Commitments were automatically terminated in accordance with the terms of the Credit Agreement~~2029. ~~On and after December 11, 2024, the amount of outstanding commitments under the Credit Agreement is $2.75 billion.~~ Outstanding borrowings under the credit facility, commercial paper borrowings and some outstanding letters of credit reduce funds available under the credit facility. As of ~~November~~May 924, ~~2024~~2025, 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 $1 million as of ~~November~~May 924, ~~2024~~2025.

InOur ~~connection~~bank ~~with~~credit ~~the~~facility ~~proposed~~and ~~merger~~the ~~with~~indentures ~~Albertsons,~~underlying onour ~~October~~publicly ~~13,~~issued ~~2022,~~debt wecontain ~~entered into~~ a ~~commitment~~financial ~~letter with certain lenders pursuant to which the lenders have committed to provide a 364-day $17~~covenant.4 ~~billion~~As ~~senior~~of ~~unsecured~~May ~~bridge~~24, ~~term~~2025, ~~loan~~we ~~facility. The commitments~~ were ~~intended~~in tocompliance ~~be drawn to finance the proposed merger~~ with ~~Albertsons only to~~ the ~~extent~~financial ~~we did not arrange for alternative financing prior to closing~~covenant. AsFurthermore, ~~alternative~~management ~~financing~~believes ~~for~~it ~~the~~is ~~proposed~~not ~~merger~~reasonably ~~had~~likely ~~been~~that ~~secured,~~we ~~the~~will ~~commitments~~fail ~~with respect~~ to ~~the~~comply ~~bridge~~with ~~term~~this ~~loan~~financial ~~facility~~covenant ~~under the commitment letter were terminated~~ in the ~~third quarter of 2024~~future.

OnTotal ~~November 9~~debt, ~~2022,~~including weboth ~~executed a term loan credit agreement with certain lenders pursuant to which~~ the ~~lenders~~current ~~committed~~and tolong-term ~~provide,~~portions ~~contingent upon the completion~~ of ~~the~~obligations ~~proposed~~under ~~merger~~finance ~~with Albertsons and certain other customary conditions to funding~~leases, ~~(1) senior unsecured term loans in an aggregate principal amount~~ of $317.09 billion ~~maturing~~as ~~on the third anniversary~~ of ~~the~~May ~~proposed~~24, ~~merger~~2025, ~~closing~~remained ~~date~~consistent ~~and~~to ~~(2)~~our ~~senior~~fiscal ~~unsecured~~year ~~term~~end ~~loans~~2024 indebt ~~an aggregate principal amount~~ of $117.759 billion. ~~maturing~~During on the ~~date~~first ~~that~~quarter isof ~~18 months after the proposed merger closing date (collectively~~2025, ~~the~~we ~~“Term~~did ~~Loan~~not ~~Facilities”).~~have ~~Borrowings~~any ~~under~~payments ~~the~~or ~~Term~~issuances ~~Loan Facilities were to be used to pay a portion~~ of ~~the~~senior ~~consideration~~notes ~~and~~or ~~other~~borrowings ~~amounts~~or ~~payable~~payments inthat ~~connection~~occurred ~~with the proposed merger with Albertsons. Concurrently with the termination of the Merger Agreement~~ on ~~December~~our ~~11,~~revolving ~~2024,~~credit ~~all of the commitments with respect to the Term Loan Facilities were automatically terminated in accordance with the terms thereof~~facility.

~~During~~Common ~~the~~Share ~~third~~Repurchase quarter of 2024, we successfully issued $10.5 billion of senior notes to pay a portion of the cash consideration for the proposed merger and for general corporate purposes. In connection with the termination of the Merger Agreement, we sent a notice to the trustee in respect of the $4.7 billion of the senior notes that included a special mandatory redemption feature, setting a redemption date of December 18, 2024 (the “special mandatory redemption date”) to redeem these senior notes at a redemption price equal to 101% of their principal amount, plus accrued and unpaid interest to, but excluding, the special mandatory redemption date. Additionally, during the third quarter of 2024, we commenced an exchange offer for any and all outstanding notes issued by Albertsons and certain of its subsidiaries for up to approximately $7.4 billion aggregate principal amount of new senior notes to be issued by us and cash. In connection with the termination of the Merger Agreement, we terminated the exchange offer and related consent solicitations. For additional information, see Note 10 and Note 11 to the Consolidated Financial Statements.Programs

AsDuring ofthe ~~November~~first 9,quarter ~~2024~~of 2025, we ~~were~~invested in$181 ~~compliance~~million ~~with~~to ~~our~~repurchase ~~bank~~2.7 ~~credit~~million ~~facility~~Kroger ~~financial~~common ~~covenant~~shares at an average price of $67.82 ~~Furthermore~~per share. The shares repurchased in the first quarter of 2025 were reacquired under a share repurchase program announced on December 6, ~~management~~1999 ~~believes~~to itrepurchase iscommon ~~not~~shares ~~reasonably~~to ~~likely~~reduce ~~that~~dilution weresulting ~~will~~from ~~fail~~our employee stock option and long-term incentive plans, under which repurchases are limited to ~~comply~~proceeds ~~with~~received ~~the~~from ~~financial~~exercises ~~covenant~~of instock options and the ~~foreseeable~~tax ~~future~~benefits associated therewith (“1999 Repurchase Program”).

~~Total~~On ~~debt~~December 11, ~~including~~2024, ~~both~~our ~~the~~Board ~~current and long-term portions~~ of ~~obligations~~Directors ~~under~~approved ~~finance~~a ~~leases, of~~ $227.65 billion asshare ofrepurchase ~~November~~program 9,to ~~2024,~~reacquire ~~increased~~shares byvia ~~$10.4~~open ~~billion~~market ~~from~~purchase ~~our~~or ~~fiscal~~privately ~~year~~negotiated ~~end~~transactions, ~~2023~~including ~~debt~~ASR oftransactions, ~~$12.2~~block ~~billion.~~trades, ~~This~~or ~~increase~~pursuant ~~resulted~~to ~~primarily~~trades ~~from~~intending ~~the~~to ~~$10.5~~comply ~~billion~~with ~~issuance~~Rule of10b5-1 ~~senior~~under ~~notes in~~ the ~~third~~Securities ~~quarter~~Exchange Act of ~~2024. For additional information~~1934, ~~see~~as ~~Note~~amended ~~10 and Note 11 to~~ (the ~~Consolidated~~“December ~~Financial~~2024 ~~Statements~~Repurchase Program”).

34On 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. The ASR agreement will be completed under the December 2024 Repurchase Program. 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 taxes related to the shares repurchased. The total number of shares purchased by the Company pursuant to the ASR agreement will be based on the average of the volume-weighted average prices of Kroger common shares on specified dates during the term of each ASR agreement, less a discount, and subject to adjustments pursuant to the terms and conditions of the ASR agreement. Final settlement under the ASR agreement is expected to occur no later than the third fiscal quarter of our Fiscal 2025.

~~Common Share Repurchase Programs~~29

~~During~~As ~~the~~of ~~third~~May ~~quarter~~24, ~~of 2024~~2025, wethere ~~invested~~was $92.5 ~~million~~billion toremaining ~~repurchase~~under ~~approximately~~the ~~one~~December ~~hundred~~2024 ~~and~~Repurchase ~~forty-six~~Program, ~~thousand~~which ~~Kroger~~reflects ~~common~~the ~~shares~~reduction ~~at an average price~~ of ~~$55.98 per share. For~~ the ~~first~~unsettled ~~three~~accelerated ~~quarters~~share repurchases of ~~2024, we invested~~ $~~125 million to repurchase 2~~1.30 ~~million~~billion ~~Kroger~~and ~~common~~excludes ~~shares~~excise attax anon ~~average price of $54.80 per~~ share. ~~The~~repurchases ~~shares repurchased~~ in ~~the~~excess ~~third quarter and first three quarters~~ of ~~2024,~~issuances. ~~were~~Amounts ~~reacquired~~available under athe ~~share~~1999 ~~repurchase~~Repurchase ~~program~~Program ~~announced~~are ondependent ~~December~~upon 6,option ~~1999~~exercise toactivity. ~~repurchase~~The ~~common~~authority ~~shares~~remaining tounder ~~reduce~~the ~~dilution~~December ~~resulting~~2024 ~~from~~Repurchase ~~our~~Program ~~employee stock option~~ and ~~long-term~~the ~~incentive~~1999 ~~plans,~~Repurchase ~~under~~Program ~~which~~do ~~repurchases~~not ~~are~~have ~~limited~~an toexpiration ~~proceeds~~date ~~received~~but ~~from~~may ~~exercises~~be ofsuspended ~~stock~~or ~~options~~terminated ~~and~~by ~~the~~our ~~tax~~Board ~~benefits~~of ~~associated~~Directors ~~therewith~~at ~~(“1999~~any ~~Repurchase Program”)~~time.

On September 9, 2022, our Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Exchange Act (the “September 2022 Repurchase Program”). No shares have been repurchased under the September 2022 authorization. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.

On December 11, 2024, we announced that our Board of Directors terminated the September 2022 Share Repurchase Program and authorized a new share repurchase program in an aggregate amount of $7.5 billion, of which $5.0 billion is expected to be repurchased by means of an accelerated share repurchase program. The remaining amounts under the program may be repurchased by means of open market transactions, privately negotiated transactions, accelerated share repurchase programs or other derivative transactions, or any combination of the foregoing.

Liquidity Needs

We held cash and temporary cash investments of $~~13.~~4.7 billion as of ~~November~~May 924, ~~2024~~2025, which reflects ~~net proceeds from the $10.5 billion senior notes issuance in the third quarter of 2024,~~ our elevated operating performance over the last few years ~~and paused share repurchase program~~. 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 share repurchase programs and we will evaluate the optimal use of any excess free cash flow, consistent with our capital allocation strategy.

We expect to meet our short-term and long-term liquidity needs with cash and temporary cash investments on hand as of ~~November~~May 924, ~~2024~~2025, cash flows from our operating activities and other sources of liquidity, including borrowings under our commercial paper program and bank 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, additional customer fulfillment centers, 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.

Concurrently with the termination of the Merger Agreement on December 11, 2024, the commitments with respect to the Term Loan Facilities and the Albertsons Closing Date Additional Commitments were automatically terminated in accordance with the terms of the Term Loan Facilities or the Credit Agreement, as applicable. For additional information about ~~the~~our ~~termination~~debt ofactivity in the ~~proposed~~first ~~merger~~quarter ~~with~~of ~~Albertsons~~2025, see Note 102 ~~and Note 11~~ to the Consolidated Financial Statements.

For additional information about our debt activity in the first three quarters of 2024, see Note 2, Note 10 and Note 11 to the Consolidated Financial Statements.

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 critical accounting policies are summarized in Note 1 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended February 31, ~~2024~~2025.

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 vary from those estimates. There has been no material change to our critical accounting estimates since the filing of our Annual Report on Form 10-K for the fiscal year ended February 31, ~~2024~~2025.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our exposure to market risk from the information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the fiscal year ended February 31, ~~2024, with the exception of the forward-starting interest rate swaps we terminated and the treasury lock agreements we entered into and terminated during the first three quarters of 2024~~2025.

As of ~~November~~May 924, ~~2024~~2025, we had no forward-starting interest rate swap agreements or treasury lock agreements outstanding.

Item 4. Controls and Procedures.

The Interim Chief Executive Officer and the ~~Interim~~ Chief Financial Officer, together with a disclosure review committee appointed by the Interim Chief Executive Officer, evaluated Kroger’s disclosure controls and procedures as of the quarter ended ~~November~~May 924, ~~2024~~2025, the end of the period covered by this report. Based on that evaluation, Kroger’s Interim Chief Executive Officer and ~~Interim~~ Chief Financial Officer concluded that Kroger’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) of the Exchange Act) were effective as of the end of the period covered by this report to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Interim Chief Executive Officer and ~~Interim~~ Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

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 ~~November~~May 924, ~~2024~~2025. As the Company’s technology transformation project continues, the Company continues to emphasize the maintenance of effective internal control 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 ~~November~~May 924, ~~2024~~2025.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Incorporated by reference herein is information regarding certain legal proceedings in which we are involved as set forth under “Litigation” contained in Note 5 – “Commitments and Contingencies” in the Notes to the Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q.

3631

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(c)

ISSUER PURCHASES OF EQUITY SECURITIES


					Approximate
					Dollar Value of
					Shares that May
				Total Number of	Yet Be
				Shares Purchased	Purchased
	Total Number	Average		as Part of Publicly	Under the Plans
	of Shares	Price Paid Per		Announced Plans	or Programs(4)(5)
Period(1)	Purchased(2)	Share(2)		or Programs(3)	(in millions)
First four weeks
August 18, 2024 to September 14, 2024	20,230	$	55.68	1,245	$	1,000
February 2, 2025 to March 1, 2025	314,801	$	65.30	314,801	$	2,500
Second four weeks
September 15, 2024 to October 12, 2024	106,971	$	55.85	104,900	$	1,000
March 2, 2025 to March 29, 2025	1,219,341	$	65.99	716,936	$	2,500
Third four weeks
October 13, 2024 to November 9, 2024	39,500	$	56.38	39,500	$	1,000
March 30, 2025 to April 26, 2025	1,435,319	$	68.99	1,435,129	$	2,500
Total	166,701	$	55.96	145,645	$	1,000
Fourth four weeks
April 27, 2025 to May 24, 2025	208,872	$	70.65	208,820	$	2,500
Total	3,178,333	$	67.58	2,675,686	$	2,500

(1) The reported periods conform to our fiscal calendar composed of thirteen 28-day periods. The ~~third~~first quarter of ~~2024~~2025 contained ~~three~~four 28-day periods.

(2) Includes (i) shares repurchased under a program announced on December 6, 1999 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”) and (ii) 21502,~~056~~647 shares that were surrendered to the Company by participants under our long-term incentive plans to pay for taxes on restricted stock awards.

(3)	Represents shares repurchased under the 1999 Repurchase Program.

(4) On ~~September~~December 911, ~~2022~~2024, our ~~Board~~board of ~~Directors~~directors approved a $17.05 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, including accelerated share 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 “~~September~~December ~~2022~~2024 Repurchase Program”). The amounts shown in this column reflect the amount remaining under the ~~September~~December ~~2022~~2024 Repurchase Program as of the specified period end dates. Amounts available under the 1999 Repurchase Program are dependent ~~upon~~on ~~option~~ exercise activity. The ~~September~~authority ~~2022~~remaining under the December 2024 Repurchase Program and the 1999 Repurchase Program do not have an expiration date but may be suspended or terminated by our Board of Directors at any time. No shares have been repurchased under the September 2022 authorization. During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons. On December 11, 2024, we announced that our Board of Directors terminated the September 2022 Share Repurchase Program and authorized a new share repurchase program in an aggregate amount of $7.5 billion, of which $5.0 billion is expected to be repurchased by means of an accelerated share repurchase program. The remaining amounts under the program may be repurchased by means of open market transactions, privately negotiated transactions, accelerated share repurchase programs or other derivative transactions, or any combination of the foregoing.

(5)	Reflects the reduction of the unsettled accelerated share repurchase of $1.0 billion and excludes excise tax on share repurchases in excess of issuances.

Item 5. Other Information.

(c)

In the ~~third~~first quarter of ~~2024~~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.

3732

Item 6. Exhibits.


EXHIBIT 2.1	-	Agreement and Plan of Merger, dated as of October 13, 2022, by and among the Company, Parent and Merger Sub, is hereby incorporated by reference to Exhibit 2.1 of the Company’s 8-K filed with the SEC on October 14, 2022.

EXHIBIT 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.

EXHIBIT 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.

EXHIBIT 4.1	-	Indenture, dated as of June 25, 1999, between the Company and Firstar Bank, National Association, as Trustee which is hereby incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC on August 20, 1999.

EXHIBIT 4.2	-	Fiftieth Supplemental Indenture, dated as of August 27, 2024 between the Company and U.S. Bank National Association (formerly known as Firstar Bank, National Association), as Trustee which is hereby incorporated by reference to Exhibit 4.3.1 of the Company’s Current Report on Form 8-K filed with the SEC on August 27, 2024.

EXHIBIT 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.

EXHIBIT 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.

EXHIBIT 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.

EXHIBIT 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.

EXHIBIT 31.1*	-	Rule 13a—14(a) / 15d—14(a) Certifications — Principal Executive Officer.

EXHIBIT 31.2*	-	Rule 13a—14(a) / 15d—14(a) Certifications — Principal Financial Officer.

EXHIBIT 32.1*	-	Section 1350 Certifications.

EXHIBIT 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.

3833

EXHIBIT 101.SCH*	-	XBRL Taxonomy Extension Schema Document.

EXHIBIT 101.CAL*	-	XBRL Taxonomy Extension Calculation Linkbase Document.

EXHIBIT 101.DEF*	-	XBRL Taxonomy Extension Definition Linkbase Document.

EXHIBIT 101.LAB*	-	XBRL Taxonomy Extension Label Linkbase Document.

EXHIBIT 101.PRE*	-	XBRL Taxonomy Extension Presentation Linkbase Document.

EXHIBIT 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.

*Filed herewith

3934

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	THE KROGER CO.

Dated: December 13, 2024	By:	/s/ W. Rodney McMullen
Dated: June 27, 2025	By:	/s/ Ronald L. Sargent
		WRonald L. ~~Rodney McMullen~~Sargent
		Chairman of the Board and Interim Chief Executive Officer

Dated: December 13, 2024	By:	/s/ Todd A. Foley
Dated: June 27, 2025	By:	/s/ David J. C. Kennerley
		~~Todd~~David AJ. ~~Foley~~C. Kennerley
		~~Senior~~Executive Vice President and ~~Interim~~ Chief Financial Officer

4035

Filing Compare · KROGER CO