Kroger posted a net loss of $48 million for the third quarter of 2025, reversing prior profitability despite a 1.7% year-over-year increase in same-store sales. The results reflect mounting cost pressures and operational challenges within the retail sector.
- Kroger reported a net loss of $48 million in Q3 2025
- Same-store sales grew 1.7% year-over-year
- Total revenue reached $34.9 billion
- Gross margin declined to 26.8%
- Operating expenses increased 4.5% YoY
- KR stock dropped 5.2% post-earnings; XRT fell 2.8%
Kroger (KR) reported a net loss of $48 million for the fiscal quarter ended November 2, 2025, marking a significant reversal from its positive earnings in the same period last year. The company recorded total revenue of $34.9 billion, up 1.7% compared to $34.3 billion in Q3 2024, driven by modest growth in same-store sales. However, rising operating expenses—including supply chain inefficiencies, higher labor costs, and ongoing investment in digital platforms—outpaced revenue gains. The loss underscores growing financial strain across the consumer staples sector, particularly among large grocery retailers facing inflationary headwinds and shifting consumer behavior. Gross margin contraction to 26.8%, down from 27.5% in the prior-year quarter, highlights the pressure on pricing power and input costs. Operating expenses rose 4.5% year-over-year, while capital expenditures remained elevated as Kroger continues to modernize stores and expand delivery capabilities. The results weighed heavily on investor sentiment, sending KR shares down 5.2% in after-hours trading. The SPDR S&P Retail ETF (XRT), which tracks major U.S. retailers, declined 2.8% following the earnings release, reflecting broader market concerns about retail profitability amid economic uncertainty. Analysts now question whether Kroger can maintain margins without raising prices further, potentially risking customer retention in a competitive landscape. Market participants are closely watching upcoming guidance from Kroger’s leadership team for signs of strategic adjustments, including potential store closures or restructuring initiatives. With inflationary pressures persisting and consumer spending showing signs of moderation, the outcome could influence sector-wide performance in the final months of 2025.