Cover and table of contents

​

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 August 15, 2026

OR

​

☐	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

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​

​

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 ☐

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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.

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​	​	​	​	​
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 ☒.

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There were 590,588,700 shares of Common Stock ($1 par value) outstanding as of September 15, 2026.

​

​

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PART I – FINANCIAL INFORMATION

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Item 1.	Financial Statements.

​

THE KROGER CO.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Second Quarter Ended					​	Two Quarters Ended					​
​	​	August 15,		​	August 16,		​	August 15,		​	August 16,		​
(In millions, except per share amounts)	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​	2026		​ ​ ​	2025
Sales	​	$	34,621	​	$	33,940	​	$	80,742	​	$	79,058	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Operating expenses	​	​	​	​	​	​	​	​	​	​	​	​	​
Merchandise costs, including advertising, warehousing, and transportation, excluding items shown separately below	​		26,763	​		26,130	​		62,256	​		60,681	​
Operating, general and administrative	​		5,952	​		5,967	​		13,915	​		13,890	​
Rent	​		198	​		202	​		467	​		473	​
Depreciation and amortization	​		737	​		778	​		1,726	​		1,829	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Operating profit	​		971	​		863	​		2,378	​		2,185	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Other income (expense)	​	​	​	​	​	​	​	​	​	​	​	​	​
Net interest expense	​	​	(156)	​	​	(144)	​	​	(365)	​	​	(343)	​
Non-service component of company-sponsored pension plan expense	​	​	(9)	​	​	(3)	​	​	(16)	​	​	(4)	​
Gain on investments	​	​	34	​	​	56	​	​	20	​	​	37	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net earnings before income tax expense	​		840	​		772	​		2,017	​		1,875	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Income tax expense	​		198	​		162	​		471	​		397	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net earnings including noncontrolling interests	​		642	​		610	​		1,546	​		1,478	​
Net income attributable to noncontrolling interests	​		1	​		1	​		3	​		3	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net earnings attributable to The Kroger Co.	​	$	641	​	$	609	​	$	1,543	​	$	1,475	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net earnings attributable to The Kroger Co. per basic common share	​	$	1.05	​	$	0.91	​	$	2.52	​	$	2.22	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Average number of common shares used in basic calculation	​		606	​		662	​		610	​		661	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net earnings attributable to The Kroger Co. per diluted common share	​	$	1.05	​	$	0.91	​	$	2.51	​	$	2.20	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Average number of common shares used in diluted calculation	​		608	​		665	​		612	​		664	​

​

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

​

​

THE KROGER CO.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​ ​ ​	Second Quarter Ended					​	Two Quarters Ended					​
​	​	August 15,		​	August 16,		​	August 15,		​	August 16,		​
(In millions)	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​	2026		​ ​ ​	2025
Net earnings including noncontrolling interests	​	$	642	​	$	610	​	$	1,546	​	$	1,478	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Other comprehensive income (loss)	​	​	​	​	​	​	​	​	​	​	​	​	​
Change in pension and other postretirement defined benefit plans, net of income tax(1)	​	​	4	​	​	2	​	​	7	​	​	1	​
Unrealized gains and losses on cash flow hedging activities, net of income tax(2)	​		1	​		(1)	​		7	​		—	​
Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax(3)	​	​	1	​	​	3	​	​	3	​	​	5	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total other comprehensive income	​		6	​		4	​		17	​	​	6	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Comprehensive income	​		648	​		614	​		1,563	​		1,484	​
Comprehensive income attributable to noncontrolling interests	​		1	​		1	​		3	​		3	​
Comprehensive income attributable to The Kroger Co.	​	$	647	​	$	613	​	$	1,560	​	$	1,481	​

(1)	Amount is net of tax of $1 for the second quarter of 2026. Amount is net of tax of $2 for the first two quarters of 2026.

(2)	Amount is net of tax of $2 for the first two quarters of 2026. Amount is net of tax of $(1) for the second quarter of 2025.

(3)	Amount is net of tax of $2 for the second quarter of 2026. Amount is net of tax of $3 for the first two quarters of 2026 and $1 for the first two quarters of 2025.

​

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

​

​

​

THE KROGER CO.

CONSOLIDATED BALANCE SHEETS

(unaudited)

​

​	​	​	​	​	​	​	​
​	​ ​ ​	August 15,		​ ​ ​	January 31,
(In millions, except par amounts)	​	2026		​	2026
ASSETS	​	​	​	​	​	​	​
Current assets	​	​	​	​	​	​	​
Cash and temporary cash investments	​	$	1,676	​	$	3,334	​
Store deposits in-transit	​		1,060	​		1,244	​
Receivables	​		2,187	​		2,192	​
FIFO inventory	​		9,926	​		9,445	​
LIFO reserve	​		(2,644)	​		(2,553)	​
Prepaid and other current assets	​	​	721	​	​	843	​
Total current assets	​		12,926	​		14,505	​
​	​	​	​	​	​	​	​
Property, plant and equipment, net	​		25,265	​		24,260	​
Operating lease assets	​	​	6,753	​	​	6,682	​
Intangibles, net	​		848	​		808	​
Goodwill	​		2,624	​		2,595	​
Other assets	​		1,075	​		1,103	​
​	​	​	​	​	​	​	​
Total Assets	​	$	49,491	​	$	49,953	​
​	​	​	​	​	​	​	​
LIABILITIES	​	​	​	​	​	​	​
Current liabilities	​	​	​	​	​	​	​
Current portion of long-term debt including obligations under finance leases	​	$	1,838	​	$	1,802	​
Current portion of operating lease liabilities	​	​	664	​	​	665	​
Accounts payable	​		10,775	​		10,488	​
Accrued salaries and wages	​		1,206	​		1,267	​
Other current liabilities	​		3,935	​		3,886	​
Total current liabilities	​		18,418	​		18,108	​
​	​	​	​	​	​	​	​
Long-term debt including obligations under finance leases	​	​	15,159	​	​	15,764	​
Noncurrent operating lease liabilities	​	​	6,497	​	​	6,461	​
Deferred income taxes	​		1,184	​		1,094	​
Pension and postretirement benefit obligations	​		409	​		421	​
Other long-term liabilities	​		1,978	​		2,169	​
​	​	​	​	​	​	​	​
Total Liabilities	​		43,645	​		44,017	​
​	​	​	​	​	​	​	​
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 2026 and 2025	​		1,918	​		1,918	​
Additional paid-in capital	​		3,975	​		3,907	​
Accumulated other comprehensive loss	​		(618)	​		(635)	​
Accumulated earnings	​		29,947	​		28,850	​
Common shares in treasury, at cost, 1,322 shares in 2026 and 1,303 shares in 2025	​		(29,382)	​		(28,113)	​
​	​	​	​	​	​	​	​
Total Shareowners’ Equity - The Kroger Co.	​		5,840	​		5,927	​
Noncontrolling interests	​		6	​		9	​
​	​	​	​	​	​	​	​
Total Equity	​		5,846	​		5,936	​
​	​	​	​	​	​	​	​
Total Liabilities and Equity	​	$	49,491	​	$	49,953	​

​

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

​

​

THE KROGER CO.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

​

​	​	​	​	​	​	​	​
​	​	Two Quarters Ended					​
​	​	August 15,		​	August 16,		​
(In millions)	​ ​ ​	2026		​ ​ ​	2025
Cash Flows from Operating Activities:	​	​	​	​	​	​	​
Net earnings including noncontrolling interests	​	$	1,546	​	$	1,478	​
Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:	​	​	​	​	​	​	​
Depreciation and amortization	​		1,726	​		1,829	​
Asset impairment and store closure charges	​	​	66	​	​	114	​
Operating lease asset amortization	​	​	314	​	​	318	​
LIFO charge	​		91	​		102	​
Share-based employee compensation	​		101	​		83	​
Deferred income taxes	​		94	​		(31)	​
Gain on sale of assets	​	​	(26)	​	​	(6)	​
Gain on investments	​	​	(20)	​	​	(37)	​
Other	​		15	​		(29)	​
Changes in operating assets and liabilities:	​	​	​	​	​	​	​
Store deposits in-transit	​		185	​		179	​
Receivables	​		(162)	​		(12)	​
Inventories	​		(460)	​		92	​
Prepaid and other current assets	​		(85)	​		(91)	​
Accounts payable	​		(4)	​		(14)	​
Accrued expenses	​		38	​		181	​
Income taxes receivable and payable	​		219	​	​	6	​
Operating lease liabilities	​	​	(367)	​	​	(291)	​
Other	​		(186)	​		(183)	​
​	​	​	​	​	​	​	​
Net cash provided by operating activities	​		3,085	​		3,688	​
​	​	​	​	​	​	​	​
Cash Flows from Investing Activities:	​	​	​	​	​	​	​
Payments for property and equipment, including payments for lease buyouts	​		(2,437)	​		(1,968)	​
Other	​		42	​		(139)	​
​	​	​	​	​	​	​	​
Net cash used by investing activities	​		(2,395)	​		(2,107)	​
​	​	​	​	​	​	​	​
Cash Flows from Financing Activities:	​	​	​	​	​	​	​
Payments on long-term debt including obligations under finance leases	​		(604)	​	​	(122)	​
Dividends paid	​	​	(431)	​	​	(422)	​
Proceeds from issuance of capital stock	​	​	36	​		163	​
Treasury stock purchases	​		(1,271)	​		(203)	​
Other	​	​	(78)	​		(73)	​
​	​	​	​	​	​	​	​
Net cash used by financing activities	​		(2,348)	​		(657)	​
​	​	​	​	​	​	​	​
Net (decrease) increase in cash and temporary cash investments	​		(1,658)	​		924	​
​	​	​	​	​	​	​	​
Cash and temporary cash investments:	​	​	​	​	​	​	​
Beginning of year	​		3,334	​		3,959	​
End of period	​	$	1,676	​	$	4,883	​
​	​	​	​	​	​	​	​
Reconciliation of capital investments:	​	​	​	​	​	​	​
Payments for property and equipment, including payments for lease buyouts	​	$	(2,437)	​	$	(1,968)	​
Payments for lease buyouts	​	​	37	​		11	​
Changes in construction-in-progress payables	​		(251)	​		(73)	​
Total capital investments, excluding lease buyouts	​	$	(2,651)	​	$	(2,030)	​
​	​	​	​	​	​	​	​
Disclosure of cash flow information:	​	​	​	​	​	​	​
Cash paid during the year for net interest	​	$	372	​	$	370	​
Cash paid during the year for income taxes	​	$	159	​	$	415	​

​

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 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		—	​		—	​		—		(4)	​		145	​		—	​		—	​		—	​		145
Restricted stock issued		—	​		—	​		(65)		(1)	​		32	​		—	​		—	​		—	​		(33)
Treasury stock activity:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Stock options exchanged		—	​		—	​		—		4	​		(181)	​		—	​		—	​		—	​		(181)
Share-based employee compensation		—	​		—	​		38		—	​		—	​		—	​		—	​		—	​		38
Other comprehensive income net of tax of $2		—	​		—	​		—		—	​		—	​		2	​		—	​		—	​		2
Other		—	​		—	​		99		—	​		(99)	​		—	​		2	​		(3)	​		(1)
Cash dividends declared ($0.32 per common share)		—	​		—	​		—		—	​		—	​		—	​		(211)	​		—	​		(211)
Net earnings including noncontrolling interests		—	​		—	​		—		—	​		—	​		—	​		866	​		2	​		868
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
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		—	​		—	​		—		(1)	​		18	​		—	​		—	​		—	​		18
Restricted stock issued		—	​		—	​		(103)		(1)	​		54	​		—	​		—	​		—	​		(49)
Treasury stock activity:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Stock options exchanged		—	​		—	​		—		—	​		(22)	​		—	​		—	​		—	​		(22)
Share-based employee compensation		—	​		—	​		45		—	​		—	​		—	​		—	​		—	​		45
Other comprehensive income net of tax of $(1)		—	​		—	​		—		—	​		—	​		4	​		—	​		—	​		4
Other		—	​		—	​		73		—	​		(73)	​		—	​		(2)	​		(1)	​		(3)
Cash dividends declared ($0.35 per common share)		—	​		—	​		—		—	​		—	​		—	​		(234)	​		—	​		(234)
Net earnings including noncontrolling interests		—	​		—	​		—		—	​		—	​		—	​		609	​		1	​		610
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balances at August 16, 2025		1,918		$	1,918		$	3,174		1,255		$	(24,949)		$	(615)		$	29,754		$	(5)		$	9,277
Issuance of common stock:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Stock options exercised		—	​		—	​		—		(1)	​		17	​		—	​		—	​		—	​		17
Restricted stock issued		—	​		—	​		(3)		—	​		4	​		—	​		—	​		—	​		1
Treasury stock activity:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Treasury stock purchases, at cost		—	​		—	​		655		21	​		(1,381)	​		—	​		—	​		—	​		(726)
Stock options exchanged		—	​		—	​		—		1	​		(22)	​		—	​		—	​		—	​		(22)
Share-based employee compensation		—	​		—	​		37		—	​		—	​		—	​		—	​		—	​		37
Other comprehensive income net of income tax of $1		—	​		—	​		—		—	​		—	​		2	​		—	​		—	​		2
Other		—	​		—	​		8		—	​		(8)	​		—	​		—	​		(3)	​		(3)
Cash dividends declared ($0.35 per common share)		—	​		—	​		—		—	​		—	​		—	​		(229)	​		—	​		(229)
Net earnings (loss) including noncontrolling interests		—	​		—	​		—		—	​		—	​		—	​		(1,320)	​		5	​		(1,315)
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balances at November 8, 2025		1,918		$	1,918		$	3,871		1,276		$	(26,339)		$	(613)		$	28,205		$	(3)		$	7,039
Issuance of common stock:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Stock options exercised		—	​		—	​		—		1	​		2	​		—	​		—	​		—	​		2
Restricted stock issued		—	​		—	​		(1)		—	​		—	​		—	​		—	​		—	​		(1)
Treasury stock activity:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Treasury stock purchases, at cost		—	​		—	​		—		27	​		(1,773)	​		—	​		—	​		—	​		(1,773)
Stock options exchanged		—	​		—	​		—		(1)	​		(3)	​		—	​		—	​		—	​		(3)
Share-based employee compensation		—	​		—	​		37		—	​		—	​		—	​		—	​		—	​		37
Other comprehensive income net of income tax of $(7)		—	​		—	​		—		—	​		—	​		(22)	​		—	​		—	​		(22)
Other		—	​		—	​		—		—	​		—	​		—	​		—	​		12	​		12
Cash dividends declared ($0.35 per common share)		—	​		—	​		—		—	​		—	​		—	​		(216)	​		—	​		(216)
Net earnings including noncontrolling interests		—	​		—	​		—		—	​		—	​		—	​		861	​		—	​		861
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balances at January 31, 2026		1,918		$	1,918		$	3,907		1,303		$	(28,113)		$	(635)		$	28,850		$	9		$	5,936

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 31, 2026	​	1,918	​	$	1,918	​	$	3,907		1,303	​	$	(28,113)	​	$	(635)	​	$	28,850	​	$	9	​	$	5,936
Issuance of common stock:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Stock options exercised		—	​		—	​		—		(1)	​		30	​		—	​		—	​		—	​		30
Restricted stock issued		—	​		—	​		(53)		(1)	​		25	​		—	​		—	​		—	​		(28)
Treasury stock activity:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Treasury stock purchases, at cost		—	​		—	​		—		3	​		(198)	​		—	​		—	​		—	​		(198)
Stock options exchanged		—	​		—	​		—		1	​		(15)	​		—	​		—	​		—	​		(15)
Share-based employee compensation		—	​		—	​		57		—	​		—	​		—	​		—	​		—	​		57
Other comprehensive income net of tax of $4		—	​		—	​		—		—	​		—	​		11	​		—	​		—	​		11
Other		—	​		—	​		49		—	​		(49)	​		—	​		—	​		(4)	​		(4)
Cash dividends declared ($0.35 per common share)		—	​		—	​		—		—	​		—	​		—	​		(215)	​		—	​		(215)
Net earnings including noncontrolling interests		—	​		—	​		—		—	​		—	​		—	​		903	​		1	​		904
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balances at May 23, 2026		1,918		$	1,918		$	3,960		1,305		$	(28,320)		$	(624)		$	29,538		$	6		$	6,478
Issuance of common stock:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Stock options exercised		—	​		—	​		—		—	​		6	​		—	​		—	​		—	​		6
Restricted stock issued		—	​		—	​		(96)		(2)	​		68	​		—	​		—	​		—	​		(28)
Treasury stock activity:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Treasury stock purchases, at cost		—	​		—	​		—		18	​		(1,039)	​		—	​		—	​		—	​		(1,039)
Stock options exchanged		—	​		—	​		—		1	​		(30)	​		—	​		—	​		—	​		(30)
Share-based employee compensation		—	​		—	​		44		—	​		—	​		—	​		—	​		—	​		44
Other comprehensive income net of tax of $3		—	​		—	​		—		—	​		—	​		6	​		—	​		—	​		6
Other		—	​		—	​		67		—	​		(67)	​		—	​		1	​		(1)	​		—
Cash dividends declared ($0.39 per common share)		—	​		—	​		—		—	​		—	​		—	​		(233)	​		—	​		(233)
Net earnings including noncontrolling interests		—	​		—	​		—		—	​		—	​		—	​		641	​		1	​		642
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balances at August 15, 2026		1,918		$	1,918		$	3,975		1,322		$	(29,382)		$	(618)		$	29,947		$	6		$	5,846

​

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 January 31, 2026 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 January 31, 2026.

​

The unaudited information in the Consolidated Financial Statements for the second quarters ended August 15, 2026 and August 16, 2025 includes the results of operations of the Company for the 12 and 28-week periods then ended.

​

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; or

​

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, 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.

​

The fair value of certain financial instruments, measured using Level 1 inputs, was $162 and $142 as of August 15, 2026 and January 31, 2026, respectively, and is included in “Other assets” in the Company’s Consolidated Balance Sheets. An unrealized gain for these Level 1 investments of approximately $20 and $37 for the first two quarters of 2026 and 2025, respectively, is included in “Gain on investments” in the Company’s Consolidated Statements of Operations. An unrealized gain for these Level 1 investments of approximately $34 and $56 for the second quarters of 2026 and 2025, respectively, is included in “Gain on investments” in the Company’s Consolidated Statements of Operations.

​

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

​

​

2.	DEBT OBLIGATIONS

​

Long-term debt consists of:

​

​	​	​	​	​	​	​
​	​	August 15,		​	January 31,
​	​ ​ ​	2026		​ ​ ​	2026
1.70% to 8.00% Senior Notes due through 2064	​	$	14,370	​	$	14,864
Other	​		997	​		1,011
​	​	​	​	​	​	​
Total debt, excluding obligations under finance leases	​		15,367	​		15,875
Less current portion	​		(1,452)	​		(1,366)
​	​	​	​	​	​	​
Total long-term debt, excluding obligations under finance leases	​	$	13,915	​	$	14,509

​

The fair value of the Company’s long-term debt, including current maturities, was estimated based on Level 2 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 August 15, 2026 and January 31, 2026. At August 15, 2026, the fair value of total debt was $13,900 compared to a carrying value of $15,367. At January 31, 2026, the fair value of total debt was $14,975 compared to a carrying value of $15,875.

​

In the first two quarters of 2026, the Company repaid $500 of senior notes bearing an interest rate of 3.5% using cash on hand.

​

As of August 15, 2026 and January 31, 2026, Other debt consisted primarily of a financial obligation related to a sale transaction for properties that did not qualify for sale-leaseback accounting treatment in 2021.

​

3.	BENEFIT PLANS

​

The following table provides the components of net periodic benefit cost for the company-sponsored defined benefit pension plans and other postretirement benefit plans for the second quarters of 2026 and 2025:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Second Quarter Ended
​	​	Pension Benefits					​	Other Benefits
​	​	August 15,		​	August 16,		​	August 15,		​	August 16,
​	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​	2026		​ ​ ​	2025
Components of net periodic benefit cost:	​	​	​	​	​	​	​	​	​	​	​	​	​
Service cost		$	1		$	2		$	1		$	1	​
Interest cost	​		30	​		31	​		3	​		2	​
Expected return on plan assets	​		(29)	​		(32)	​		—	​		—	​
Amortization of:	​	​	​	​	​	​	​	​	​	​	​	​	​
Prior service cost	​		—	​		—	​		(1)	​		(1)	​
Actuarial loss	​		5	​		3	​		1	​		—	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net periodic benefit cost		$	7		$	4		$	4		$	2	​

​

​

The following table provides the components of net periodic benefit cost for the company-sponsored defined benefit pension plans and other post-retirement benefit plans for the first two quarters of 2026 and 2025:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Two Quarters Ended
​	​	Pension Benefits					​	Other Benefits
​	​	August 15,		​	August 16,		​	August 15,		​	August 16,
​	​ ​ ​	2026		​ ​ ​	2025		​ ​ ​	2026		​ ​ ​	2025
Components of net periodic benefit cost (benefit):	​	​	​	​	​	​	​	​	​	​	​	​	​
Service cost		$	3		$	4		$	3		$	2	​
Interest cost	​		69	​		71	​		6	​		6	​
Expected return on plan assets	​		(68)	​		(74)	​		—	​		—	​
Amortization of:	​	​	​	​	​	0	​	​	​	​	​	0	​
Prior service cost	​		—	​		—	​		(2)	​		(2)	​
Actuarial loss (gain)	​		11	​		7	​		—	​		(4)	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net periodic benefit cost		$	15		$	8		$	7		$	2	​

​

The Company is not required to make any significant contributions to its company-sponsored pension plans in 2026 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 two quarters of 2026 or 2025.

​

The Company contributed $178 and $175 to employee 401(k) retirement savings accounts in the first two quarters of 2026 and 2025, 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:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Second Quarter Ended							​	Second Quarter Ended							​
​	​	August 15, 2026							​	August 16, 2025
​	​ ​ ​	​	​	​ ​ ​	​	​ ​ ​	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	​	$	636		606	​	$	1.05	​	$	604		662	​	$	0.91	​
Dilutive effect of stock options	​	​	​		2	​	​	​	​	​	​		3	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net earnings attributable to The Kroger Co. per diluted common share	​	$	636		608	​	$	1.05	​	$	604		665	​	$	0.91	​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Two Quarters Ended							​	Two Quarters Ended							​
​	​	August 15, 2026							​	August 16, 2025							​
​	​ ​ ​	​	​	​ ​ ​	​	​ ​ ​	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	​	$	1,533		610	​	$	2.52	​	$	1,464		661	​	$	2.22	​
Dilutive effect of stock options	​	​	​		2	​	​	​	​	​	​		3	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net earnings attributable to The Kroger Co. per diluted common share	​	$	1,533		612	​	$	2.51	​	$	1,464		664	​	$	2.20	​

​

The Company had combined undistributed and distributed earnings to participating securities totaling $5 in both the second quarters of 2026 and 2025. For the first two quarters of 2026 and 2025, the Company had combined undistributed and distributed earnings to participating securities of $10 and $11, respectively.

​

The Company had options outstanding for approximately 4 million and 1 million shares during the second quarters of 2026 and 2025, respectively, 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 and 1 million shares during the first two quarters of 2026 and 2025, respectively, 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.

​

​

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 reinsured with unrelated insurance companies for losses exceeding specified retention levels. 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 December 30, 2024, the Company finalized a settlement with plaintiffs to settle the majority of opioid claims that have been or could be brought against Kroger by states and subdivisions in which it operates. On September 26, 2025, the Company finalized a separate opioid settlement with plaintiffs to settle all of the opioid claims that have been or could be brought against Kroger by Native American tribes.

​

As part of these settlement agreements, the Company agreed to pay up to $1,200 to states and subdivisions and $36 to Native American tribes in funding for abatement efforts over 11 years, and approximately $177 to cover attorneys’ fees and costs over 6 years. The exact payment amounts to the states and subdivisions 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 settlements provide for the full resolution of all claims on behalf of participating states, subdivisions and Native American tribes and are not an admission of any wrongdoing or liability. Certain opioid-related cases against the Company remain pending in the multidistrict litigation and in various state courts, including those brought by non-participating states and subdivisions and private parties such as hospitals and third-party payors. The Company continues to defend these cases.

​

​

As of August 15, 2026, the Company recorded $133 and $845 of the estimated settlement liability in “Other current liabilities” and “Other long-term liabilities,” respectively, in the Company’s Consolidated Balance Sheets related to these opioid settlements. As of January 31, 2026, the Company recorded $132 and $981 of the estimated settlement liability in “Other current liabilities” and “Other long-term liabilities,” respectively, in the Company’s Consolidated Balance Sheets related to these opioid settlements.

​

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.

​

Termination of the Merger with Albertsons Companies, Inc.

​

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 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.

​

On December 10, 2024, Albertsons sued the Company in the Delaware Court of Chancery for alleged breaches of the Merger Agreement and the implied covenant of good faith and fair dealing. Albertsons seeks payment of a $600 termination fee that Albertsons alleges it is owed under the Merger Agreement, as well as additional damages, including expenses paid by Albertsons in connection with the Merger and the lost premium Albertsons alleges is owed to its shareholders, as well as other relief.

​

On 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.

​

On 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. Trial is scheduled to begin in the case on October 19, 2026.

​

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.

​

​

6.	ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

​

The following table represents the changes in AOCI by component for the first two quarters of 2026 and 2025:

​

​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	Pension and		​	​	​
​	​	Cash Flow		​	Postretirement		​	​	​
​	​	Hedging		​	Defined Benefit		​	​	​
​	​ ​ ​	Activities(1)		​ ​ ​	Plans(1)		​ ​ ​	Total(1)
Balance at February 1, 2025	​	$	(35)	​	$	(586)	​	$	(621)	​
Amounts reclassified out of AOCI(2)	​	​	5	​		1	​		6	​
Net current-period OCI	​	​	5	​		1	​		6	​
Balance at August 16, 2025	​	$	(30)	​	$	(585)	​	$	(615)	​
​	​	​	​	​	​	​	​	​	​	​
Balance at January 31, 2026	​	$	(24)	​	$	(611)	​	$	(635)	​
OCI before reclassifications(3)	​		7	​		—	​		7	​
Amounts reclassified out of AOCI(2)	​		3	​	​	7	​		10	​
Net current-period OCI	​		10	​		7	​		17	​
Balance at August 15, 2026	​	$	(14)	​	$	(604)	​	$	(618)	​

(1)	All amounts are net of tax.

(2)	Net of tax of $1 for cash flow hedging activities for the first two quarters of 2025. Net of tax of $3 for cash flow hedging activities and $2 for pension and postretirement defined benefit plans for the first two quarters of 2026.

(3)	Net of tax of $2 for cash flow hedging activities for the first two quarters of 2026.

​

The following table represents the items reclassified out of AOCI and the related tax effects for the second quarters and first two quarters of 2026 and 2025:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Second Quarter Ended					​	Two Quarters Ended
​	​ ​ ​	August 15,		​ ​ ​	August 16,		​ ​ ​	August 15,		​ ​ ​	August 16,
​	​	2026		​	2025		​	2026		​	2025		​
Cash flow hedging activity items:	​	​	​	​	​	​	​	​	​	​	​	​	​
Amortization of gains and losses on cash flow hedging activities(1)	​	$	3	​	$	3	​	$	6	​	$	6	​
Tax expense	​		(2)	​		—	​		(3)	​		(1)	​
Net of tax	​		1	​		3	​		3	​		5	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pension and postretirement defined benefit plan items:	​	​	​	​	​	​	​	​	​	​	​	​	​
Amortization of amounts included in net periodic pension cost(2)	​		5	​		2			9			1	​
Tax expense			(1)			—			(2)			—	​
Net of tax			4			2			7			1	​
Total reclassifications, net of tax		$	5		$	5		$	10		$	6	​

(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).

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7.	SEGMENT REPORTING

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

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

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The following table presents the Company’s retail operations segment revenue, measure of segment profit or loss, significant segment expenses and reconciliation of retail operations segment FIFO EBITDA to consolidated net earnings before income tax expense and retail operations segment sales to consolidated sales for the second quarter and first two quarters of 2026 and 2025:

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​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Second Quarter Ended					​	Two Quarters Ended
​	​	​	August 15,	​	​	August 16,	​	​	August 15,	​	​	August 16,
​	​ ​ ​	​	2026	​ ​ ​	​	2025(1)	​ ​ ​	​	2026	​	​	2025(1)
Retail operations segment sales	​	$	34,621	​	$	33,940	​	$	80,742	​	$	79,058
Retail operations segment expenses:	​	​	​	​	​	​	​	​	​	​	​	​
Merchandise costs, including advertising, warehousing, and transportation, excluding the LIFO charge	​	​	26,724	​	​	26,068	​	​	62,165	​	​	60,579
Operating, general, and administrative	​	​	5,952	​	​	5,967	​	​	13,915	​	​	13,890
Rent	​	​	198	​	​	202	​	​	467	​	​	473
Retail operations segment FIFO EBITDA	​	$	1,747	​	$	1,703	​	$	4,195	​	$	4,116
​	​	​	​	​	​	​	​	​	​	​	​	​
Reconciliation of net earnings before income tax expense:	​	​	​	​	​	​	​	​	​	​	​	​
Retail operations segment FIFO EBITDA	​	$	1,747	​	$	1,703	​	$	4,195	​	$	4,116
Depreciation and amortization	​	​	(737)	​	​	(778)	​	​	(1,726)	​	​	(1,829)
LIFO charge	​	​	(39)	​	​	(62)	​	​	(91)	​	​	(102)
Net interest expense	​	​	(156)	​	​	(144)	​	​	(365)	​	​	(343)
Non-service component of company-sponsored pension plan expense	​	​	(9)	​	​	(3)	​	​	(16)	​	​	(4)
Gain on investments	​	​	34	​	​	56	​	​	20	​	​	37
Consolidated net earnings before income tax expense	​	$	840	​	$	772	​	$	2,017	​	$	1,875

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(1)	The presentation of segment revenues and significant segment expenses for the second quarter and first two quarters ended August 16, 2025 has been recast to conform to the current year presentation and reflects operating segment information reviewed by the Company's current CODM.

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8.	INCOME TAXES

The effective income tax rate was 23.6% for the second quarter of 2026 and 21.0% for the second quarter of 2025. The effective income tax rate was 23.4% for the first two quarters of 2026 and 21.2% for the first two quarters of 2025. The effective income tax rate for the second quarter of 2026 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 two quarters of 2026 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 second quarter of 2025 equaled the federal statutory rate due to the effect of state income taxes being fully offset by the utilization of tax credits and deductions including the benefit from share-based payments. The effective income tax rate for the first two quarters 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.

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9**.**	RECENTLY ISSUED ACCOUNTING STANDARDS

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

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

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10.	PROPOSED ACQUISITION OF GIANT EAGLE, INC.

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On July 1, 2026, the Company announced it had entered into an agreement and plan of merger pursuant to which it will acquire Giant Eagle, Inc. (“Giant Eagle”). The transaction is valued at approximately $1,650, subject to customary purchase price adjustments, and consists of $1,250 in cash to be paid and approximately $400 in assumed indebtedness. In connection with obtaining the requisite regulatory clearance necessary to consummate the transaction, the Company and Giant Eagle expect to make limited Giant Eagle store divestitures. The transaction is expected to close in fiscal year 2027, subject to the expiration or termination of any applicable waiting period, and any extensions thereof, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the satisfaction or waiver of other customary closing conditions.

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