Kroger Trims Full-Year Sales Outlook as Analysts Cut Price Targets

Kroger lowered its full-year identical sales guidance alongside second-quarter fiscal 2026 results, now projecting identical sales excluding fuel of 0.2% to 0.8% versus its earlier 1% to 2% forecast. The grocer said roughly 140 basis points of the reduction reflects a drag from Inflation Reduction Act provisions that lowered what Medicare beneficiaries pay for prescription drugs, cutting into pharmacy revenue.

The quarter itself beat on profitability. Adjusted earnings came in at $1.09 a share against a $1.05 consensus, with total sales of $34.62 billion compared with $33.9 billion a year earlier. Kroger reaffirmed its full-year adjusted earnings range of $5.10 to $5.30 a share, pointing to cost savings and targeted price investments aimed at holding traffic as competition intensifies.

Sell-side reaction has been to mark down valuation rather than earnings power. Telsey Advisory lowered its target to $75 from $78, Evercore ISI moved to $70 from $75, and Roth Capital cut to $73 from $78. Goldman Sachs maintained a Buy rating while UBS stayed at Hold, leaving the debate centered on whether soft top-line growth eventually pressures the margin story.