Kroger's New CEO Bets on Five Fs as eCommerce Turns Profitable

Greg Foran's cost-led value plan and a long-awaited eCommerce inflection — but the tape is still voting no.

KR · Earnings Call · 2026-06-18

A New Playbook in the First 100 Days

When Greg Foran took the microphone for his first earnings call as Kroger's CEO, he wasted no time in rewriting the narrative. After a 100-day listening tour across stores, manufacturing plants and distribution centers, Foran delivered a blunt self-assessment: operating costs have been growing faster than sales, execution across the fleet is inconsistent, and the company has not opened enough stores. The remedy is a self-funded strategy he calls the "five Fs" — Fresh, Fast, Personalized, Friendly, and Affordable. The key line, which will define the next few quarters, is his insistence that cost reduction is not a choice. “Taking costs out of this business is not optional. It's the starting point for everything else we want to do.” — Greg Foran, Chief Executive Officer · 2026-06-18 That commitment to cost saves is the engine behind the affordability push. Foran and CFO David Kennerley repeatedly stressed that every dollar invested in customer value will be fully funded through savings in cost of goods sold, goods not for resale, and the broader operating model. The early results are encouraging: Q1 price tests are already being run, and the company delivered COGS savings 30% ahead of plan. Meanwhile, the topline is showing the first sign of a genuine share break. As Foran put it, “We're starting to pull away from the middle of the pack... our best performance against Circana's Rest of Market, a benchmark of traditional grocery competitors in over three years.” — Greg Foran, Chief Executive Officer · 2026-06-18 The company's own keyword history confirms the shift—Rest of Market jumped to the top of the list in the latest quarter, a theme that barely existed before.

eCommerce and Media: The Inflection That Matters

The most concrete achievement on the call was the long-promised profitability inflection in digital. Kroger's eCommerce business, including media, turned profitable this quarter—ahead of schedule—after years of heavy investment and the strategic closure of three automated fulfillment centers. The company now leans more heavily on store-based fulfillment and partnerships with DoorDash and Uber Eats, and the economics are improving.

Our eCommerce business, including media, became profitable this quarter ahead of schedule. We expect profitability to accelerate through the remainder of this year and continue improving beyond 2026 as we scale store-based fulfillment, expand media, and reduce our cost to serve.
David Kennerley, Chief Financial Officer · 2026-06-18

This is not just a cost story; it is also a data and advertising story. eCommerce profitability powers retail media, which delivered over 20% growth this quarter. With 95% of transactions tied to a loyalty card and over 20 years of purchase history, Kroger can offer brands what few others can: closed-loop measurement of actual shopping behavior. The new self-service tie-ups with Google's Display & Video 360 and TikTok are early steps into a much larger media flywheel. As David Kennerley noted, “Our eCommerce results are also creating momentum for our media business, which delivered over 20% growth this quarter.” — David Kennerley, Chief Financial Officer · 2026-06-18

Fundamentals and Market Skepticism

The financials back up the narrative, at least on the surface. Operating income rose 37% year-over-year to $1.2 billion, while total revenue grew just 1% to $34.7 billion. Net income jumped 36%, and adjusted EPS of $1.58 grew 6%. Yet the stock market has not embraced the turnaround: KR is down nearly 15% over the past 90 days and sits 23% below its March 2026 peak. Investors seem to want more proof before paying up, especially after a decade of share losses and a failed merger with Albertsons. Foran's predecessor, Ron Sargent, had already started the cost and price work, but the new CEO is insisting on speed and discipline. The prior calls make clear that value perception has been a recurring worry. In March, Foran admitted, “Look, Krisztina, it certainly is pretty early for me. I'm just into my fourth week here.” — Gregory Foran, Chief Executive Officer · 2026-03-05 David Kennerley also cautioned then that “not only is the price important and the value that they get is important, but also the value perception.” — David John Kennerley, Chief Financial Officer · 2026-03-05 Today, those themes are being operationalized through the five Fs and a much clearer capital allocation framework. The real test comes on October 20, when management promises to lay out multi-year targets for growth, cost savings, and eCommerce margins. Until then, the market's verdict is likely to remain cautious. But the direction is unmistakable: Kroger is no longer trying to be the lowest-price retailer; it is trying to be the most efficient, most personalized, and most profitable one—and it is finally pairing that ambition with a believable path to eCommerce profitability.