KRKroger
Is the business good?
The checks split: earnings fully cash-backed (4.9×), but margins compressing.
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Operating margin has narrowed over the past few years, profitability per dollar of sales is eroding.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is KR?
Kroger earns 6.2% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
Return on invested capital · cost of capital 9.0% · 2.8 points below what the capital costs: growth destroys value
- Operating margin
- 1.1%
Operating margin · Grocery Stores median 1.8% · 12 months to Q2 2026
- Cash conversion
- 4.94×
Cash conversion · 1.80× a year ago · operating cash flow covers the operating profit after tax
- Gross margin
- 23%
Gross margin
| Year | Operating margin |
|---|---|
| FY2020 | 2.1% |
| FY2021 | 2.5% |
| FY2022 | 2.8% |
| FY2023 | 2.1% |
| FY2024 | 2.6% |
| FY2025 | 1.3% |
Details›
- Gross margin12 months to Q2 2026
- 23%
- Operating margin12 months to Q2 2026
- 1.1%
- Net margin12 months to Q2 2026
- 0.58%
- Free cash flow margin
- 1.8%
- Revenue, trailing twelve months
- $137.1B
- Free cash flow, trailing twelve months
- $2.52B
- Net income, trailing twelve months
- $791M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 6.2%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Grocery Stores
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