The Kroger Co (KR)'s Winning Formula: Financial Metrics and Competitive Strengths - Stockxpo - Grow more with Investors, Traders, Analyst and Research

The Kroger Co (KR)’s Winning Formula: Financial Metrics and Competitive Strengths

The Kroger Co (KR, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $44.75, The Kroger Co has witnessed a daily gain of 0.73%, marked against a three-month change of -7.31%. A thorough analysis, underlined by the GF Score, suggests that The Kroger Co is well-positioned for substantial growth in the near future.


What Is the GF Score?

The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.

Here are the key components of The Kroger Co’s GF Score:

Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high profitability rank and a strong growth rank, GuruFocus assigned The Kroger Co the GF Score of 93 out of 100, which signals the highest outperformance potential.

Understanding The Kroger Co Business

The Kroger Co, with a market cap of $32.19 billion, is the leading American grocer, operating 2,719 supermarkets under several banners throughout the country. Around 83% of stores have pharmacies, while nearly 60% also sell fuel. The company also operates roughly 120 fine jewelry stores. Kroger features a leading private-label offering and manufactures around 30% of its own-brand units (and more than 40% of its grocery own-label assortment) itself in 33 food production plants nationwide. Kroger is a top-two grocer in most of its major markets. Virtually all of Kroger’s sales come from the United States. Kroger has offered to acquire no-moat Albertsons in a $25 billion deal; if the transaction is approved by regulators, it should close in 2024.


Financial Strength Breakdown

According to the Financial Strength rating, The Kroger Co’s robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for The Kroger Co stands impressively at 5.56, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With a favorable Debt-to-Revenue ratio of 0.13, The Kroger Co’s strategic handling of debt solidifies its financial health.

Profitability Rank Breakdown

The Profitability Rank shows The Kroger Co’s impressive standing among its peers in generating profit. The Kroger Co Operating Margin has increased (31.35%) over the past five years, as shown by the following data: 2019: 2.15; 2020: 1.84; 2021: 2.10; 2022: 2.52; 2023: 2.78. The Piotroski F-Score confirms The Kroger Co’s solid financial situation based on Joseph Piotroski’s nine-point scale, which measures a company’s profitability, funding and operating efficiency. The Kroger Co’s strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.

Growth Rank Breakdown

Ranked highly in Growth, The Kroger Co demonstrates a strong commitment to expanding its business. The company’s 3-Year Revenue Growth Rate is 10.3%, which outperforms better than 68.62% of 290 companies in the Retail – Defensive industry. Moreover, The Kroger Co has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 9.8, and the rate over the past five years is 9.9. This trend accentuates the company’s continued capability to drive growth.



Given The Kroger Co’s financial strength, profitability, and growth metrics, the GF Score highlights the firm’s unparalleled position for potential outperformance. This analysis suggests that The Kroger Co is a promising investment opportunity, poised for substantial growth in the near future. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

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