KR

Kroger (KR) closed at $64.13, up 1.83%, outperforming the S&P 500. The company is expected to report EPS of $1.16 (up 10.48% YoY) and revenue of $34.57 billion (up 2.1% YoY). With a Forward P/E of 12.13 below industry average and a Zacks Rank of #3 (Hold), Kroger trades at a discount but faces headwinds from a weak Retail-Supermarkets industry ranked in the bottom 7%.

Kroger stock closed at $62.56, up 1.49% and outperforming the broader market decline. The company is expected to report EPS of $1.16 (up 10.48% YoY) and revenue of $34.57 billion (up 2.1% YoY).

With a Forward P/E of 11.87 below the industry average of 13.69, Kroger trades at a discount. However, the stock holds a Zacks Rank of #3 (Hold) with a slight 0.29% downward EPS revision in the past 30 days.

RSPS, an equal-weight consumer staples ETF launched in 2006, has gained 8.93% year-to-date with a 0.40% expense ratio. The fund holds 36 consumer staples stocks with top holdings including Kroger, Costco, and Philip Morris. While it offers diversified exposure, cheaper alternatives like VDC (0.09% expense ratio) and XLP (0.08% expense ratio) may be more attractive for cost-conscious investors.

Greg Abel, Berkshire Hathaway's new CEO, oversees a $350 billion+ stock portfolio that includes three consumer stocks comprising 12.5% of holdings: Coca-Cola, Kraft Heinz, and Kroger. The article recommends Coca-Cola as the top pick due to its strong brand, consistent dividend growth (64 consecutive years), and thriving business performance, while cautioning that Kraft Heinz remains a turnaround risk and Kroger faces competitive pressures.

Costco's stock has underperformed the S&P 500 by 27 percentage points over the last six months, despite growing revenue, profits, and membership renewal rates. While the company maintains a premium valuation compared to retail peers due to strong membership loyalty, the article argues that at current prices, Costco is not as cheap as it appears. Headwinds from tariffs and fuel costs, combined with elevated valuations, suggest investors seeking faster growth may find better opportunities elsewhere.

Berkshire Hathaway's portfolio includes 26 dividend-paying stocks out of 29 total holdings. The article recommends Constellation Brands as the top dividend stock to buy, citing its 3.64% yield, cheap valuation at 11x earnings, strong free cash flow growth, and analyst price target suggesting 54% upside potential, despite recent headwinds from demographic shifts and immigration policy impacts.

Among Berkshire Hathaway's three main consumer staples holdings, Kroger emerges as the most attractive buy opportunity. While Coca-Cola remains the best quality company but has become expensive, and Kraft Heinz is distracted by restructuring plans, Kroger's recent pullback from March highs has created an attractive entry point. New CEO Greg Foran's price-cutting strategy is working to improve competitiveness, and the company maintains strong dividend growth with 20 consecutive years of increases and aggressive share buybacks.

Kroger reported Q2 adjusted EPS growth of 4.8% but disappointed on sales, with identical sales excluding fuel rising only 0.2%. The company cut fiscal 2026 identical-sales guidance to 0.2%-0.8% from 1%-2%, citing pharmacy headwinds, logistics pressures, and deflation. However, e-commerce sales surged 20% and Precision Marketing profit grew 24%, providing profit-mix improvements despite top-line constraints.

Kroger reported Q2 adjusted EPS growth of 4.8% but identical sales excluding fuel rose only 0.2%, prompting the company to lower fiscal 2026 identical-sales guidance to 0.2%-0.8%. While e-commerce sales grew 20% and private-label brands showed strength, the company faces headwinds from higher shrink, transportation costs, and wage investments. Analysts recommend a wait-and-see approach given the valuation discount but muted sales momentum.

Investor Michael Burry has increased his position in Sprouts Farmers Market to a "full position" after the stock declined 62% from its 2025 high. The grocery chain faces headwinds from difficult year-over-year comparisons and inflation pressuring consumer spending, but trades at attractive valuations (12x 2026 earnings). The key question is whether Sprouts can maintain its above-normal margins in a competitive industry.