Kroger is targeting up to 11% annual earnings growth in its new three-year plan

Kroger aims to grow adjusted net earnings per share by 7% to 11% a year, compounded, from fiscal 2027 through fiscal 2029, the company said as it outlined a multi-year plan at an investor update in New York on Tuesday.

Kroger set a target of 3% to 6% compound annual growth in adjusted EBITDA over the same period. It also targets about 3% comparable sales growth in 2029, excluding fuel and pharmacy. The targets leave out the planned Giant Eagle purchase, and the company held to its outlook for 2026.

The new EPS goal is a pure earnings-growth yardstick. It takes the place of an earlier goal of 8% to 11% for total shareholder return, a measure that factored in dividend yield, and the company said it points to firmer earnings prospects. Kroger said its capital allocation strategy is unchanged. The company filed the announcement with the Securities and Exchange Commission.

The plan rests on three pillars. The first is a self-funded effort to deliver more value to customers, with investment in fresh foods and meals, growth in Our Brands private-label penetration and membership, and expansion into markets with attractive returns. The second is growth in e-commerce sales and Retail Media revenue, including Kroger Precision Marketing. The third is cost savings, drawn from sourcing more goods directly, buying with discipline, simplifying processes and building an operating model that scales more easily, with technology and AI supporting execution.

"We are making value more visible and focusing resources closer to the customer where we see the highest returns," CEO Greg Foran said in a statement.

CFO David Kennerley said in a statement that the framework gives a clearer line of sight from operating performance to shareholder value. "We remain focused on delivering customer value in a fully self-funded way, prioritizing high-return investments and disciplined cost savings so we can expand margins over time while continuing to invest in growth," Kennerley said.

The plan follows a series of recent changes at the company. Foran, who became CEO in February, told staff in a memo that Kroger plans to cut around 3,000 corporate positions over three years. That is roughly 37% of a corporate workforce of about 8,200. In September, Kroger lowered its fiscal 2026 identical sales outlook, excluding fuel, to a range of 0.2% to 0.8% from 1% to 2%. It kept its adjusted earnings guidance of $5.10 to $5.30 per share.

Middle-market grocers, including Kroger and Albertsons, are under pressure from Walmart $WMT's price reductions and from discount chains like Aldi, according to Reuters. Kroger stock rose about 2% in premarket trading on Tuesday.