This Omni Talk Retail Fast Five segment tackles Kroger's Q1 fiscal 2026 earnings, where the grocery giant posted $46.1 billion in total sales and announced that its e-commerce business turned a profit for the very first time, ahead of schedule.

Chris Walton and Jenn Hahn give credit where it's due, but push back hard on the feel-good narrative. With identical sales missing expectations, e-commerce growth lagging the broader market surge discussed in the previous headline, and CEO Ron Ferens admitting that only two out of five stores are in very good condition, the duo asks whether Kroger's digital milestone is a genuine turning point or a shiny distraction from deeper operational challenges.

They also weigh in on what a real turnaround looks like, how much runway a new CEO deserves, and why the store experience still has to be at the center of any recovery story.

⏩ Tune in for the full episode here: https://youtu.be/k2JviUlR0-Q

But its identical sales, excluding fuel, rose just 1%, which came in below expectations.

However, according to Grocery Dive and Kroger's earnings release, the purported milestone of the quarter was that Kroger's E Commerce business, including its media operations, turned a profit for the first time ever, ever in Q1, ahead of management's original timeline.

Adjusted E Commerce sales grew 19% in the quarter, led by delivery and Kroger Precision Marketing profit grew more than 20%.

CEO Greg Forens said he has visited over 100 stores since taking the role and observed that roughly two out of five are in very good condition, two out of five are in moderate condition, and one out of five needs meaningful improvement, which if you're keeping score at home, means that more than half the store base has work to do.

Jen, how would you assess where Kroger stands in its turnaround right now and is the digital story the feel good story Kroger is pitching it to be?

I mean, I think this is positive momentum.

I like to celebrate all the little wins.

So I'll call this a small win in the fact that E Grocery and Retail Media are turning a profit for the first time.

I mean, we just talked about that in the last headline.

We have to be able to do that profit and perhaps they've already looked at Sweden.

Chris I don't know, maybe that's their secret.

But I I so I definitely see it as positive momentum.

I just, I have a really hard time calling something a feel good story if the CEO says only 2 out of 5 stores are in very good condition.

I realize we're talking a lot about E Grocery, but we've, I mean it's very clear the store still matters, the footprint still matters.

And I like the honesty there.

I like that he's just putting it out there.

Like I have visited this many stores and two out of five are in very good condition because you have to be able to name it to fix it.

Yeah, I like it.

But there's obviously significant work to be done in a turnaround if your stores are in that situation.

So for it to be the feel good story about the turnaround, I think we'd have to see both E Grocery and the stores improving.

And right now it feels like the stores aren't there yet.

Yeah, I agree.

I think the E Commerce headline you know, I think it feels like a data point that gets, gets shared out when there's nothing else good to talk about.

That's kind of what I'm thinking about it when I think back to how, you know, how I read the tea leaves on earnings announcements but because I don't think it's really a feel good story at all.

I mean just based on the data we just went through exhaustively in the last headline, Jen, they're losing share like that, that's not keeping pace.

The 20, what 19, 20% growth, you know, that I come, that I, that I remarked on like that's losing share relative to the other, the other headline we talked about.

That's not good.

And the other point I'd make too about the store side.

He's been in position.

I went back and looked Jen, he's been, I'm curious what you think on this too.

He's been in position now for six months which is a decent amount of time in grocery because we're not talking about apparel here.

We've got nine month lead times and it's going to take a while to readjust everything.

So you're already losing sharing e grocery half the store base needs improvement self admittedly to his credit, can he really just flip the switch operationally and turn things around when Amazon and Walmart are gunning for them the way that they are?

I, I kind of actually think this is not a feel good story at all and it's kind of a warning story in terms of like this, this, this Kroger story could get a lot worse before it gets better.

Better.

But I don't know Jen, talk me off the ledge.

Don't jump Chris.

Balls don't jump Jen.

Eat the Swedish meatballs.

Hear you on that.

I, you know it's awesome that they turn a profit but with you bringing up the stats from the last headline.

Yeah.

Every single category from the last headline was improving 25% or more while they're boasting, you know, 19 and 20.

Right.

So to me that shows that they're not really keeping pace.

I don't know like I don't know what he's done in the last six months.

Exactly.

I agree with you.

Six months is a good amount of time.

I would say 12 months is, is fair to judge a CEO on turnaround steps because sometimes it can take three to six months to even name it to fix it.

Right.

So Per, I would only assume that if he's putting that stat out there about the stores, his number one priority is I'm gonna go fix this and put a different stat out in six months.

Right.

So I don't think you should jump.

But I do agree with you that there are a couple of warning signs here that don't look so pretty.

Hopefully they're just bringing them to light so they can fix them.

Yeah, I'm looking over the edge of the bridge to see how high it is.

That's kind of where my head is on this one, Jen.

I'm not.

I'm not sure either.

And from the people I talk to, people love him too.

People that have worked with him love him.

They think that he's the single best retail operator merchant they've ever seen.

And so I give him a lot of credit, but hopefully he's got a plan and he's going to execute on it.

And it's funny because actually between when I put my thoughts together for this headline and you and I are recording this, I actually saw him out on social media talking about his, I think his 5F plan to get Kroger where it needs to be, so hopefully he can do it.