Kroger appoints Sargent as interim CEO amid McMullen exit

CINCINNATI - The Kroger Co . (NYSE: NYSE:KR), a $46.9 billion market cap retail giant with a "GOOD" financial health rating according to InvestingPro, has announced significant changes to its leadership, with Rodney McMullen stepping down as Chairman and CEO following a Board investigation into personal conduct that violated the company’s ethical policies. Effective immediately, Ronald "Ron" Sargent, previously the Lead Director, has been appointed as the interim CEO and Chairman of the Board of Directors.

The Board’s investigation into McMullen’s conduct, which began on February 21, found that his actions were not related to Kroger’s operational, financial performance, or reporting, and did not involve Kroger associates. The company has not disclosed specific details regarding the nature of McMullen’s conduct. The company maintains strong financial fundamentals with a healthy current ratio of 1.54 and has demonstrated consistent shareholder value, raising its dividend for 19 consecutive years.

Sargent, a Kroger veteran and former Chairman and CEO of Staples, Inc., has served on Kroger’s board since 2006 and as the lead director since 2017. His extensive retail experience is expected to guide Kroger through this transitional period. In his new role, Sargent will step down from his positions on the Audit Committee, the Corporate Governance Committee, and the Public Responsibilities Committee.

Mark Sutton has been named Kroger’s lead independent director, emphasizing continuity in the company’s strategic direction. A Search Committee has been formed and is working with a nationally recognized firm to find a permanent CEO.

Kroger anticipates its full-year Identical Sales without fuel to be at the high end of its guidance range and its full-year Adjusted Earnings Per Share to be slightly above the high end of its guidance range. The company will discuss its fourth quarter and full-year 2024 results, along with full-year 2025 guidance, during a webcast on Thursday, March 6, 2025.

This leadership change comes at a time when Kroger continues to position itself as a key player in the retail food industry, serving millions of customers daily and focusing on its mission to create #ZeroHungerZeroWaste communities.

The information in this article is based on a press release statement from The Kroger Co.

In other recent news, Kroger has announced significant developments that may interest investors. The company has appointed David Kennerley as its new Chief Financial Officer, succeeding Gary Millerchip. This change is part of a broader executive restructuring, with Guggenheim highlighting the move as a positive step for Kroger’s financial planning. In terms of financial outlook, Jefferies has raised its price target for Kroger to $75, maintaining a Buy rating, while Evercore ISI also maintains an Outperform rating with the same price target. These endorsements reflect confidence in Kroger’s potential for growth amidst rising food inflation and consumer trends favoring at-home food consumption.

Additionally, Kroger Health has entered into a new agreement with Express Scripts, expanding prescription medication and health service access to Express Scripts customers, potentially impacting over 100 million people. This partnership aligns with Kroger’s strategic goal of enhancing healthcare services. Moreover, Guggenheim has maintained a Buy rating with a $71 price target, citing anticipated growth in comparable sales and earnings before interest and taxes. The firm notes Kroger’s strategic deployment of its $8 billion cash reserve as a positive factor for future growth. These recent developments suggest a focus on strengthening both leadership and service offerings, positioning Kroger for continued progress in the grocery and healthcare sectors.

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