Insider Move: Gabriel Arreaga Exercises Options, Realizing $1.37M At Kroger

A large exercise of company stock options by Gabriel Arreaga, Executive Vice President at Kroger KR was disclosed in a new SEC filing on June 26, as part of an insider exercise.

What Happened: Arreaga, Executive Vice President at Kroger, exercised stock options for 37,960 shares of KR stock. This information was disclosed in a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday. The exercise price of the options was $34.94 per share.

As of Friday morning, Kroger shares are down by 0.2%, with a current price of $71.14. This implies that Arreaga's 37,960 shares have a value of $1,374,152.

Unveiling the Story Behind Kroger

Kroger is one of the largest grocery retailers in the United States with about 2,700 stores across a portfolio of over 20 supermarket banners. The company boasts an ingrained presence in US communities, citing that it is a top-two grocer in most of its major market areas. Over one fourth of Kroger's roughly $110 billion in nonperishable and fresh food sales (about 75% of revenue) stems from its private-label portfolio, of which the company manufactures about 30% of units via its own food production plants. The company also operates fuel stations and pharmacies at 60% and 80% of its locations, respectively.

Kroger: Financial Performance Dissected

Revenue Growth: Kroger displayed positive results in 3 months. As of 30 April, 2025, the company achieved a solid revenue growth rate of approximately 31.51%. This indicates a notable increase in the company's top-line earnings. When compared to others in the Consumer Staples sector, the company excelled with a growth rate higher than the average among peers.

Holistic Profitability Examination:

• Gross Margin: The company shows a low gross margin of 23.42%, suggesting potential challenges in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Kroger's EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 1.3.

Debt Management: Kroger's debt-to-equity ratio stands notably higher than the industry average, reaching 2.83. This indicates a heavier reliance on borrowed funds, raising concerns about financial leverage.

Financial Valuation:

• Price to Earnings (P/E) Ratio: The P/E ratio of 19.42 is lower than the industry average, implying a discounted valuation for Kroger's stock.

• Price to Sales (P/S) Ratio: The Price to Sales ratio is 0.34, which is lower than the industry average. This suggests a possible undervaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Kroger's EV/EBITDA ratio, lower than industry averages at 8.63, indicates attractively priced shares.

Market Capitalization Analysis: Above industry benchmarks, the company's market capitalization emphasizes a noteworthy size, indicative of a strong market presence.

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Why Pay Attention to Insider Transactions

In the complex landscape of investment decisions, investors should approach insider transactions as part of a comprehensive analysis, considering various elements.

In the realm of legality, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities under Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are required to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.

Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.

Important Transaction Codes

When analyzing transactions, investors tend to focus on those in the open market, detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase,while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Kroger's Insider Trades.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.