Kroger and Macy’s: The Compounder vs the Turnaround
Kroger and Macy's report earnings on back-to-back mornings, and both stocks look interesting right now for completely different reasons. Understanding which kind of story actually belongs in a retirement portfolio changes how you read both reports.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
With Kroger (NYSE:KR | KR Price Prediction) and Macy’s (NYSE:M) both reporting before the open on consecutive mornings, but which one belongs in a long-duration income portfolio right now? Macy’s reports Thursday, September 10, 2026, and Kroger follows on Friday, September 11, 2026. Here’s the asymmetry: one has compounded for a decade and is temporarily on sale, the other just had its best year in memory but has structurally gone nowhere across ten years.
Volatility and the Long-Run Record
Beta measures how a stock moves relative to the broader market. A reading above 1 implies bigger swings than the index, while below 1 implies smaller. Grocers historically sit well below 1 and department stores well above, which sets up the more important comparison: the horizon inversion.
Kroger closed at $57.20 on September 8, 2026, leaving the stock down 15.9% over the past year yet up 81.5% over ten years. Macy’s closed at $22.45 and is up 31.4% over the past year but down 36.7% across ten years. A long-term compounder having a poor year is a fundamentally different proposition than a structurally challenged retailer having a good one. For a retirement account measured in decades, that distinction is everything.
Winner: Kroger.
Capital Returns and Dividend Track Record
Kroger’s quarterly dividend rose to $0.39 with the August 14, 2026, ex-date, up from $0.35 earlier in the year and $0.105 in mid-2016. The trailing 12-month payout stands at $1.44, with a forward annualized figure of $1.56. Buybacks reinforce the picture: a $2 billion authorization from December 2025, with $213 million repurchased in Q1.
Macy’s raised its quarterly dividend 5% in February 2026 to $0.1915 and has roughly $1.1 billion left on its buyback authorization, with $50 million repurchased in Q1. Real capital returns, but a shorter track record and a payout tied to a fleet still being reimagined.
Winner: Kroger.
Setup Into the Report
Macy’s raised its FY2026 outlook last quarter to net sales of $21.5 billion to $21.75 billion, comparable sales of +0.5% to +1.2%, and adjusted diluted EPS of $2.00 to $2.20, on the strength of its ninth straight EPS beat and Bloomingdale’s comps of +10.2%. Kroger reaffirmed adjusted EPS of $5.10 to $5.30 and free cash flow of $2.7 billion to $2.9 billion, though its Q1 adjusted EPS of $1.58 missed estimates by less than a cent, snapping a four-quarter beat streak. New CEO Greg Foran said on the call, “Taking costs out of this business is not optional. It’s the starting point for everything else we want to do.”
Kroger’s report also arrives with an acquisition and antitrust overhang that carries real weight for integration commentary and regulatory posture. Macy’s release, by contrast, is a progress check on the Bold New Chapter reset.
Winner: Kroger, on report significance and durability of guidance.
Verdict: Kroger for the Long Haul
For the retirement-focused investor, Kroger is the more attractive option. A decade of compounding, a dividend rising every year since 2016, defensive grocery cash flows, and a stock trading well below its one-year high combine to create a higher-quality entry point (the same never-sell-the-shares logic we laid out in a free dividend ladder guide here: Never Touch the Principal). Macy’s deserves credit for genuine execution under Tony Spring, including nine straight EPS beats and the strongest Q1 comps in four years, but department-store economics do not compound the way groceries do.
The single biggest risk to owning Kroger is an adverse regulatory or litigation outcome tied to its acquisition activity, which could sap the cost-out thesis Foran is selling.
Items to keep an eye on in the two releases:
- Kroger’s FY2026 EPS and free-cash-flow guidance, plus any pricing-investment commentary tied to the October 20, 2026, investor update.
- Macy’s second-half comp trajectory and the tariff-related gross-margin impact of 20 to 40 basis points.
- Any update on regulatory posture around Kroger’s deal activity.
Contact [email protected] for any questions or corrections.
Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.
Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.
Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.
Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.
