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The Kroger CoLTS:0JS2 -0.49%62 Degree of Operating Leverage is -43.17 as of Apr. 2026. GuruFocus rates LTS:0JS2 with a GF Score™ of 62/100 and a GF Value™ of $67.51 (Modestly Undervalued). The stock has 2 warning signs investors should review. Among 305 Retail - Defensive companies, The Kroger Co ranks better than 95.74% on this metric.
Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue.
The Kroger Co's Degree of Operating Leverage for the quarter that ended in Apr. 2026 was -43.17. The higher Degree of Operating Leverage, the higher operating risk the company will take.
The industry rank for The Kroger Co's Degree of Operating Leverage or its related term are showing as below:
LTS:0JS2's Degree of Operating Leverage is ranked better than 95.74% of 305
companies
in the Retail - Defensive industry
Industry Median: 0.75
vs LTS:0JS2: -43.17
The Kroger Co (LTS:0JS2) Degree of Operating Leverage Explanation
Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.
A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.
Be Aware
The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.
The Kroger Co Degree of Operating Leverage Related Terms
The Kroger Co Degree of Operating Leverage Historical Data
* Premium members only.
The historical data trend for The Kroger Co's Degree of Operating Leverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
LTS:0JS2 vs SFM, ACI, WMK: Degree of Operating Leverage Comparison
For the Grocery Stores subindustry, The Kroger Co's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
The Kroger Co Degree of Operating Leverage vs Retail - Defensive Industry
For the Retail - Defensive industry and Consumer Defensive sector, The Kroger Co's Degree of Operating Leverage distribution charts can be found below:
* The bar in red indicates where The Kroger Co's Degree of Operating Leverage falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
What does a Degree of Operating Leverage of -43.17 mean?
The Kroger Co (LTS:0JS2) has a Degree of Operating Leverage of -43.17 as of Apr. 2026. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for The Kroger Co and its competitors. According to the industry distribution chart, The Kroger Co ranks #13 out of 305 companies in the Retail - Defensive industry, placing it in the top 4.3%.
Is The Kroger Co's Degree of Operating Leverage too high?
The Kroger Co's current Degree of Operating Leverage is -43.17. Based on the distribution chart, The Kroger Co ranks #13 out of 305 companies in the Retail - Defensive industry, which is in the top quartile — a strong position relative to peers. Overall, The Kroger Co has a GF Score™ of 62/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does The Kroger Co's Degree of Operating Leverage compare to SFM and ACI?
According to the Retail - Defensive industry distribution chart, The Kroger Co ranks #13 out of 305 companies for Degree of Operating Leverage. This places The Kroger Co in the top 4% of its industry — outperforming the majority of peers. The industry median Degree of Operating Leverage is 0.75. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Degree of Operating Leverage for a Retail - Defensive company?
The median Degree of Operating Leverage among Retail - Defensive companies is 0.75, based on 305 companies in the industry. Companies in the top quartile (top 25%) have a Degree of Operating Leverage significantly above this median, while those in the bottom quartile fall well below. However, Degree of Operating Leverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Degree of Operating Leverage mean?
A high Degree of Operating Leverage can signal that a stock is expensive relative to its fundamentals. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for The Kroger Co and its competitors. For the Retail - Defensive industry, the median Degree of Operating Leverage is 0.75 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. The Kroger Co's current Degree of Operating Leverage is -43.17. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is The Kroger Co stock overvalued right now?
Based on GuruFocus' analysis, The Kroger Co (LTS:0JS2) is currently considered Modestly Undervalued. The stock's GF Value™ is $67.51, compared to a current price of $56.96 — trading 15.6% below its estimated fair value. The current Degree of Operating Leverage is -43.17. The Kroger Co's overall GF Score™ is 62/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Degree of Operating Leverage calculated?
Degree of Operating Leverage is calculated from a company's financial statements. For The Kroger Co (LTS:0JS2), the current Degree of Operating Leverage is -43.17 as of Apr. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is The Kroger Co (LTS:0JS2) Overvalued in 2026?
Based on GuruFocus' analysis, The Kroger Co stock appears to be undervalued.
The current stock price of $56.96 is trading 15.6% below its estimated GF Value™ of $67.51.
GuruFocus considers The Kroger Co to be Modestly Undervalued.
Key valuation signals for LTS:0JS2:
Degree of Operating Leverage: -43.17
GF Value™: $67.51 vs. price of $56.96 (15.6% below fair value)
No single metric tells the full story. See the LTS:0JS2 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Founded in 1883, Kroger is the largest pure-play supermarket operator in the United States, operating roughly 2,700 stores across more than 30 banners. Kroger's business is primarily grocery-led (roughly 78% of sales), spanning fresh food and private-label offerings, complemented by fuel centers (9%) and pharmacies (12%). The firm also generates income from advertising, data analytics, and manufacturing.
62GF Score
Get the complete analysis for LTS:0JS2
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