Kroger Co. (NYSE: KR) informed the market that they have dismissed their Chairman and Chief Executive Officer, Rodney McMullen, following a misconduct investigation with the Board of Directors regarding his personal affairs. The Board adjudged that there was no impact on the company’s operations and finances, however, his conduct did violate the Company’s Ethics Policies.
Leadership Transition
Ronald Sargent, a long-serving director of Kroger and previously the CEO of Staples, has assumed the role of Chairman and will also serve as the Interim CEO. He will be succeeded by Mark Sutton, who will assume the role of the Company’s Lead Independent Director. The Board of Directors has resolved to appoint a permanent Chief Executive Officer’s search committee and engaged an Executive Search Firm to find his replacement. Sargent brings decades of retail experience with him, including his earlier positions at Kroger where he rose through the ranks and afterwards as CEO of Staples. He has served as a Director of Kroger since 2006 and has been instrumental to many of the strategic decisions of the Company. His focus will be on day-to-day operations and managing the business in relation to operational continuity planning alongside long-term sustainable value creation for all stakeholders of the Company.
Board’s Investigation
The Board of Directors became aware of McMullen’s activities on February 21, 2023, and immediately initiated an independent investigation with external counsel. The Board also noted that this situation did not involve the company’s finances, business operations, reporting, or any employees of Kroger.
Financial Outlook
Kroger continues to expects sales and earnings, even with the shift in leadership. The company sales for the year is still expected to be in line with guidance regarding identical sales excluding fuel. Adjusted EPS is also anticipated to exceed expectations. Further details will be disclosed during the earnings call held on March 6, 2025.
Kroger operates with a workforce of approximately 420,000 and has more than 11 million customers on a daily basis. The company remains committed to fueling digital investments, store operations, and other sustainability efforts, all of which support its core mission: ‘To Feed the Human Spirit™.’
What’s Next?
The Board is still on the track to appoint a CEO who will lead the company towards the desired direction. Sargent is most suited to provide extensive guidance during this transitional period. Customer value, investment in human capital, and market share will continue to be primary focus for Kroger.
