Kroger Company (KR) delivered the classic good news, bad news routine on Thursday with third-quarter results that had Wall Street analysts reaching for their red pens.

The grocery giant posted adjusted earnings per share of $1.05, topping analyst expectations of $1.03. That's the good part. The less exciting news? Revenue came in at $33.859 billion, missing the Street's forecast of $34.155 billion. When you're operating at Kroger's scale, that $300 million shortfall gets noticed.

CEO Ron Sargent highlighted a bright spot in the company's digital strategy. "Our eCommerce business posted another quarter of impressive performance. We have now completed our strategic review which we expect will make our e-commerce business profitable in 2026," he said. Getting an e-commerce operation to profitability in retail is no small feat, so that 2026 target matters.

CFO David Kennerley provided updated guidance that reflects the current reality. "Given our year-to-date results and outlook for the remainder of the year, we are narrowing our identical sales without fuel guidance to a new range of 2.8% to 3.0%," he noted. Narrowing guidance typically means management is gaining clarity, though not necessarily the kind that excites investors.

Kroger shares inched up 0.1% to $63.19 on Friday, a muted response that makes sense given the mixed results.

Analysts Adjust Their Outlook

Following the earnings announcement, several prominent analysts recalibrated their price targets while generally maintaining their positive stance on the stock:

• Telsey Advisory Group's Joseph Feldman kept his Outperform rating but trimmed his target from $82 to $80.
• JP Morgan's Thomas Palmer maintained a Neutral rating and lowered his target from $73 to $71.
• Wells Fargo's Edward Kelly stuck with an Overweight rating but made the steepest cut, dropping from $78 to $70.
• Evercore ISI Group's Michael Montani held his Outperform rating while reducing his target from $80 to $77.
• UBS analyst Michael Lasser kept a Neutral rating and lowered his target from $74 to $70.

The pattern here is pretty clear: analysts still generally like Kroger's long-term story, but they're adjusting expectations in light of the current operating environment. When revenue misses and guidance gets "narrowed," price targets follow suit.