Kroger Stock Dips After CEO Rodney McMullen Resigns: Retail Mood Takes A Hit

Shares of Kroger fell 3% on Monday after the grocery chain announced the resignation of Chairman and CEO Rodney McMullen following a board investigation, dragging down retail sentiment.

The board investigation of McMullen was connected to his personal conduct and is unrelated to the business, the company said, noting it “was inconsistent with Kroger's policy on business ethics.”

Kroger has named lead director Ronald "Ron" Sargent as chairman and interim CEO, effective immediately.  

According to a statement, Kroger’s board was made aware of “certain personal conduct” by McMullen on Feb. 21. The company then immediately retained outside independent counsel to conduct an investigation, overseen by a special board committee.

“McMullen's conduct is not related to the company's financial performance, operations or reporting, and it did not involve any Kroger associates,” the statement said.  

Kroger said a search committee has been hired to conduct a search for the next CEO.

"As interim CEO, I am committed to working alongside our proven and experienced management team and dedicated associates to ensure Kroger continues providing exceptional value for our customers," said Sargent.

Sargent, who has over 35 years of experience, has been a Kroger director since 2006 and has served as the lead director of Kroger since 2017. He spent the first decade  of his professional career at Kroger, working in several roles across stores, sales, marketing, manufacturing and strategy, the company said.

Sargent currently serves on the board of Wells Fargo & Co, as chair of the human resources committee and the board of Five Below Inc.

Sentiment on Stocktwits turned ‘extremely bearish’ from ‘bullish’ a week ago. Message volume climbed to ‘extremely high’ from ‘low.’

One bearish commenter was curious about what CEO McMullen did.

Kroger said it expects full-year identical sales without fuel to be at the high end of its guidance range and full-year adjusted earnings per share to be slightly above the high end of its guidance range.

Kroger is set to report its fourth quarter and full-year 2024 results on Thursday.

Kroger was subject to a lawsuit by fellow grocery chain Albertsons late last year after its $25 billion merger collapsed due to regulatory hurdles.

Kroger stock is up 2.9% year-to-date.

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