Kroger Board of Directors Raises Quarterly Dividend 13 Percent

Rhea-AI Summary

The Kroger Co. (NYSE: KR) announced a dividend increase from 64 to 72 cents per share, effective September 1, 2020. This marks the 14th consecutive year of annual dividend increases, demonstrating a commitment to return value to shareholders. The next payment of 18 cents will go to shareholders on record as of August 14, 2020. Kroger's CEO emphasized the company's strong free cash flow and continued plans for dividend growth. The company aims to balance capital investments and shareholder returns while maintaining its investment-grade debt rating.

Positive

• Dividend increased from 64 to 72 cents per share.
• 14 consecutive years of annual dividend increases.
• Strong free cash flow generation.

Negative

• Future dividends depend on anticipated free cash flow and operating results.
• Risks related to COVID-19 could impact sales and profitability.

CINCINNATI, June 25, 2020 /PRNewswire/ -- The Kroger Co.'s (NYSE: KR) Board of Directors approved a dividend increase from 64 to 72 cents per year. The next quarterly dividend of 18 cents per share will be paid on September 1, 2020 to shareholders of record as of the close of business on August 14, 2020.

Kroger's quarterly dividend has grown at a double-digit compound annual growth rate since it was reinstated in 2006. This marks the 14^th consecutive year of annual dividend increases. The company continues to expect, subject to board approval, an increasing dividend over time.

"Kroger's 13 percent dividend increase reflects our ability to deliver strong free cash flow during uncertain times and throughout the economic cycle," said Rodney McMullen, Kroger's chairman and CEO. "It also reflects the Board of Directors' confidence in both our business model and our commitment to return value to shareholders and achieve consistently attractive total shareholder returns."

Kroger's capital allocation strategy is to use its adjusted free cash flow to invest in the business and drive profitable growth while also maintaining its current investment grade debt rating and returning capital to shareholders. The company actively balances the use of its adjusted free cash flow to achieve these goals.

• This press release contains forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, about the future performance of the company. These statements are based on management's assumptions and beliefs in light of the information currently available to it. Such statements are indicated by the words "ability," "expect," "continues," "confidence," "strategy," "goals," and "vision." Our ability to continue to fund dividends and increase our dividend over time will be affected by our ability to generate free cash flow at the levels anticipated and our ability to generate expected operating results which may be affected by: COVID-19 related factors, risks and challenges, including among others, the length of time that the pandemic continues, the temporary inability of customers to shop due to illness, quarantine, or other travel restrictions or financial hardship, shifts in demand away from discretionary or higher priced products to lower priced products, or stockpiling or similar pantry-filling activities, reduced workforces which may be caused by, but not limited to, the temporary inability of the workforce to work due to illness, quarantine, or government mandates, or temporary store closures due to reduced workforces or government mandates; labor negotiations or disputes; changes in the types and numbers of businesses that compete with Kroger; pricing and promotional activities of existing and new competitors, including non-traditional competitors, and the aggressiveness of that competition; Kroger's response to these actions; the state of the economy, including interest rates, the inflationary and deflationary trends in certain commodities, changes in tariffs, and the unemployment rate; the effect that fuel costs have on consumer spending; volatility of fuel margins; changes in government-funded benefit programs and the extent and effectiveness of any COVID-19 stimulus packages; manufacturing commodity costs; diesel fuel costs related to Kroger's logistics operations; trends in consumer spending; the extent to which Kroger's customers exercise caution in their purchasing in response to economic conditions; the uncertainty of economic growth or recession; changes in inflation or deflation in product and operating costs; stock repurchases; Kroger's ability to retain pharmacy sales from third party payors; consolidation in the healthcare industry, including pharmacy benefit managers; Kroger's ability to negotiate modifications to multi-employer pension plans; natural disasters or adverse weather conditions; the effect of public health crises or other significant catastrophic events, including the coronavirus; the potential costs and risks associated with potential cyber-attacks or data security breaches; the success of Kroger's future growth plans; the ability to execute on Restock Kroger; and the successful integration of merged companies and new partnerships.

These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially. We assume no obligation to update the information contained herein. Please refer to Kroger's reports and filings with the Securities and Exchange Commission for a further discussion of these risks and uncertainties.

About Kroger

At The Kroger Co. (NYSE: KR), we are Fresh for Everyone™ and dedicated to our Purpose: To Feed the Human Spirit®. We are, across our family of companies, nearly half a million associates who serve over 11 million customers daily through a seamless shopping experience under a variety of banner names. We are committed to creating #ZeroHungerZeroWaste communities by 2025. To learn more about us, visit our newsroom and investor relations site.

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SOURCE The Kroger Co.

FAQ

What is the new dividend amount for Kroger (KR)?

Kroger's new dividend amount is 72 cents per share.

When is the next dividend payment for Kroger (KR)?

The next dividend payment is on September 1, 2020.

What is the dividend growth history of Kroger (KR)?

Kroger has increased its dividend for 14 consecutive years.

What factors could affect Kroger's (KR) future dividends?

Future dividends may be affected by free cash flow levels and COVID-19 related risks.