CINCINNATI - The Kroger Co . (NYSE: NYSE:KR) announced today that its Board of Directors has approved an increase in the company's quarterly dividend. Shareholders will now receive a dividend of 32 cents per share, up from the previous $1.16 annual rate to a new rate of $1.28 per year. The increased dividend will be payable on September 1, 2024, to shareholders of record at the close of business on August 15, 2024.
This decision marks the 18th consecutive year that Kroger has raised its dividend, demonstrating a compounded annual growth rate of 13.5% since the dividend was reinstated in 2006. Rodney McMullen, Kroger's Chairman and CEO, expressed that the dividend increase reflects the Board's confidence in the company's business model and its ability to generate strong free cash flow, which supports ongoing shareholder returns and business investment.
Kroger's capital allocation strategy emphasizes the use of its free cash flow to invest in the company's long-term growth while maintaining a solid investment grade debt rating and returning capital to shareholders. The company aims to balance investment in the business with commitments to shareholders.
The company, which operates nearly 420,000 associates serving over eleven million customers daily, has a stated purpose to "Feed the Human Spirit™." Kroger is also working towards creating #ZeroHungerZeroWaste communities by 2025.
In other recent news, Kroger Co. has reported modest growth in its first quarter of 2024, with identical sales up by 0.5% and digital sales increasing by over 8%. The company's delivery solutions have seen a significant expansion of 17%, contributing to an adjusted FIFO operating profit of $1.499 billion.
Despite a slight decline in adjusted EPS, Kroger maintains a strong financial position with a net debt to adjusted EBITDA ratio of 1.25. The firm has also announced its strategic initiatives including capital project investments and the sale of its Kroger Specialty Pharmacy business. Looking ahead, Kroger executives are optimistic about their upcoming merger with Albertsons (NYSE:ACI) and expect improvements in the OG&A rate later in the year.
InvestingPro Insights
The Kroger Co. (NYSE: KR) continues to demonstrate financial resilience and a shareholder-friendly approach, as evidenced by its latest dividend increase. An InvestingPro Tip highlights that the company has not only raised its dividend for 18 consecutive years but has also maintained dividend payments for 19 consecutive years. This consistent dividend growth underscores Kroger's commitment to returning value to shareholders and may be particularly attractive to income-focused investors.
From a financial standpoint, Kroger's market capitalization stands at $35.59 billion, with a P/E ratio of 16.46, reflecting investor sentiment about its earnings potential. Moreover, the company's revenue for the last twelve months as of Q1 2025 is reported at an impressive $150.14 billion, with a gross profit margin of 22.99%. These InvestingPro Data points suggest that despite operating in a competitive industry, Kroger has managed to maintain a strong financial position and profitability.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available, which provide insights such as the company's cash position relative to its debt, and its performance in the oversold territory as suggested by the RSI. Interested readers can find these tips and more on the InvestingPro platform, and for those ready to dive deeper, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With a total of 14 analysts having revised their earnings downwards for the upcoming period, these tips could be crucial for making informed investment decisions.
As Kroger navigates through the complexities of the retail industry and macroeconomic pressures, these insights provide a snapshot of its financial health and market position, which could be valuable for shareholders and potential investors alike.
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