Kroger (KR) Approves 13.5% Dividend Hike, Two-for-One Split, New $500M Common Stock Buyback Plan

Kroger (NYSE: KR) announced that its Board of Directors approved a 13.5 percent increase to the company's quarterly dividend, a two-for-one split of its common shares, and a new $500 million share repurchase program.

"Today's actions reflect our Board of Directors' confidence in Kroger's long-term performance and ability to deliver growth consistently to our investors," said Rodney McMullen, Kroger's chairman and CEO. "The stock split will increase the accessibility of our shares and liquidity in the trading of our shares. We are especially excited that the stock split will make Kroger's common shares more accessible to all of our associates."

13.5% Quarterly Dividend Increase

Kroger's Board raised the quarterly dividend to 21 cents per share on a pre-split basis. Because the dividend will be paid after the stock split is effective, shareholders of record as of the close of business on August 14, 2015 will be paid 10.5 cents per split-adjusted share on September 1, 2015.

Kroger has delivered double-digit compound growth in its dividend since it was reinstated in 2006. The company continues to expect an increasing dividend over time.

2-for-1 Stock Split

Kroger's Board approved a two-for-one split of its common shares. On or about July 13, 2015, each shareholder of record as of the close of business on July 6, 2015 will receive a dividend of one common share for each common share held. Based on the net number of common shares outstanding as of May 23, 2015, the stock split will increase the net number of common shares outstanding from approximately 481 million to 962 million.

This is the fifth stock split in Kroger's history. The stock split previously in 1979, 1986, 1997 and 1999.

$500 Million Share Repurchase Program

Kroger's Board approved a $500 million share repurchase program, replacing the prior authorization, which has been exhausted.

"Kroger's strong financial position has allowed the company to return approximately $11.7 billion to shareholders through share repurchases since January 2000," said Mr. McMullen. "We remain committed to delivering value to shareholders. In fact, over the last four quarters, the company has returned more than $1.1 billion to shareholders through share buybacks and dividends combined."

It is not expected that any purchases will be made under this new Board-authorized plan for the remainder of fiscal 2015. Actual purchases will depend on market conditions.

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