The Kroger Co. has announced a two-for-one stock split to take effect in July, along with a 13.5 percent increase in the company’s quarterly dividend. The company also announced its intent to launch a $500 million share repurchase program.
The stock split, which is the company’s first since 1999, is a reflection of the board’s confidence in the company’s long-term performance and growth expectations, according to Kroger chairman and CEO Rodney McMullen. The stock split also will make Kroger’s stock, which has climbed as high as $77 in recent months, more accessible for Kroger employees who want to invest in the company.
"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,” McMullen said in a statement.
Kroger has marked a total of four stock splits in its history previous to this one, occurring in 1979, 1986, 1997 and 1999.
The increased quarterly dividend of 21 cents per share, on a pre-split basis, will be paid after the stock split is effective, with shareholders of record on Aug. 14 being paid 10.5 cents per split-adjusted share on Sept. 1.
The $500 million stock buyback plan has been approved by the Board, replacing the previous buyback authorization, which has been exhausted. Purchases under the new buyback plan are not expected to take place during fiscal 2015.
"Kroger's strong financial position has allowed the company to return approximately $11.7 billion to shareholders through share repurchases since January 2000," McMullen said.
Kroger, one of the world's largest retailers, employs nearly 400,000 associates in 2,626 supermarkets and multi-department stores in 34 states and the District of Columbia under two dozen local banner names, including Kroger, City Market, Dillons, Food 4 Less, Fred Meyer, Fry's, Harris Teeter, Jay C, King Soopers, QFC, Ralphs and Smith's. The company also operates 780 convenience stores, 327 fine jewelry stores, 1,342 supermarket fuel centers and 37 food processing plants in the United States.