Kroger Announces Agreements for $5.0B Accelerated Share Repurchase Program

Rhea-AI Summary

Kroger (NYSE: KR) has announced Accelerated Share Repurchase (ASR) agreements with Wells Fargo Bank and Citibank to repurchase $5.0 billion in common stock. The company will receive an initial delivery of approximately 65.6 million shares on December 20, 2024, representing about 80% of the total expected shares. The ASR is part of a larger $7.5 billion share repurchase authorization, with $2.5 billion remaining capacity for future buybacks. The program will be funded with existing cash, and final settlement is expected by the third fiscal quarter of 2025.

Positive

• Large $5.0B share repurchase program demonstrates strong cash position
• Initial delivery of 65.6M shares indicates significant reduction in shares outstanding
• $2.5B additional repurchase capacity provides flexibility for future buybacks
• Program funded with existing cash, showing strong liquidity position

Negative

• Significant cash outlay of $5.0B reduces available capital for operations or investments
• Large cash deployment might limit financial flexibility for future opportunities

CINCINNATI, Ohio, Dec. 19, 2024 /PRNewswire/ -- The Kroger Co. (NYSE: KR) today announced that it entered into Accelerated Share Repurchase ("ASR") agreements with each of Wells Fargo Bank, National Association and Citibank, N.A. (the "Dealers") to repurchase, in aggregate, $5.0 billion in shares of Kroger common stock. The ASR agreements will be completed under Kroger's recently announced $7.5 billion share repurchase authorization. Kroger is funding the share repurchases under the ASR agreements with existing cash on hand.

Under the ASR agreements, Kroger will pay $5.0 billion to the Dealers and expects to receive an initial delivery of approximately 65.6 million shares of Kroger common stock on December 20, 2024, representing approximately 80% of the total number of shares of Kroger common stock that could be purchased with $5.0 billion at a price per share equal to the closing price of Kroger common shares on December 19, 2024. The total numbers of shares purchased by Kroger pursuant to the ASR agreements will be based on the average of the volume-weighted average prices of Kroger common shares on specified dates during the term of each ASR agreement, less a discount, and subject to adjustments pursuant to the terms and conditions of the ASR agreements. Final settlement under the ASR agreements is expected to occur no later than the third fiscal quarter of Kroger's Fiscal 2025.

In addition to the ASR program, Kroger has $2.5 billion of capacity remaining under its share repurchase authorization for incremental share repurchases over time.

About Kroger
At The Kroger Co. (NYSE: KR), we are dedicated to our Purpose: To Feed the Human Spirit™. We are, across our family of companies nearly 420,000 associates who serve over 11 million customers daily through a seamless digital shopping experience and retail food stores under a variety of banner names, serving America through food inspiration and uplift, and creating #ZeroHungerZeroWaste communities. To learn more about us, visit our newsroom and investor relations site.

This press release contains certain statements that constitute "forward-looking statements" about management's plans, goals and expectations with respect to the accelerated share repurchase program, Kroger's financial position and 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 words or phrases such as "expect," "may," "will," and variations of such words and similar phrases. Various uncertainties and other factors could cause actual results to differ materially from those contained in the forward-looking statements, including statements regarding the amount, timing and delivery of shares of Kroger common stock as currently planned, and other risks and uncertainties identified in "Risk Factors" in our annual report on Form 10-K for our last fiscal year and any subsequent filings.

Kroger assumes no obligation to update the information contained herein unless required by applicable law. Please refer to Kroger's reports and filings with the Securities and Exchange Commission for a further discussion of these risks and uncertainties.

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SOURCE The Kroger Co.

FAQ

How much is Kroger's (KR) new share repurchase program worth?

Kroger's new Accelerated Share Repurchase (ASR) program is worth $5.0 billion, part of a larger $7.5 billion share repurchase authorization.

When will Kroger (KR) complete its $5.0B share repurchase program?

The final settlement of Kroger's ASR program is expected to occur no later than the third fiscal quarter of Fiscal 2025.

How many shares will Kroger (KR) initially receive under the ASR program?

Kroger will receive an initial delivery of approximately 65.6 million shares on December 20, 2024, representing about 80% of the total expected shares.

How is Kroger (KR) funding the $5.0B share repurchase program?

Kroger is funding the share repurchases under the ASR agreements with existing cash on hand.

How much repurchase capacity remains after Kroger's (KR) $5.0B ASR program?

Kroger has $2.5 billion of capacity remaining under its share repurchase authorization for incremental share repurchases.