CINCINNATI — With a focus on increasing square footage and building its presence in both new and existing markets, Kroger is poised for growth in 2013.
Speaking at its investor conference in New York, Kroger unveiled its long-term strategy for enhanced growth, which included raising its long term, fully-diluted earnings per share growth target from 6% to 8% to 8% to 11%, plus a current dividend of 2.5%. To support its growth strategy, Kroger expects to increase capital spending by an incremental $200 million annually and increase return on invested capital.
Also today, Kroger's board of directors approved a $500 million share repurchase program, replacing the existing authorization that had approximately $340 million remaining.
"Our proven strategy and market position provide a tremendous platform to accelerate growth and increase value creation for Kroger shareholders," said David Dillon, Kroger's chairman and chief executive officer. "We are confident that Kroger's unmatched knowledge of the customer and disciplined approach to deploying capital will drive growth at attractive levels of return. We will continue to use our strong free cash flow to deliver shareholder value through actions such as our recent 30% dividend increase and the continuation of our substantial share repurchase program."
In addition to selectively expanding its store base and the markets it serves, Kroger will also pursue other initiatives to drive growth, including:
New customer channels – Enhancing the company's digital and mobile platforms by leveraging its world-class customer insights program.
New store formats – Testing new store formats to provide greater access and shopping flexibility to customers.