Kroger Co (NYSE:KR) saw its stock price just clear breakeven on releasing fourth-quarter results.
Operating profit registered at $537 million in the latest quarter, compared to $391 million. For the year, the figure was $2.3 billion, compared to $2.6 billion in the prior-year quarter.
Kroger's capital allocation strategy is to use its adjusted free cash flow to invest in the business and drive profitable growth while also maintaining its current investment grade debt rating and returning capital to shareholders. The company actively balances the use of its adjusted free cash flow to achieve these goals.
Consistent with its financial strategy, Kroger reduced net total debt by $1.1 billion over the last four quarters. Kroger's net total debt to adjusted EBITDA ratio is 2.48, compared to 2.83 a year ago. The company's net total debt to adjusted EBITDA ratio target range is 2.30 to 2.50.
In total, Kroger returned $951 million to shareholders in 2019.
Kroger repurchased $400 million shares in the fourth quarter of 2019 under its $1 billion board authorization announced November 5, 2019.
In 2019, Kroger increased the dividend by 14%, from 56 cents to 64 cents per year, marking the 13th consecutive year of dividend increases, which resulted in a payout of $486 million.
The company's quarterly dividend has grown at a double-digit compound annual growth rate since it was reinstated in 2006. The company continues to expect, subject to board approval, an increasing dividend over time.
Said CEO Rodney McMullen, "We are pleased with our 2019 results and improving trends in our supermarket business. We delivered on our commitments for ID sales without fuel, adjusted FIFO operating profit, and cost savings in addition to generating over $100 million of incremental operating profit through alternative profit streams in 2019.
"We also delivered strong adjusted free cash flow during the year, consistent with the total shareholder return model outlined at our Investor Day."
KR shares added 14 cents to $31.10
