Kroger Raises Quarterly Dividend 11.4% to $0.39

The Kroger Co. raised its quarterly dividend to $0.39 a share from $0.35, an increase of 11.4%. The higher rate first went ex-dividend on August 14, 2026; the next ex-dividend date is November 16, 2026. The new annual dividend is $1.56 a share.

Why the dividend changed

Kroger’s board attributed the increase to confidence in the grocer’s operating performance and durable free-cash-flow generation. The company said its capital-allocation priorities remain investing in the business, preserving its investment-grade debt rating and returning capital to shareholders. The increase applies to the regular quarterly distribution and is not connected to a split, merger, spin-off or special dividend. Kroger’s dividend announcement

The latest results provide context for that confidence. Second-quarter adjusted earnings per share grew 5%, while adjusted eCommerce sales grew 20%. Kroger credited cost savings, pharmacy and fuel performance, and better eCommerce profitability. The company reaffirmed full-year adjusted earnings and free-cash-flow guidance, including expected free cash flow of $2.7 billion to $2.9 billion. Kroger’s second-quarter results

There is also pressure behind the numbers. Kroger lowered its full-year identical-sales guidance excluding fuel to 0.2% to 0.8%, citing first-half results and the macroeconomic environment. The dividend increase therefore rests more on earnings resilience, cash generation and cost discipline than on rapid near-term sales growth. The company also repurchased $1.2 billion of shares during the first half, showing that the dividend remains one component of a broader capital-return program. Kroger’s second-quarter results

Dividend track record

The payment record shows a steady pattern of annual increases. Kroger distributed $0.68 a share in 2020, followed by $0.78 in 2021, $0.94 in 2022, $1.10 in 2023, $1.22 in 2024 and $1.34 in 2025. The annual total rose 17.0% in 2023, 10.9% in 2024 and 9.8% in 2025. Its five-year dividend growth rate is 14.5% annualized.

The recent quarterly sequence reinforces that pattern. Kroger paid $0.32 through May 2025, moved to $0.35 in August 2025 and maintained that rate through May 2026 before adopting $0.39 in August 2026. The last annual cut was in 2006. Kroger says the latest increase marks its 20th consecutive year of dividend increases, the longer company-reported record. Kroger’s dividend announcement

Is the dividend covered?

The dividend consumes 76% of earnings. That indicates positive earnings coverage, although the cushion is narrower than it would be with a lower payout ratio. Continued coverage therefore depends on Kroger converting its operating results into sustained earnings and cash flow.

SmarterDividends rates the dividend A with a safety score of 81. That places it in the very safe category, defined as a score of 80-100. The grade is consistent with the company’s free-cash-flow outlook and stated commitment to its investment-grade balance sheet, but it does not eliminate operating risks such as weak sales, cost inflation or heavier capital requirements.

Yield and valuation

At a share price of $59.08, Kroger’s forward dividend yield is 2.71%. That is below the Consumer Defensive sector median forward yield of 3.21%, despite the latest double-digit increase in the quarterly rate.

SmarterDividends estimates fair value at $55.40 and classifies the valuation as fair. The valuation measure indicates 8% downside to fair value. Taken together, the figures show a yield below the sector benchmark and a market price near, but above, the fair-value estimate.

What to watch

The next scheduled ex-dividend date is November 16, 2026. Beyond that payment, the central coverage measures are Kroger’s progress against free-cash-flow guidance of $2.7 billion to $2.9 billion and whether identical sales stabilize within the revised 0.2% to 0.8% range. The company also had about $800 million remaining under its share-repurchase authorization at the end of the second quarter, with completion planned by the end of fiscal 2026. Kroger’s second-quarter results

Kroger’s investor day on October 20, 2026, is the next identified strategy event. Management plans to discuss strategic priorities and its long-term financial outlook, making the presentation relevant to future cash generation and capital-allocation decisions. Kroger’s investor-day announcement