Albertsons Cos. has agreed to a $774 mn settlement to resolve all opioid-related claims, making the grocery chain one of the last major retailers to reach a broad deal tied to the opioid litigation wave, according to Bloomberg.
The company said the settlement led to a charge of about $600 mn last quarter, net of tax. That pushed Albertsons to a loss of roughly $480 mn for the period. Payments under the agreement will be spread across nine years.
Investors reacted quickly. Albertsons shares fell as much as 4.8%. Through Monday’s close, the stock had already slipped about 2% this year, while the S&P 500 was roughly flat.
Albertsons joins a long line of major retailers pulled into opioid litigation because they operate pharmacies. Over several years, thousands of complaints accused pharmacy chains and large retailers of failing to properly monitor opioid prescriptions.
CVS Health, Walmart, and Walgreens Boots Alliance began payouts worth more than $13 bn after proposing settlements in late 2022.
Kroger agreed in 2023 to pay as much as $1.2 bn to states and local governments, plus $36 mn to Native American tribes, under a nationwide settlement.
Alongside the legal update, Albertsons gave a cautious outlook for the fiscal year that began in March. The company expects same-store sales to range from flat to a 1% increase. Analysts, on average, had expected growth of 1.2%.
Adjusted earnings per share are projected to come in between $2.22 and $2.32, roughly in line with consensus estimates.
On a call with analysts, Albertsons said it expects food inflation to run at about 2%. The company also said it has not fully passed those costs through to customers, as it tries to protect its price position in a highly competitive market.
Management added that it is seeing increasing pressure on lower-income consumers. That comment lands hard because it points to a tougher demand environment even before any broader slowdown shows up in the numbers.
