Kroger also posts second-quarter adjusted earnings Friday of 96 cents a share, better than analysts' estimates, but sales that came up short.
It’s been a big day for Kroger. In one fell swoop, the company missed second-quarter revenue expectations, announced it was paying more than $1 billion to settle opioid claims, and said it was selling more than 400 stores to rival C&S.
Kroger said it recorded a $1.4 billion charge in its second quarter to settle a majority of opioid claims brought against the company. The grocer agreed to pay up to $1.2 billion to states and subdivisions and $36 million to Native American tribes in funding for abatement efforts, as well as about $177 million to cover attorneys’ fees and costs to settle the majority of opioid claims, according to a press release.
In addition, Kroger and Albertsons Cos. announced they had reached a deal to divest hundreds of stores to C&S Wholesale Grocers, putting the companies one step closer toward finalizing their proposed merger. Under the terms of the deal, C&S will buy 413 stores, eight distribution centers, two offices, and five private label brands from Kroger for about $1.9 billion, the companies said. Kroger may require C&S to buy 237 more stores to secure clearance for the merger.
“Following the announcement of our proposed merger with Albertsons Cos., we embarked on a robust and thoughtful process to identify a well-capitalized buyer who will operate as a fierce competitor and ensure divested stores and their associates will continue serving their communities in the ways they do today,” said Kroger CEO Rodney McMullen. “C&S achieves all these objectives.”
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