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Kroger posts net loss on $1.4 billion opioid case settlement charge

(Reuters) -Kroger reported a quarterly net loss on Friday as the U.S. retailer took a $1.4-billion charge related to a nationwide opioid settlement, sending its shares down as much as 3% in premarket trading.

The company said it would pay up to $1.2 billion to U.S. states and subdivisions and $36 million to Native American tribes, settling a majority of the opioid claims brought against it.

Thousands of lawsuits have been filed by states, local governments and Native American tribes, accusing drug companies of downplaying the risks of opioids, and distributors and pharmacies of ignoring red flags that they were being trafficked illegally.

Kroger, which is merging with smaller rival Albertsons in a $25-billion deal, said the settlement would not affect the company’s ability to close the deal.

Separately, the company said it would sell 413 grocery stores to C&S Wholesale Grocers, as the companies seek to secure clearance from U.S. regulators for their proposed $24.6-billion merger.

Kroger said it may need C&S to purchase up to an additional 237 stores in certain geographies to get the regulatory nod for the deal, which is expected to close in early 2024.

The Cincinnati, Ohio-based company, which is witnessing strained consumer spending, also missed same-store sales for the second quarter, with the CEO expecting the environment to “remain challenged”.

Kroger posted a loss of $180 million, or 25 cents per share, in the quarter, compared to a profit of $731 million, or $1.01 per share, from a year ago.

(Reporting by Juveria Tabassum and Savyata Mishra; Editing by Pooja Desai)


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