Shares of Kroger Co. KR dropped 2.7% toward a six-month low in premarket trading Friday, after the grocery chain reported fiscal second-quarter sales that missed expectations and said it recorded a $1.4 billion charge to settle opioid claims. For the quarter through July, the company swung to a net loss of $180 million, or 25 cents a share, from net income of $732 million, or $1.00 a share, in the year-ago period. Excluding nonrecurring items, such as the charge for the opioid settlement, adjusted earnings per share of 96 cents beat the FactSet consensus of 91 cents. Net sales fell 2.3% to $33.85 billion, below the FactSet consensus of $34.12 billion, while same-store sales grew 1.0% but missed expectations of a 1.3% rise. The company affirmed its fiscal 2023 outlook for adjusted EPS of $4.45 to $4.60 and same-store sales growth of 1.0% to 2.0%. Separately, the company agreed to pay $1.2 billion to states and subdivisions and $36 million to Native American tribes, in installments over the 11 years, to settle the majority of opioid claims. Kroger said the settlement will not affect its ability to close the proposed acquisition of Albertsons Cos. ACI, which has seen some regulatory pushback. Kroger’s stock has slipped 0.5% over the past three months through Thursday, while the S&P 500 SPX has gained 3.7%.
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