MW Albertsons cites slower GLP-1 growth, higher gas prices for a sales miss and downbeat outlook
By Bill Peters
Supermarket chain says it will pay out $774 million to settle opioid lawsuits and announces a dividend hike to lift the stock's yield above 4%
Albertsons said it booked a loss during the fourth quarter related to a settlement agreement stemming from the opioid crisis.
Albertsons shares were knocked lower Tuesday after the grocery-store chain forecast weaker-than-expected sales trends for this year and said surging gas prices were starting to squeeze some consumers.
Albertsons $(ACI)$ also announced a roughly $774 million settlement framework to resolve claims against the company stemming from the opioid crisis. The chain said it booked a loss related to that agreement in the latest quarter.
While the company extended its streak of profit beats and hiked its dividend by 13%, net sales missed expectations for the second straight quarter.
Albertsons - which runs, along with its namesake supermarkets, chains including Safeway, Vons and Pavilions - reported its results as Wall Street tries to gauge the Iran war's impact on consumers in the wake of several weeks of more expensive gasoline.
The grocer stood out from other companies that have reported earnings recently, such as JPMorgan Chase $(JPM)$ on Tuesday and Delta Air Lines $(DAL)$ and Levi Strauss $(LEVI)$ last week, and that said they had seen little impact from higher gas prices.
"What we're seeing is increasing pressure on the lower-income cohorts," Albertsons (ACI) CEO Susan Morris said on Albertsons' fourth-quarter earnings call on Tuesday, in response to an analyst's question about the implications of the conflict in the Middle East.
"It's reflected in ongoing affordability changes," she said.
Morris added that cuts to the Supplemental Nutrition Assistance Program, or SNAP - the food-assistance program that serves millions of people in the U.S. - that were made under the One Big Beautiful Bill Act signed into law last year were also affecting lower-income shoppers.
More consumers were also doing their shopping across multiple retailers, she said, adding that she was still expecting food prices industrywide to rise around 2%, but that "we have not been passing through that inflation at the 2% rate."
Shares of Albertsons were down 2.1% in recent afternoon trading but had pared earlier losses of 5.4%. They have slumped 8.6% amid a five-session losing streak, which would be the longest such streak since the six-day stretch that ended Nov. 4, 2025.
For the full fiscal year that runs through February 2027, Albertsons said it expects same-store sales to be flat to up 1% from the previous year, which is below the current average analyst estimate compiled by FactSet for a 1.2% increase.
For the fiscal fourth quarter, same-store sales increased 0.7%, to miss the FactSet consensus for a 1.7% rise. And net sales for the quarter increased to $20.25 billion from $18.79 billion but came in below expectations for $20.47 billion.
Management said that within Albertsons' pharmacy business, sales were hurt as the growth in sales of GLP-1 drugs eased and as some health-plan providers opt not to pay for weight-loss use and more people order the drugs directly.
Lower egg prices also weighed on sales, following shortages a year ago.
Albertsons said it swung to a fourth-quarter net loss of $480.8 million from net income of $171.8 million a year ago. That included a $599.8 million charge related to the opioid settlement.
Meanwhile, adjusted earnings per share, which excludes nonrecurring items such as the settlement charge, rose to 48 cents from 46 cents and was above the FactSet EPS consensus of 43 cents. That marked the seventh straight quarter of bottom-line beats.
During the call, management said the opioid settlement was payable over nine years. Albertsons said the settlement was not an admission of wrongdoing. Over the past several years, other retailers - like Walmart $(WMT)$ and CVS $(CVS)$ - have also reached agreements to pay billions to settle state, local and tribal governments' allegations of lax prescription protocols.
Separately, the company said it raised its quarterly dividend by 13%, to 17 cents a share from 15 cents a share. The new dividend will be payable on May 8 to shareholders of record on April 24.
Based on current stock prices, the new annual dividend rate implies a dividend yield of 4.12%, compared with a yield for the State Street Consumer Staples Select Sector SPDR exchange-traded fund XLP of 2.66% and an implied yield for the S&P 500 index SPX of 1.15%.
-Bill Peters
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(END) Dow Jones Newswires
April 14, 2026 15:49 ET (19:49 GMT)
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