Kroger Reaches Confidential Settlement with C&S Wholesale Grocers Over Lawsuit

Kroger has settled a lawsuit with C&S Wholesale Grocers, resolving a dispute over a $125 million termination fee related to the collapse of Kroger's proposed $24.6 billion merger with Albertsons. The settlement was reached confidentially, and all claims have been dismissed with prejudice. Kroger operates over 2,700 supermarkets and offers various services, including pharmacy and fuel services.

Kroger Co. (NYSE:KR) has reached a confidential settlement with C&S Wholesale Grocers, resolving a dispute over a $125 million termination fee related to the collapse of Kroger's proposed $24.6 billion merger with Albertsons. The lawsuit, filed by C&S in March, alleged that Kroger was obligated to pay the fee for failing to finalize the merger, which would have involved the transfer of nearly 600 supermarkets and private-label brands to C&S. Kroger, however, maintained that C&S was not entitled to the termination fee.

The settlement, which was reached on August 11, 2023, has been dismissed with prejudice, meaning C&S is barred from bringing the same claims against Kroger in the same court. This settlement comes amidst a period of operational simplification for Kroger, which has announced plans to cut nearly 1,000 jobs companywide to focus on lower prices and new store growth [3].

In the first quarter of 2023, Kroger reported net sales of $45.1 billion, excluding fuel, Kroger Specialty Pharmacy, and adjustment items. Sales increased by 3.7% compared to the same period last year, while identical sales without fuel and adjustment items increased by 3.2% [1]. The company also reported an adjusted FIFO operating profit of $1,518 million and an adjusted EPS of $1.49, marking a 4% increase compared to the same period last year [1].

Kroger operates over 2,700 supermarkets and multi-department stores under various banners, including Kroger, Ralphs, and Harris Teeter. The company also offers pharmacy, fuel, and financial services. While the settlement resolves a significant legal issue, investors should monitor Kroger's ongoing job cuts and operational changes to assess their impact on future financial performance.

References:
[1] https://ir.kroger.com/overview/default.aspx
[2] https://ca.finance.yahoo.com/news/kroger-kr-settles-lawsuit-c-043320793.html
[3] https://www.wlwt.com/article/kroger-jobs-cuts-announcement-ron-sargent/65900760