So, here's how your quarterly earnings can look great and terrible at the same time. Albertsons Companies (ACI) reported its fourth-quarter results Tuesday, and on an adjusted basis, it beat expectations with earnings of 48 cents per share. That's the good part. The not-so-good part? The company also posted a net loss of nearly half a billion dollars.
The culprit is a single, massive line item: a $773.8 million charge tied to a national opioid settlement framework. That one-time legal expense was enough to wipe out the company's profit and then some, turning what would have been net income into a loss of $480.8 million, or 94 cents per share. A year ago, the company reported a profit of $171.8 million. Shares traded lower following the news.
Revenue for the quarter, which ended February 28, 2026, came in at $20.25 billion. That missed analyst expectations of $20.47 billion, though it was up from $18.8 billion a year earlier. The company noted that about $1.4 billion of that sales increase came from having an extra week in the quarter this year.
Digging into the sales performance, identical sales—a key retail metric that looks at sales from stores open for at least a year—rose 0.7%. The driver was primarily the pharmacy business, which is interesting because that segment is also facing what the company called "pricing headwinds" tied to the Inflation Reduction Act and broader industry shifts. On the digital front, sales jumped 16%, and the company's loyalty program membership grew 12% to 51.2 million members.
Where the Money Went: Margins, Costs, and That Big Charge
When you back out that enormous opioid charge, the adjusted numbers tell a different story. Adjusted net income was $251.7 million, or the 48 cents per share that beat estimates. That's up slightly from 46 cents a year ago, with an estimated 3-cent benefit from that extra week in the quarter. Adjusted EBITDA, a measure of operating profitability, rose to $903.4 million, which included about a $68 million benefit from the extra week.
But even excluding the legal charge, there were some pressures. The company's gross margin slipped to 27.2% from 27.4% a year earlier. Excluding fuel and inventory accounting effects, it was down 25 basis points, which Albertsons attributed to higher costs for delivery and handling as its digital business grows. Selling and administrative expenses were 29.6% of revenue, though that figure was down two basis points year-over-year if you exclude fuel and the opioid-related charge.
On that charge, the company said it has reached a $774 million settlement framework to resolve "substantially all" opioid-related claims brought by state, local, and tribal governments. It was careful to note that the agreement is not an admission of wrongdoing or liability, but rather a step toward putting the litigation behind it.
The Full-Year Picture: Cash, Debt, and Returning Money to Shareholders
For the entire fiscal year 2025, revenue increased to $83.2 billion from $80.4 billion. Net income was $217.4 million, or 40 cents per share, while the adjusted figure was much healthier at $1.21 billion, or $2.18 per share.
The company generated $2.37 billion in operating cash flow. After spending $1.84 billion on capital expenditures, free cash flow was about $527 million. It ended the year with $198.6 million in cash and equivalents and total debt of $8.95 billion. During the year, it also issued $2.1 billion in senior notes to refinance existing debt.
Despite the quarterly loss, Albertsons is still finding money to return to shareholders. It raised its quarterly dividend by 13% to 17 cents per share. It also increased its remaining share repurchase authorization to $2.0 billion, after having bought back $1.49 billion of its own stock during fiscal 2025.
"Fiscal 2025 was a year of disciplined execution and resilience, as we closed the year with a solid fourth quarter that delivered strong Adjusted EBITDA despite meaningful top-line pharmacy-related headwinds," CEO Susan Morris said.
Looking Ahead: Guidance Comes with a Warning Label
For the new fiscal year 2026, Albertsons provided an outlook that acknowledges ongoing challenges. It expects adjusted earnings per share in the range of $2.22 to $2.32, which brackets the current analyst estimate of $2.28. It sees identical sales growth of 0% to 1% and adjusted EBITDA between $3.85 billion and $3.93 billion.
Baked into that guidance is an estimated 150-basis-point headwind from the Inflation Reduction Act's Medicare Drug Price Negotiation Program. So, the pharmacy pressures that showed up in this quarter's results aren't going away anytime soon.
Albertsons Companies shares were down 3.26% at $16.30 at the time of publication on Tuesday.
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