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Albertsons updates risks in public offering in wake of COVID: economy, meat, worker safety

Boise-based Albertsons Companies filed an updated prospectus as part of its effort to take the company public.

The long document, filed with the Securities and Exchange Commission Tuesday, the company updated many items in its prospectus. Mentions of COVID-19 show up in the document dozens of times.

A key section, which lists risk factors, saw significant revision. It zeroes in on the unstable economic environment – and potential disruption to supply chains.

Economic instability

“We may experience materially adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur as a result of efforts to curb the spread of coronavirus,” the prospectus notes. “Consumers may reduce spending onnon-essentialitems, purchase value-oriented products or increasingly rely on food discounters in an effort to secure the food and drug products that they need, all of which could impact our sales and profit.”

The company last week reported a rapid rise in revenue for March and April. It didn’t detail changes in expense or profit during its quarterly earnings release.

Meat supply

Albertsons cited increasing concerns around the supply of meat. A number of packaging plants around the country closed after a spike in COVID-19 cases.

“Currently, the supply of meat products has been impacted by the shutdown of certain key production facilities due to workforce illness,” the company wrote. “We have good working relationships with major meat suppliers, smaller domestic suppliers and international suppliers, and we stay in regular contact to assess production capacity and product availability.”

Albertsons said it bumped up the number of suppliers and changed some of its stocking tactics to respond.

“Based on current discussions with industry leaders, we anticipate that the meat supply chain will remain challenging for the near future,” the prospectus notes. “The supply of each product will return to pre-coronavirus (COVID-19) levels at different times, and that there can be no assurance that our efforts to ensure in-stock positions for all of the products that our customers require will be successful.”

Some Albertsons stores implemented limits on the number of meat products customers can buy.

[Q&A with Albertsons: Worker safety, hiring furloughed workers, COVID precautions – and when the TP might return]

COVID & employees

Albertsons also alerted investors to the possibility of litigation from families of employees that may die of COVID-19.

“We may also be exposed to legal proceedings arising out of the coronavirus(COVID-19)pandemic, including the potential for wrongful death actions brought on behalf of employees that contracted coronavirus(COVID-19),” the company noted.

The company didn’t set a date or price for the offering. Last week, company CEO Vivek Sankaran said the company continued to watch for the right time.

“We will be watching the markets to determine the timing for our initial public offering,” Sankaran said.

Don Day - BoiseDev Editor
Don is the founder and publisher of BoiseDev. He is a National Edward R. Murrow Award winner and a Stanford University John S. Knight Fellow. Contact him at don@boisedev.com.

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