Albertsons beats Street on Q2 profit; pulls guidance, to review business
Albertsons Cos. is suspending its full-year guidance and launching a comprehensive business review in the wake of declining net income and sales.
During the second quarter of fiscal 2026, Albertsons reported a 69% year-over-year reduction in its net income to $51.5 million from $168.5 million. Retail store impairment losses and disposals of equipment, higher interest expenses and lower identical sales helped drive the reduction in net income. Earnings per share totaled $0.36, ahead of Wall Street projections of $0.33 per share.
Sales slightly dropped from $18.99 billion in the prior-year quarter to $18.92 billion, meeting analyst estimates. Identical sales declined 0.8% from the second quarter of fiscal 2025, but digital sales increased 11% and pharmacy and fuel sales also showed year-over-year growth.
Business review
In July, as it scaled back its full-year outlook after ongoing softness in its core grocery business took a toll on its first quarter results, Albertsons launched a program it calls “ACI Edge.” The initiative includes the consolidation of 11 divisions into four regions under a new regional operating model, with a focus on strengthening its connections with customers, supporting stores and driving results within communities.
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In its second quarter earnings release, the company said it views ACI Edge as the “first step in a broader turnaround aimed at improving operating performance, strengthening competitiveness and creating greater long-term shareholder value.”
Albertsons is now reviewing its customer strategy, cost structure, operating model, portfolio of banners, markets assets and businesses, and capital allocation priorities and is no longer providing fiscal 2026 guidance. The grocer said it will not provide an updated outlook until the comprehensive business review is completed during its fourth quarter. Albertsons expects to provide a refreshed financial framework, both short and long-term, along with its comprehensive turnaround plan by its fourth quarter earnings call in spring 2027.
"Although our second quarter performance was in-line with the expectations in our revised outlook, our results do not reflect the potential of the company," said Susan Morris, CEO of Albertsons. "We are launching a comprehensive business review to speed up improvements in Albertsons' performance and tackle even harder a cost structure we can no longer afford. Our work will find opportunities to simplify the organization, improve decision-making, reinvest savings in customer value, and boost long-term shareholder returns."
As of Sept. 12, Boise-based Albertsons operated 2,240 retail stores with 1,709 in-store pharmacies, 408 associated fuel centers, 22 dedicated distribution centers and 19 manufacturing facilities. The company operates stores across 35 states and the District of Columbia under 22 banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs, Kings Food Markets and Balducci's Food Lovers Market.
