Albertsons posts strong Q1; review pegs real estate value at $13.7 billion

Albertsons Cos. Inc. reported fiscal first quarter earnings that beat expectations and raised its full-year guidance.

Earlier this year,  the supermarket company entered into a review of possible strategic alternatives to enhance growth and stockholder value.

As part of the review, Albertsons engaged a third party to review the value of its real estate portfolio. Based on the completion of appraisal, the total value of company-owned and ground-leased properties has increased approximately $2.5 billion to $13.7 billion, up from $11.2 billion in 2019.

“The board has not set a timetable for the conclusion of the strategic alternatives review, nor has it made any decisions related to any further actions or potential strategic alternatives at this time,” Albertsons stated in its fiscal first-quarter report.

Net income totaled $484.2 million, or $0.84  per share, for the quarter ended June 18, up from $444.8 million, or $0.78 per share, in the year-ago period. Adjusted EPS of $1 per share beat estimates for $0.96.

Revenue rose to  $23.310 billion from $21.269 billion, topping estimates for $22.997 billion. The increase was driven by a 6.8% increase in identical sales and higher fuel sales, with price inflation contributing to the identical sales increase, the company said.

Digital sales increased 28%.

"In the first quarter, our teams continued to deliver strong operating and financial performance across all key metrics, and we continued to gain market share," said Vivek Sankaran, CEO. "As we look forward to the balance of the year, while we are thoughtful about the macro environment and the possible implications on consumer behavior, our teams have consistently demonstrated their ability to adapt to a changing back drop in real time.”

Albertsons now expects fiscal 2022 identical sales to rise 3% to 4%, up from its previous guidance calling for 2% to 3% growth. Adjusted EPS is now expected to be in the range of $2.80 to $2.95, up from previous guidance of $2.70 to $2.85.  

As of June 18, 2022, Albertsons operated 2,273 retail food and drug stores with 1,720 pharmacies, 402 associated fuel centers, 22 dedicated distribution centers and 19 manufacturing facilities. The Company operates stores across 34 states and the District of Columbia with 24 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.

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