Albertsons reports 'solid operating' results for Q2
Albertsons Companies beat profit estimates for its second quarter and said it expects food inflation to decline.
The grocery conglomerate, which is seeking to merge with Kroger Co., reported adjusted net income of $367.7 million, or $0.63 per share, for the quarter ended Sept.9, down 12% from $418.3 million, or $0.72 per share, during the second quarter of fiscal 2022. However, Albertsons still exceeded Wall Street analyst predictions for second quarter EPS of $0.56 per share.
Net sales and other revenue totaled $18.3 billion, up 2% from $17.9 billion during the prior-year period. The increase was driven by the company's 2.9% increase in identical sales, with a 19% increase in digital sales, and retail price inflation across most categories being the primary contributors to the identical sales increase. The increase in net sales and other revenue was partially offset by lower fuel sales.
"During the second quarter, we continued to execute against our Customers for Life transformation strategy and drive solid operating results, despite increasing macro-economic headwinds,” said Vivek Sankaran, CEO, Albertsons Companies. "We are also mindful of a more challenging economic backdrop, including declining federal and state government assistance and higher interest rates, and their effects on consumer spending and our business."
“We also expect slowing food inflation, ongoing labor investment, broad inflationary cost increases and significant declines in COVID-19 vaccination and test kit revenue," Sankaran added “We continue to partially offset these headwinds with the benefits of our productivity initiatives."
Albertsons continues working toward Kroger merger
The Kroger Co. and Albertsons Companies Inc. are offloading some stores and distribution centers in connection with their proposed merger. The two supermarket giants have entered into an agreement to sell 413 and eight distribution centers across 17 states to C&S Wholesale Grocers LLC for $1.9 billion in cash as part of the plan to gain regulatory approval of Kroger’s planned acquisition of Albertsons, which was announced in October 2022. The deal also includes two offices and five private label brands.
As of Sept. 9, 2023, Boise, Idaho-based Albertsons Companies Inc. operated 2,272 retail food and drug stores with 1,726 pharmacies, 401 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.