Albertsons tops Street amid strong pharmacy growth; new CEO takes over on May 1
Albertsons Companies reported better-than-expected earnings and revenue for its fourth quarter but a disappointing outlook as the company readies for a change in leadership.
Susan Morris, who has served as the grocer’s COO since 2018, will take the reins of the company on May 1, when current CEO Vivek Sankaran is set to retire.
“I am delighted that the board of directors has selected Susan Morris to succeed me as CEO,” stated Sankaran. “Under Susan's leadership, I have the utmost confidence that she and the entire team will continue to drive future growth and continue to elevate our role with our customers and our communities.”
Sankaran said the year ended with “positive momentum” as Albertsons continues to invest in its “Customers for Life” strategy. He sounded an equally positive note on the company’s earnings call.
“Within a few months since the termination of the merger, our mojo is back,” Sankaran said.
In December, Albertsons called off its proposed $25 billion merger with The Kroger Co. the day after a judge temporarily blocked the deal.
Fourth Quarter
Albertsons’ net income totaled $171.8 million, or $0.29 a share, for the quarter ended Feb. 22, down from $250.5 million, or $0.43 a share, in the year-ago period. Adjusted earnings were $0.46 a share, topping anlyasts estimates of $0.41 a share.
Net sales and other revenue rose to $18.8 billion from $18.3 billion. The increase was fueled by a 2.3% increase in same-store sales, with strong growth in pharmacy sales being the primary driver of the identical sales increase.
Digital sales increased 24% during the quarter and currently accounts for more than 8% of grocery revenue. Pharmacy revenue grew by 18% amid growth in prescriptions and immunizations.
“As we look forward to fiscal 2025 and beyond, we are excited about the investments we have made in our core business, including the growth opportunity inherent in our digital platforms working together to generate deeper engagement, increased digital inventory and acceleration of growth in the Albertsons Media Collective,” stated incoming CEO Morris.
Albertsons now expects fiscal 2025 adjusted earnings to range from $2.03 to $2.16 a share, below what analysts were forecasting. Same-store sales are expected to grow 1.5% to 2.5%. Analysts were expecting a 1.8% rise.
Morris said that fiscal 2025 will be an “investment year” for the company.
"Beginning in fiscal 2026, we expect to drive growth consistent with our long-term algorithm of 2+% identical sales and Adjusted EBITDA growth higher than identical sales growth,” she added.
As of Feb. 22, 2025, Albertsons operated 2,270 retail stores with 1,728 in-store pharmacies, 405 associated fuel centers, 22 dedicated distribution centers and 19 manufacturing facilities.
