Albertsons Companies posted better-than-expected third-quarter results as online and pandemic-driven sales gave a boost to the grocer’s top and bottom lines.
The company, whose banners include Albertsons, Safeway, Shaw’s, Acme and others, reported that its revenue rose 9.2% to $15.41 billion, topping analysts’ estimates of $15.37 billion, in the quarter ended Dec. 5 compared to the year-ago period. Same-store sales increased 12.3%.
Digital sales surged 225%. It was Albertsons’ third consecutive quarter of 200%-plus online growth.
“We firmly believe some consumer behaviors adopted during the pandemic will continue post-pandemic, and we believe increased use of digital offerings will be one of the key behaviors that sticks," Vivek Sankaran, president & CEO, Albertsons, said during the company’s earnings call. “To capitalize on this trend, we are investing over $300 million in capex and opex to accelerate our offerings in this area during fiscal year 2020 to launch new capabilities that build on our strengths as well as drive scale and profitability.”
Albertsons posted net income of $123.7 million, or $0.20 per diluted share, compared with $54.8 million, or $0.09 per share, a year ago. Earnings reflected $44.7 million in COVID-related bonus payments to front-line associates and a $285.7 million charge related to the grocer’s withdrawal from the United Food and Commercial Workers International Union-Industry Pension Fund.
Adjusted earnings were $0.66 per share, up 175% from the same period last year and easily topping Street estimates of $0.42 per share.
“Our constant focus on our customers continued to drive strong growth and market share gains in the third quarter," stated Sankaran in a release. "It is clear that our strategy is working, and as we continue to execute on our strategic priorities, we believe we are well-positioned to deliver sustainable growth over the long term. At the same time, we remain focused on delivering value to all stakeholders, including taking care of our customers, associates and the communities we serve as we continue to navigate through the pandemic."
To support its surging online grocery sales, Albertsons continues to roll out its curbside pickup service, which saw 800%-plus sales growth in the third quarter amid 231 new pickup sites. The service is now available at 1,181 stores. The company expects to have 1,400 curbside locations by the 2020 fiscal year-end and more than 1,800 sites in fiscal 2021.
During the first 40 weeks of fiscal 2020, Albertsons spent approximately $1.1 billion in capital expenditures, which included accelerated investment in digital and technology initiatives, and the completion of 225 store remodels.
Last week, Albertsons announced it was the first American grocer to o let customers pick up online grocery orders at a contactless kiosk. The company’s Jewel-Osco banner is piloting an automated, temperature-controlled kiosk from pickup solutions provider Cleveron at a Chicago store
Albertsons ended the third quarter with 2,253 food and drug stores in 34 states and the District of Columbia, including such retail banners as Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen and Carrs.