Albertsons Cos. Raises Full-Year Guidance
Given the anomaly of 2020, grocers are evaluating performance on both a one-year-and two-year basis. In its first quarter financial results released today, Albertsons Cos., Inc. reported a drop-off in sales from last year but sales growth compared to pre-pandemic 2019.
According to the report, sales and other revenue for Albertsons reached $21.3 billion for the first fiscal quarter ending June 19. That stacks up against $22.8 billion for the same period in 2020 and $18.7 billion during the first quarter of fiscal 2019. On a two-year stacked basis, then, identical sales were up 16.5%.
Gross profit margin dipped slightly, down from 29.8% in Q1 2020 to 29.1% in Q1 2021. For the first quarter of 2019, gross profit margin was 28%. Albertsons attributed an increase in gross profit margin of 10 basis points to higher pharmacy margins amid the administration of COVID-19 vaccines, productivity initiatives related to the optimization of promotions and growth in the company’s Own Brands’ penetration.
Other notable results for first quarter included an adjusted EBITDA of $1,308 million, or 6.2% of sales, compared to $1,691 million during the first quarter of 2020. Digital sales continue to climb, with a 276% increase on a two-year stacked basis.
"We had a strong start to the year as we continued to execute our strategy," said Vivek Sankaran, president and CEO. "Our performance is clear evidence of the structural enhancements we have made to our business, as well as our ability to retain market share gains compared to pre-pandemic levels. We are closer to our customers than ever before, and are well positioned for continued success as we execute on our strategic priorities, leveraging our strengths in fresh, Own Brands and our accelerating digital transformation."
On that note, investments in digital and technology comprised part of the company’s $513.4 million in capital expenditures during the first 16 weeks of its current fiscal year. Albertsons also opened five new stores and completed 33 store remodels in that time frame.
Looking ahead, the retailer revised its outlook for the rest of FY 2021, guiding for an identical sales decline in the range of 5 to 6%, up from the previous guidance for a decline of 6 to 7.5% and adjusted EPS of $2.20 to $2.30, up from previous guidance for $1.95 to $2.05.
Boise, Idaho-based Albertsons operates 2,277 retail stores with 1,725 pharmacies, 400 associated fuel centers, 22 dedicated distribution centers and 20 manufacturing facilities. The company’s stores predominantly operate under the Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw’s, Star Market, United Supermarkets, Kings Food Markets and Haggen banners. Albertsons is No. 8 on The PG 100, Progressive Grocer’s 2021 list of the top food and consumables retailers in North America.
