Advertisement
07/26/2022

Albertsons Cos. Sees Strong Q1, Raises 2022 Outlook

CEO Vivek Sankaran said grocer gained market share during the quarter
Emily Crowe
Multimedia Editor
Emily Crowe profile picture
Image
Albertsons Co. Opts for Procurant Perishables Order Management
Thanks to strong Q1 numbers, Albertsons is raising its guidance for the remainder of fiscal 2022.

Albertsons Cos., Inc., is reporting strong first quarter fiscal 2022 results for the period ending June 18. The retailer saw a 6.8% increase in identical sales and a 28% increase in digital sales compared to the first quarter of fiscal 2021, as well as net income of $484 million and adjusted net income of $582 million.

Net sales and other revenue was $23.3 billion for the reporting period, up from $21.3 billion during the 16 weeks ended June 19, 2021. The company’s 6.8% increase in identical sales and overall higher fuel sales helped account for the increase. Adjusted EBITDA for the quarter was $1,420 million, equivalent to 6.1% of net sales and other revenue.

"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, Albertsons 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.

“This puts us in a strong position to continue to execute against our Customers for Life strategy, including more deeply engaging our customers both digitally and in-store and delivering against our productivity agenda,” Sankaran continued. “We are so proud of the resilience, agility and passion of our teams and their ongoing service to our customers and communities."

Selling and administrative expenses represented 25.2% of net sales and other revenue, compared to 25.9% in first quarter last year. This decrease was attributable to lower pandemic-related expenses and the execution of productivity initiatives. An increase in employee costs was the result of wage increases and higher equity-based compensation expenses.

Capital expenditures were $613.8 million for the quarter, including major investments in digital and technology platforms, as well as a focus on store modernization to include 27 remodels.

The company’s fiscal results have prompted it to raise its 2022 outlook, including identical sales of approximately 3% to 4%, up from 2% to 3%, and adjusted EBITDA in the range of $4.25 billion to $4.35 billion, previously $4.15 billion to $4.25 billion.

Earlier this year, Albertsons launched a review of potential strategic alternatives to enhance its growth and stockholder value. According to its fiscal report, a third-party review into the value of its real estate portfolio shows the total value of company-owned and ground-leased properties has increased about $2.5 billion to $13.7 billion, up from $11.2 billion in 2019.

The fiscal report further states that, “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. There can be no assurance that the Strategic Alternatives Review will result in any transaction or other strategic change or outcome.”

Boise, Idaho-based Albertsons operates more than 2,200 retail stores with 1,700-plus pharmacies, 402 associated fuel centers, 22 dedicated distribution centers and 20 manufacturing facilities. It operates stores across 34 states and the District of Columbia under 24 well-known banners, among them 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. Albertsons is No. 9 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America.

Also Worth Reading