Albertsons CEO Vivek Sankaran credits gains in Q4 and FY22 to investments in digital and store experience.
Albertsons Cos. is sharing its financial report for the fourth quarter and full fiscal year 2022, which CEO Vivek Sankaran says was fueled by investments in digitally connecting and engaging customers, differentiating its store experience, modernizing operational capabilities, and other initiatives.
For the fourth quarter ended Feb. 25, Albertsons’ net sales and other revenue was $18.3 billion, compared to $17.4 billion year-over-year. The increase was driven by a 5.6% increase in identical sales, spurred on by retail price inflation, growth in pharmacy and increasing digital penetration.
Also in Q4, digital sales increased 16%, loyalty members increased 15% to more than 34 million, net income was $311 million, or $0.54 per share, and adjusted EBITDA of $1,050 million. Gross margin rate decreased year-over-year to 27.8% from 28.7%, with the pharmacy business and decrease in COVID-19 vaccinations driving approximately half of the rate decrease.
As for FY22, Albertsons saw identical sales increase 6.9%, digital sales increase 28%, and an adjusted EBITDA of $4,677 million. Net income was $1,514 million, or $2.27 per share, and adjusted net income was $1,965 million, or $3.37 per share.
"We are pleased with our fourth quarter financial results and the suite of capabilities we continue to build in our business," said Sankaran. "We want to thank all our teams for their commitment to bringing people together around the joys of food and inspiring well-being, and for serving our customers and communities."
Continued Sankaran: “These results, and our results for fiscal 2022 overall, were fueled by the rollout of our Customers for Life transformation strategy, which places the customer at the center of everything we do, with the ultimate goal of supporting them every day, every week, and for a lifetime. Against this backdrop, throughout the year, we invested in the following initiatives: digitally connecting and engaging our customers through a frictionless omnichannel experience, differentiating our store experience, enhancing what we offer and where we offer it, modernizing our operational capabilities, and further embedding ESG throughout our operations."
During FY22, Albertsons’ capital expenditures totaled $2,153.9 million, including investments in digital and technology platforms, 173 store remodels and the opening of five new stores.
While Sankaran believes the grocer is well positioned for top-line growth in FY23, the CEO is preparing for an uncertain, and possibly challenging, economic backdrop.
"We have prepared our business for a more difficult consumer environment, and are expecting significant labor investments and inflationary cost increases,” Sankaran said. “Additionally, we expect further declines in COVID-19 vaccination and at-home test kit revenue. These headwinds are expected to be partially offset by the ongoing growth in our core business and the benefits from the next phase of our productivity initiatives."
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 19 manufacturing facilities. It has stores across 34 states and the District of Columbia under 24 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.