Albertsons Outgoing CEO Sees 'Positive Momentum' in Q4, Fiscal 2024
Albertsons Cos. Inc. has reported gains for its fourth quarter of fiscal 2024 and full year fiscal 2024, which ended Feb. 22. For Q4, identical sales increased 2.3%, digital sales jumped 24% and loyalty members rose 15% to 45.6 million. Meanwhile, net income was $172 million, or 29 cents per share; adjusted net income was $270 million, or 46 cents per share; and adjusted EBITDA was $855 million. In the year-ago period, net income was $250.5 million or 43 cents per share; adjusted net income was $318.0 million, or 54 cents per share; adjusted EBITDA was $915.8 million.
For fiscal 2024, identical sales increased 2.0% and digital sales grew 24%, while net income was $959 million, or $1.64 per share; adjusted net income was $1,382 million, or $2.34 per share; and adjusted EBITDA was $4,005 million.
“We delivered solid results in the fourth quarter and closed fiscal 2024 with positive momentum as we continued to invest in our Customers for Life strategy,” noted Albertsons CEO Vivek Sankaran. “This strategy has firmly positioned the company for its next chapter of growth and value creation for shareholders. As previously announced, I am retiring as of May 1, 2025, and am delighted that the board of directors has selected [current COO] Susan Morris to succeed me as CEO. 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.”
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“I am thrilled to be taking the helm of our company during this transformational time in our Customers for Life strategy,” said Morris. “None of this would be possible without the support of our 285,000 associates who work tirelessly to make it all happen.”
She added: “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. While fiscal 2025 will be an investment year, beginning in fiscal 2026, we expect to drive growth consistent with our long-term algorithm of 2%-plus identical sales and adjusted EBITDA growth higher than identical-sales growth.”
Net sales and other revenue came to $18.8 billion for the 12 weeks ended Feb. 22, compared with $18.3 billion during the 12 weeks ended Feb. 24, 2024. Albertsons attributed the increase to the 2.3% rise in identical sales, with strong pharmacy sales the main driver of the identical-sales growth.
The gross margin rate decreased to 27.4% during Q4 of fiscal 2024 versus 28.0% during the year-ago period. Excluding the impact of fuel and LIFO, gross margin rate declined 45 basis points compared with the fourth quarter of fiscal 2023. The robust pharmacy sales growth, which carries an overall lower gross margin rate, and higher delivery and handling costs related to the 24% growth in digital sales were the main reasons for the decrease, according to Albertsons. In Q4 of fiscal 2024, the grocer also made incremental investments in its customer value proposition funded by the benefits from its productivity initiatives, among them shrink expense reductions.
During fiscal 2024, Albertsons’ capital expenditures were $1,931.2 million, which mainly included the completion of 127 remodels, the opening of 11 new stores and continued investment in digital and technology platforms.
The company also issued the following fiscal 2025 outlook:
- Identical sales growth in the range of 1.5% to 2.5%
- Adjusted EBITDA in the range of $3.8 billion to $3.9 billion, including about $65 million related to the company’s 53rd week
- Adjusted net income per Class A common share in the range of $2.03 to $2.16 per share, including about 3 cents per share related to the company’s 53rd week
- An effective income tax rate in the range of 23.5% to 24.5%
- Capital ex in the range of $1.7 billion to $1.9 billion
As of Feb. 22, Albertsons Cos. operated 2,270 retail food and drug stores with 1,728 pharmacies, 405 associated fuel centers, 22 dedicated distribution centers and 19 manufacturing facilities. The Boise, Idaho-based company operates stores across 34 states and the District of Columbia under more than 20 well-known banners. Albertsons is No. 9 on The PG 100, Progressive Grocer’s 2024 list of top food and consumables retailers in North America. PG also named the company one of its Retailers of the Century.
