Albertsons Posts Solid Q3 Following Merger Fallout
Albertsons Cos. is moving onward and upward after its proposed $24.6 billion merger with The Kroger Co. fell apart last month. According to Albertsons CEO Vivek Sankaran, the company never stopped investing in its business or driving its Customers for Life strategy during the two years it was tied up with Kroger.
As for its third quarter of fiscal year 2024 financials, Albertsons saw net sales and other revenue increase 1.2% to $18,774.5 million for the 12 weeks ended Nov. 30, driven by a 2% rise in identical sales. The company said growth in pharmacy sales helped increase identical sales.
Digital sales during the quarter increased 23% during Q3, while loyalty members increased 15% to 44.3 million.
"We delivered solid operating and financial performance in the third quarter of fiscal 2024 in an environment where the consumer remains cautious," said Sankaran. "Investments in our Customers for Life strategy drove increased digital engagement across our platforms, evidenced by strong growth in our digital sales, pharmacy operations, and membership in our loyalty program.”
Continued Sankaran: “We want to thank our teams for their ongoing commitment to serving our customers and supporting the communities in which we operate, especially during the holiday season."
Additionally, Albertsons saw net income of $401 million, or $0.69 per share, during Q3, and adjusted net income of $420 million, or $0.71 per share. Its adjusted EBITDA was $1,065.1 million, or 5.7% of net sales and other revenue.
Capital expenditures during the first 40 weeks of FY24 totaled $1,446.7 million, and accounted for 84 remodels, nine new store openings and investment in digital and technology platforms.
"As we look ahead to the balance of fiscal 2024 and beyond, we are energized about our plans to accelerate growth through our Customers for Life strategy, leveraging investments to enhance digital engagement and omnichannel revenue growth, improve our value proposition with customers, and drive digital media growth,” Sankaran said. “At the same time, we expect our robust productivity agenda to provide fuel to invest in the business. We look forward to driving growth and providing value to our customers and returns to our stockholders."
Albertsons has slightly updated its guidance for the remainder of FY24, reporting expected identical sales growth in the range of 1.8% to 2.0% (previously 1.8% to 2.2%), and adjusted EBITDA in the range of $3.95 billion to $3.99 billion (previously $3.90 billion to $3.98 billion).
As of Nov. 30, Albertsons Cos. operated 2,273 retail food and drug stores with 1,732 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 the top food and consumables retailers in North America.
