Holding firm despite a difficult retail environment in its fourth quarter of fiscal 2021, which ended Feb. 26, Albertsons Cos. reported that identical sales increased 7.5%, while on a two-year stacked basis, identical sales growth was 19.3%, and that digital sales grew 5%, while on a two-year stacked basis, digital sales growth was 287%. Net income was $455 million, or 79 cents per share; adjusted net income was $437 million, or 75 cents per share, and adjusted EBITDA was $1,074 million.
For fiscal 2021, the grocer revealed that identical sales dipped 0.1%, while on a two-year stacked basis identical sales growth was 16.8%, and that digital sales grew 5%, while on a two-year stacked basis, digital sales growth was 263%. Net income was $1,620 million, or $2.70 per share; adjusted net income was $1,781 million, or $3.07 per share; and adjusted EBITDA was $4,398 million.
“We are pleased with our fourth-quarter and full-year 2021 results and the continuing momentum we are seeing as we enter 2022,” noted Albertsons CEO Vivek Sankaran. “Our strategy is working, and we are executing well against industry-wide pressures. We want to recognize and thank all of our retail, distribution and manufacturing teams for their commitment to and care of our customers and their communities.”
Q4 net sales and other revenue at Albertsons was $17.4 billion during the 12 weeks ended Feb. 26, compared with $15.8 billion during the year-ago period. According to the company, the increase was attributable to its 7.5% increase in identical sales and higher fuel sales, with retail price inflation contributing to the identical sales increase.
Albertsons’ gross margin rate fell to 28.7% during the fourth quarter of fiscal 2021 versus the year-ago period. Excluding the impact of fuel, the gross margin rate was flat compared with the fourth quarter of fiscal 2020, which the grocer attributed to productivity initiatives, improved pharmacy margins related to administering COVID-19 vaccines, and favorable product mix, offset by lower gross margin rates across certain product categories because of the rate impact of increased product costs, higher supply chain costs and an increase in LIFO expense, all driven by the current inflationary environment.
During fiscal 2021, capital expenditures came to $1,606.5 million, which primarily included investments in the modernization of Albertsons’ stores, including 236 remodels and the opening of 10 new locations, as well as the building of digital and technology platforms.
The company also provided its fiscal 2022 outlook, including identical sales of approximately 2% to 3%, adjusted EBITDA in the range of $4.15 billion to $4.25 billion, adjusted net income per share in the range of $2.70 to $2.85 per share, and capital expenditures in the range of $2.0 billion to $2.1 billion.
In February, Albertsons’ board of directors began a review of potential strategic alternatives aimed at enhancing the company’s growth and maximizing shareholder value. The review includes an assessment of various balance sheet optimization and capital return strategies, potential strategic or financial transactions, and development of other strategic initiatives to complement existing businesses. Albertsons also said that it will be “responding to inquiries,” a signal that it may be entertaining a sale or an acquisition. There’s no timetable set for the conclusion of the review, and the board hasn’t made any decisions yet related to further actions or potential strategic alternatives.
Boise, Idaho-based Albertsons operates more than 2,270 retail stores with 1,720-plus pharmacies, 400-plus associated fuel centers, 22 dedicated distribution centers and 20 manufacturing facilities. It operates stores across 34 states and the District of Columbia under more than 20 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. 8 on The PG 100, Progressive Grocer’s 2021 list of the top food and consumables retailers in North America