Albertsons Posts Quarterly and Yearly Revenue Gains

It’s certainly been a noteworthy year for Albertsons Cos., which has spent much of it in the thick of merger plans with The Kroger Co. while also navigating ongoing inflation, higher wages, and shifting consumer habits to steer its business to success. The retailer released its fourth quarter and full year fiscal results that exemplify its non-typical recent history.

First, the bottom line: For the full fiscal year ending Feb. 24, revenue topped $79.2 billion, up from $77.6 billion in fiscal 2023 with an identical sales lift of 3%. Same-store sales rose during the fourth quarter, albeit at a slower pace of 1% in that time frame and propelled by strong growth in pharmacy sales and e-commerce. Fourth quarter revenue figures came in similar to those posted last year, at $18.33 billion versus $18.26 billion in 2023.

In another indicator, adjusted EBITDA was down for the quarter, dropping from $1.05 billion in fiscal 2022 to $915.8 million. On a yearly basis, adjusted EBITDA dipped from $4.6 billion to $4.3 billion. 

Meanwhile, capital expenditures came in at just over $2 billion for the fiscal year. Those costs were due in part to 150 store remodels, the opening of six new stores and ongoing investments in digital and technology platforms, according to Albertsons. 

CEO Vivek Sankaran put the retailer’s performance in the context of the times. "We delivered another solid quarter amidst a difficult industry backdrop," he said. "Again this quarter, we focused on our strategy to create Customers for Life, which drove strong growth in digital and pharmacy, deepened our omnichannel relationships with our customers and improved our in-store experience. We are pleased with our fiscal 2023 financial results, particularly in omnichannel where we have increased our investments in technology, digital and in-store customer experience and supply chain operations. We want to thank all of our teams who continue to deliver on our commitment to serving our customers and communities."

To Sankaran’s point, there is reason for optimism in the omnichannel. Digital sales climbed 24% in the fourth quarter and increased 22% over the course of FY23.

Looking ahead, the CEO anticipates ongoing challenges of higher labor costs, easing-but-elevated inflation, declining COVID-related income and reduced government assistance for shoppers. “We expect these headwinds to be much stronger in the first half of fiscal 2024. These headwinds are expected, however, to be partially offset by ongoing productivity initiatives," he added.

This week, Albertsons and Kroger announced an update to their original merger-related divestiture plan with C&S Wholesale Grocers. The amended deal adds 166 more stores to the count of locations to be acquired by C&S. 

As of Feb. 24, Boise, Idaho-based Albertsons operated 2,269 retail stores with 1,725 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 more than 20 banners. Albertsons is No. 9 on The PG 100, Progressive Grocer’s 2023 list of top food and consumables retailers in North America. PG also named the company one of its Retailers of the Century.