Albertsons Companies Inc - Class A
Q3 2024 Earnings
Did ACI Beat Earnings? Q3 2024 Results
Albertsons delivered a mixed third-quarter fiscal 2024 report, clearing the profit bar comfortably while falling just short on sales, as the grocery chain navigated a cautious consumer backdrop and the fallout from its collapsed Kroger merger. Adjusted EPS of $0.71 topped the $0.65 consensus by 10.04%, even as adjusted net income slipped to $420.30 million from $462.30 million a year earlier, reflecting margin pressure and $61.10 million in merger-related costs. Revenue of $18.77 billion rose 1.2% year-over-year, missing the $18.85 billion estimate by 0.38%; a 23% surge in digital sales and 2.0% identical-sales growth were partly offset by lower fuel revenue and a mix shift toward lower-margin pharmacy. With the Kroger deal now dead and litigation over a $600.00 million termination fee ongoing, Albertsons is pivoting toward a $2.00 billion buyback, a 25% dividend increase, and a three-year, $1.50 billion cost-reduction plan that includes optimizing its store portfolio. Management raised the low end of full-year adjusted EPS guidance to $2.25-$2.31, signaling cautious confidence in the standalone strategy ahead.
- Identical sales increased 2.0%, primarily driven by strong pharmacy sales growth
- Digital sales increased 23%
- Loyalty members grew 15% to 44.3 million
- Productivity initiatives partially offset gross margin and SGA pressures
- Lower interest expense due to reduced average outstanding borrowings
- $81.0 million discrete state income tax benefits from audit settlements reduced effective tax rate to 3.5%
“We delivered solid operating and financial performance in the third quarter of fiscal 2024 in an environment where the consumer remains cautious. 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. 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.”
Albertsons CEO, on the earnings call
Forward Guidance & Outlook
For fiscal 2024, the company updated its outlook: identical sales growth of 1.8%–2.0% (narrowed from 1.8%–2.2%), Adjusted EBITDA of $3.95 billion–$3.99 billion (raised from $3.90 billion–$3.98 billion), adjusted net income per share of $2.25–$2.31 (raised from $2.20–$2.30), effective income tax rate of 15%–16% (reduced from 23% reflecting $81.0 million of discrete state income tax benefits), and capital expenditures of $1.8 billion–$1.9 billion (unchanged).
ACI YoY Financials
Figures from SEC filings and company reports. Not investment advice.