BOISE, Idaho — Albertsons Cos. on Tuesday reported increased sales and earnings for its fiscal 2021 third quarter, which ended December 4.
Identical sales increased 5.2%; on a two-year stacked basis identical sales growth was 17.5%. Digital sales increased 9%; and the gain on a two-year stacked basis was 234%. Net income was $424.5 million, or $0.74 per Class A common share, compared to $123.7 million, or $0.20 per Class A common share, during the third quarter of fiscal 2020.
“We are pleased with our third quarter results as we continue to execute against our transformation strategy,” Albertsons CEO Vivek Sankaran said. “A favorable economic backdrop together with the heroic performance of our frontline retail, distribution, and manufacturing teams contributed to these better-than-expected results. Also driving these results was our continued focus on in-store excellence, acceleration of our digital and omnichannel capabilities, and delivery of our productivity initiatives. During the quarter, we continued to gain market share in both units and dollars and saw ongoing improvement in both the in-store and online customer experience.”
Net sales and other revenue was $16.7 billion during the 12 weeks, compared to $15.4 billion during the prior year period. The increase was driven by the company’s 5.2% increase in identical sales, as well as higher fuel sales and sales related to stores acquired and opened since the third quarter of fiscal 2020. Retail price inflation and incremental sales related to administering COVID-19 vaccines contributed to the 5.2% identical sales increase.
The gross margin rate decreased to 28.9% during the third quarter of fiscal 2021 compared to 29.3% during the third quarter of fiscal 2020. Excluding the impact of fuel, the gross margin rate increased 10 basis points compared to the third quarter of fiscal 2020. The increase in gross margin rate was primarily due to productivity initiatives, improved pharmacy margins related to administering COVID-19 vaccines and favorable product mix, largely offset by lower gross margin rates across certain product categories due to the rate impact of increased product costs driven by the current inflationary environment, as well as higher supply chain costs.
Albertsons has raised its profit forecast for the fiscal year, and now expects adjusted EBITDA in the range of $4.25 billion to $4.30 billion (previously $3.95 billion to $4.05 billion), and adjusted net income per Class A common share in the range of $2.90 to $2.95 per share (previously $2.50 to $2.60 per share).
The company now projects that identical sales in fiscal 2021 will decline by 0.8% to 1.2%, an improvement over the previous projection of a decline of from 2.5% to 3.5%. Two-year stacked growth is now expected to be from 15.7% to 16.1%, up from the previously forecast of a 13.4% to 14.4% gain.