Retailer reported market share gains in quarter
BOISE, Idaho — Albertsons Cos. reported top and bottom line gains for its fiscal first quarter, and raised its outlook for the year.
The company said Tuesday that identical sales increased 6.8% for the quarter, which ended June 18. Digital sales increased 28%, and net income increased about 8.1%, to $484.2 million, or $0.84 per share. Adjusted net income was $582 million, or $1.00 per share.
“In the first quarter, our teams continued to deliver strong operating and financial performance across all key metrics, and we continued to gain market share,” Albertsons CEO Vivek Sankaran said. “As we look forward to the balance of the year, while we are thoughtful about the macro environment and the possible implications on consumer behavior, our teams have consistently demonstrated their ability to adapt to a changing back drop in real time. This puts us in a strong position to continue to execute against our Customers for Life strategy, including more deeply engaging our customers both digitally and in-store and delivering against our productivity agenda. We are so proud of the resilience, agility and passion of our teams and their ongoing service to our customers and communities.”
The company has provided an updated fiscal 2022 outlook and now expects:
- Identical sales in fiscal 2022 of approximately 3% to 4% (previously 2% to 3%)
- Adjusted EBITDA in the range of $4.25 billion to $4.35 billion (previously $4.15 billion to $4.25 billion)
- Adjusted net income per share in the range of $2.80 to $2.95 per share (previously $2.70 to $2.85 per share)
- Effective tax rate in the range of 23% to 24% excluding discrete items (unchanged)
- Capital expenditures in the range of $2.0 billion to $2.1 billion (unchanged)
Albertsons said that capital expenditures during the first quarter were $613.8 million, most of which involved building out the company’s digital and technology platforms and investing in the modernization of its store fleet, including 27 remodels. The company also paid a quarterly dividend of $0.12 per share of common stock on May 10 to stockholders of record as of April 26. The company said on July 14 that its next quarterly dividend of $0.12 per share of Class A common stock will be payable on August 10 to stockholders of record as of July 26.
The company also provided an update on its board-led review of potential strategic alternatives to enhance growth and maximize stockholder value. Albertsons has engaged a third party to review the value of its real estate portfolio, and noted that the the total value of company-owned and ground-leased properties has increased approximately $2.5 billion to $13.7 billion, up from $11.2 billion in 2019.
Albertsons said it has also entered into an extended lock-up agreement involving five of its largest stockholders, under which those investors have agreed to some restrictions on their ability to sell off shares before the end of the second quarter.
“The board has not set a timetable for the conclusion of its Strategic Alternatives Review, nor has it made any decisions related to any further actions or potential strategic alternatives at this time,” the company stated, adding that “there can be no assurance that the Strategic Alternatives Review will result in any transaction or other strategic change or outcome.”