Identical store sales were up 47% in March
Albertsons reported its first quarter sales-to-date as part of an announcement of its fiscal 2019 fourth quarter and full year results. For fiscal 2019 the company reported identical sales growth of 2.1%, digital sales growth of 39%, net income of $466 million and adjusted EBITDA of $2.83 billion.
“We are pleased that our momentum continued as we closed fiscal 2019, with improved performance on the top and bottom line,” Albertsons president and
CEO Vivek Sankaran said in a statement. “However, the world has changed since then, and we are heavily focused on supporting our associates, our customers and the communities we serve as we respond to the increased demand resulting from the COVID-19 pandemic.
“We are so proud of the efforts of our store, distribution and manufacturing teams, whose work has been heroic in the face of this crisis, and we thank them for everything they continue to do. Both our stores and our online business are seeing significantly increased demand as consumers shift to more food-at-home.”
Sales and other revenue totaled $15.4 billion for the 13 weeks ended February 29. That’s a 10.1% increase compared to the 12-week prior year period, and the company said the sales increase was mainly due to the extra week in this year’s quarter, which accounted for about $1.1 billion of the gain. Albertsons also posted a 1.8% increase in identical sales for the quarter, which was partially offset by a reduction in sales related to store closures. That 1.8% increase in identical sales was negatively impacted by the timing of 2019’s Thanksgiving holiday, which cut about 30 basis points from the increase.
Gross profit margin decreased to 28.6% during the fourth quarter of fiscal 2019 compared to 29.0% during the fourth quarter of fiscal 2018. Excluding the impact of fuel, gross profit margin decreased 20 basis points. The decrease was mainly due to incremental rent expense related to the company’s previously completed sale leaseback transactions of certain distribution centers, selective investments in price and promotions and a less favorable LIFO adjustment compared to the fourth quarter of fiscal 2018.
Selling and administrative expenses decreased to 26.5% of sales during the fourth quarter of fiscal 2019, down from 26.9% of sales in the prior year period. That decline was mainly due to lower depreciation and amortization expense, lower acquisition and integration-related costs, and lower employee-related costs as a percentage of sales, partially offset by investments in strategic digital and technology initiatives and higher rent expense related to previously completed sale leaseback transactions.
Net income was $67.8 million during the fourth quarter of fiscal 2019 compared to net income of $135.6 million during the fourth quarter of fiscal 2018.
Prior to the COVID-19 pandemic, the company’s plan for fiscal 2020 called for identical sales of 2.0%, adjusted EBITDA of $2.875 billion, operating income of $1.3 billion and capital expenditures of $1.5 billion. While it is of course unable to predict the course of the COVID-19 pandemic or what effect that will have on its results, Albertsons said that its sales performance so far in the first quarter of fiscal 2020 suggests it could meet or exceed those goals.
Albertsons finished fiscal 2019 with 2,252 retail stores (1,726 of them with pharmacies), 402 associated fuel centers, 23 dedicated distribution centers and 20 manufacturing facilities.