Albertsons Lowers Sales and Profit Projections
Albertsons announced on Thursday that it has adjusted its sales and profit outlook for fiscal 2026, citing weaker grocery demand and a cautious consumer base impacting first-quarter results.
The grocery chain now anticipates a decline in full-year like-for-like sales by 0.5% to 1.5%, a shift from its earlier estimate which suggested flat sales to a 1% growth.
The company revised its adjusted earnings forecast as well, lowering it to a range of $1.75 to $1.85 per share, down from the previous range of $2.22 to $2.32. Additionally, adjusted EBITDA is now projected to be between $3.55 billion and $3.625 billion, compared to the earlier estimate of $3.85 billion to $3.925 billion.
In the quarter ending June 20, sales decreased by 0.8%. However, net sales and other income increased by 0.2% to $24.94 billion largely due to higher fuel sales. Digital sales grew by 13%, yet Albertsons noted that its core grocery business has been facing mounting challenges from declining industry trends.
“While our digital and pharmacy sectors saw strong growth in the first quarter, our grocery stores are under pressure from softer trends and a more cautious consumer,” said Chief Executive Officer Susan Morris during an earnings call.
Albertsons is moving forward with investments aimed at enhancing customer value and improving shopping experiences, even before productivity gains are expected to materialize. Morris expressed, “We think by accelerating these investments now, we’ll improve our growth trajectory, bolster our competitiveness, and create long-term shareholder value.”
As part of this strategy, the company announced a restructuring initiative dubbed ACI Edge. This overhaul consolidates its 11 divisions into four regions and centralizes center store merchandising under a single enterprise team.
The goal of the reorganization is to speed up decision-making, enhance local execution, and streamline category management, supplier relations, and merchandising strategies within a more centralized framework.
Net income for the first quarter was reported at $84.7 million, translating to 17 cents per share, a decline from $236.4 million, or 41 cents per share, during the same time last year. Adjusted earnings dropped to 42 cents per share from 55 cents.
Meanwhile, the gross profit margin decreased from 27.1% to 26.6%. Albertsons pointed to rising fuel expenses alongside increased shipping and handling costs due to the growth of their digital operations as contributing factors to this decline.
In related news, the company announced that Chief Financial Officer Sharon McCollum will retire later this year. McCollum will stay in her position until a successor is found and will then serve as an advisor until February 27, 2027, to help with the transition.
As of June 20, Albertsons operates 2,240 stores across 35 states and the District of Columbia.
