Albertsons Beats Estimates on 12.3% Q3 Comps

Albertsons Cos. this morning reported comp sales, EBITDA and earnings for its fiscal third quarter in excess of optimistic Wall Street projections as it continues to ride momentum from pandemic shopping trends and investment in digital capabilities.

The Boise, Idaho-based retailer said sales for the period, which ended Dec. 5, increased by 9.2% to $15.4 billion, with sam-store sales increasing by 12.3%, powered by a 225% increase in digital sales. Gross-profit margins increased to 29.3% of sales from 28.3% in the same period last year, driven by improvements in shrink expense and sales leverage on its advertising and supply chain costs, partially offset by promotion spending and expenses related to digital investments.

Net income was $123.7 million during the quarter, compared to $54.8 million last year and included a $213 million charge related to its previously disclosed withdrawal from the UFCW National Pension Fund.

Adjusted net income was $386.6 million, or 66 cents per share, compared to $142.2 million, or 24 cents per share, during the third quarter of fiscal 2019.

Adjusted EBITDA was $967.7 million, or 6.3% of sales, up from $634.4 million, or 4.5% of sales, in last year’s third quarter. The increase in adjusted EBITDA was primarily attributable to the identical sales gain and improved sales leverage.

“Our constant focus on our customers continued to drive strong growth and market share gains in the third quarter,” said Vivek Sankaran, president and CEO, in a statement. “It is clear that our strategy is working, and as we continue to execute on our strategic priorities, we believe we are well-positioned to deliver sustainable growth over the long term. At the same time, we remain focused on delivering value to all stakeholders, including taking care of our customers, associates and the communities we serve as we continue to navigate through the pandemic.”

Analysts had anticipated that Albertsons would post comps of 10.5% in the period and adjusted earnings per share of 40 cents.

The improved results prompted the company to reset its full-year expectations. Albertsons now says identical sales for its fiscal year are expected at 16.5% (up from 15.5%), and adjusted earnings per share in the range of $3.05-$3.15 (up from $2.75-$2.85).