BOISE, Idaho — Albertsons Cos. today reported results for the second quarter of fiscal 2025, which ended September 6.
"In the second quarter, we delivered solid operating and financial results while continuing to invest in our core business and elevate the customer experience," said CEO Susan Morris. "Strong performance against our strategic priorities fueled deeper engagement across our digital platforms, resulting in outsized growth in digital sales, pharmacy, and loyalty membership. Our productivity engine continued to offset inflationary pressures and fund investments in areas that matter most to our customers, including fresh categories and omnichannel convenience."
Morris added, "As we look ahead to the balance of fiscal 2025 and beyond, it is a new day at Albertsons. We're operating from a position of strength, taking bold action, and leading transformative change with confidence. We're investing with purpose, modernizing capabilities through scalable technology, and advancing ongoing productivity initiatives to fuel long-term growth. The $750 million accelerated share repurchase we announced today underscores our conviction in the value of our business and our commitment to delivering shareholder returns."
Net sales and other revenue increased 2.0% for the 12-week period. This increase was driven by a 2.2% increase in identical sales, with strong growth in pharmacy sales being the primary driver of the identical sales increase. The grocery chain continued to grow its digital sales, with a 23% increase during the quarter.
Gross margin rate decreased to 27.0% compared to 27.6% during the second quarter of fiscal 2024. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 63 basis points compared to the second quarter of fiscal 2024. This decrease in gross margin rate was driven by strong growth in pharmacy sales, which carries an overall lower gross margin rate, and increases in delivery and handling costs related to the continued growth in our digital sales.
Net income was $168.5 million during the quarter compared to $145.5 million a year earlier. Adjusted net income was $248.4 million during the quarter compared to $301 million a year earlier.
Albertsons provided an updated fiscal 2025 outlook and expects its financial results to be as follows:
- Identical sales growth in the range of 2.2% to 2.75% (previously 2.0% to 2.75%)
- Adjusted EBITDA in the range of $3.8 billion to $3.9 billion, including approximately $65 million related to the company's 53rd week (unchanged)
- Adjusted net income per Class A common share in the range of $2.06 to $2.19 per share (previously $2.03 to $2.16)
- Effective income tax rate in the range of 23.5% to 24.5% (unchanged)
- Capital expenditures in the range of $1.8 billion to $1.9 billion (previously $1.7 billion to $1.9 billion).
