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BOISE, Idaho – Albertsons Companies Inc. posted solid sales gains for the third quarter of fiscal 2023, shining a positive light on the grocer’s strategy as it waits for a green light on its planned merger with Kroger Co.
Third quarter fiscal 2023 highlights included:
- Growth in Identical Sales. Albertsons witnessed a 2.9% increase in identical sales, a key indicator of retail health, suggesting a positive reception of their product offerings among repeat customers.
- Surge in Digital Sales. Digital sales saw a significant boost, escalating by 21%. This growth underscores the company’s successful adaptation to the evolving digital shopping trends and consumer preferences.
- Expansion of Loyalty Base. The number of loyalty members swelled by 17%, reaching 38.5 million. This increase reflects the effectiveness of Albertsons’ customer engagement strategies and the value customers find in their loyalty program.
- Robust Financial Performance. The net income stood at $361 million, translating to $0.62 per share. Additionally, the adjusted net income was reported at $462 million, or $0.79 per share, and adjusted EBITDA reached $1,107 million. These figures represent the company’s strong financial health and operational efficiency.
“We delivered another solid quarter amidst a challenging economic backdrop,” Albertsons CEO Vivek Sankaran said, adding that he was grateful to the company’s teams for their dedication to serving customers and communities. Sankaran also highlighted the company’s ongoing commitment to creating lifelong customers through operational excellence in stores, growth in digital and pharmacy operations, and deeper customer relationships.
Addressing future expectations, Sankaran noted, “While we are benefiting from our productivity initiatives, we expect to continue to see the impacts of investments in associate wages and benefits, cycling significant prior year food inflation, and the reduced government assistance to customers.” He also pointed out the anticipated challenges, such as the resumption of student loan payments and other payment deferrals, inflationary cost increases, and the significant growth in pharmacy and digital businesses. These factors are integral to Albertsons’ “Customers for Life” strategy, focusing on increased customer engagement.
Albertsons’ strong performance in the fiscal third quarter that ended December 2 suggests an effective strategy for navigating economic uncertainties while maintaining a steady growth trajectory, the company said.
Net sales and other revenue was $18.6 billion during the third quarter, up from $18.2 billion in the prior year period. The increase was driven by the company’s 2.9% increase in identical sales, with strong growth in pharmacy sales driving the identical sales increase. Albertsons says it also continued to grow its digital business with a 21% sales increase during the third quarter of fiscal 2023.
Net income was $361.4 million, or $0.62 per share, during the third quarter of fiscal 2023, down from $375.5 million, or $0.20 per share, during the third quarter of fiscal 2022. Net income per share during the third quarter of fiscal 2022 includes a $0.45 per share reduction related to the special cash dividend of $6.85 per share attributable to holders of convertible preferred stock on an as-converted basis. Adjusted net income was $462.3 million, or $0.79 per share, during the third quarter of fiscal 2023 compared to $505.1 million, or $0.87 per share, during the third quarter of fiscal 2022. Adjusted EBITDA was $1,106.5 million, or 6.0% of Net sales and other revenue, during the third quarter of fiscal 2023 compared to $1,158.0 million, or 6.4% of Net sales and other revenue, during the third quarter of fiscal 2022.
As it looks ahead to the fourth quarter of fiscal 2023, the company expects continued outsized growth and margin impact in our pharmacy and digital operations.
Albertsons also noted that during the first 40 weeks of fiscal 2023, capital expenditures were $1,535.0 million. That primarily included the completion of 115 remodels, the opening of five new stores and continued investment in our digital and technology platforms.
