Albertsons Companies, Inc. (NYSE:ACI) Q2 2021 Earnings Conference Call October 18, 2021 8:30 AM ET Company Participants Melissa Plaisance - GVP of Treasury and Investor Relations Vivek Sankaran - Chief Executive Officer Sharon McCollam - President and Chief Financial Officer Conference Call Participants Simeon Gutman - Morgan Stanley Edward Kelly - Wells Fargo John Heinbockel - Guggenheim Karen Short - Barclays Ken Goldman - J.P. Morgan Paul Lejuez - Citi Rupesh Parikh - Oppenheimer Scott Mushkin - R5 Capit ...

Albertsons Companies, Inc. (NYSE:ACI) Q1 2021 Earnings Conference Call July 29, 2021 8:30 AM ET Company Participants Melissa Plaisance – GVP of Treasury and Investor Relations Vivek Sankaran – President and Chief Operating Officer Bob Dimond – Chief Financial Officer Conference Call Participants John Heinbockel – Guggenheim Partners Paul Lejuez – Citibank Karen Short – Barclays Edward Kelly – Wells Fargo Scott Mushkin – R5 Capital Ken Goldman – J.P. Morgan Simeon Gutman – Morgan Stanley Kate McShane – Goldm ...

Financial Data and Key Metrics Changes - For Q4 2020, total sales reached $15.8 billion, driven by an 11.8% increase in identical sales [23] - Adjusted EBITDA for the full year was $4.5 billion, reflecting over 60% growth [9] - Adjusted EPS grew 212% to $3.24 for the full year [9] - Gross profit margin increased to 28.9% in Q4 2020, compared to 28.6% in Q4 2019 [23] Business Line Data and Key Metrics Changes - Digital sales growth accelerated to 282% in Q4, with a full-year growth of 258% [10] - Fresh product sales outpaced center store sales by 300 basis points [13] - Owned brand penetration exceeded 25% in Q4, with expectations to reach 30% in the coming years [14] Market Data and Key Metrics Changes - Identified sales for the full year increased by 16.9%, exceeding expectations [25] - Membership in the Just for U loyalty program grew to 25.4 million, with a retention rate of 93.1% [10] - The number of omnichannel households tripled compared to fiscal year-end 2019, with these households spending significantly more [11] Company Strategy and Development Direction - The company focuses on building deep customer relationships through differentiated product offerings and enhanced omnichannel capabilities [8] - Strategic priorities include in-store excellence, digital and omnichannel acceleration, productivity driving, and talent and culture strengthening [12] - Continued investment in technology and digital initiatives is expected to drive future growth [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of competitiveness despite varying COVID restrictions across geographies [9] - The company anticipates food at home inflation of 1% to 2% for the fiscal year, with a rational competitive environment expected [35] - Management highlighted the importance of maintaining flexibility and speed in operations while leveraging national scale [8] Other Important Information - The company administered 3.1 million COVID vaccine doses through its pharmacy teams [20] - Significant community support included $260 million in food and charitable donations during fiscal 2020 [21] - The company is committed to enhancing its ESG strategy, focusing on diversity, equity, and sustainability [22] Q&A Session Summary Question: Clarification on quarter-to-date trends - Management indicated that sales trends are in line with the exit of Q4, modeling business on weekly dollar sales [38][39] Question: Cadence of identical sales throughout the year - Management acknowledged that predicting topline sales becomes more challenging further out, emphasizing strong productivity programs for the second half of the year [42] Question: Details on the incremental $500 million in cost savings - Management explained that productivity savings would be reinvested in the business while also providing a cushion for the bottom line [44] Question: Update on gross margin expectations for 2021 - Management expressed confidence in maintaining gross margins at levels seen in 2020, driven by productivity initiatives [49] Question: Insights on food at home inflation - Management provided context on planning assumptions for inflation, indicating that demand is still ahead of supply in many categories [55][56]

Financial Data and Key Metrics Changes - Q3 identical sales increased by 12.3% with adjusted EPS growth of 275% year-over-year to $0.66 per share [8] - Adjusted EBITDA rose 53% to $968 million, reflecting robust flow-through [8][28] - Total sales reached $15.4 billion, up from $14.1 billion in the same quarter last year [26] - Gross profit margin improved to 29.3% compared to 28.3% in Q3 last year [26] Business Line Data and Key Metrics Changes - Digital sales grew 225% year-over-year, with drive-up-and-go (DUG) sales increasing over 800% [18] - Fresh product sales saw higher ID sales, particularly in seafood, meat, and floral categories [12][13] - Owned brands generated $14 billion in sales, with penetration exceeding 25% in the last four weeks of Q3 [14] Market Data and Key Metrics Changes - The company gained significant market share in both food and MULO categories, with over 6 million new households shopping [9] - Loyalty program registered users increased by 23.5% year-over-year, with active users spending 4.1 times more than non-active customers [10] Company Strategy and Development Direction - The company focuses on in-store excellence, digital and omnichannel capabilities, productivity improvements, and strengthening talent and culture [11][22][23] - Plans to invest over $300 million in digital and omnichannel capabilities during fiscal year 2020 [19] - Continued expansion of meal solutions and owned brands to drive growth [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining competitiveness despite the pandemic, noting changes in consumer behavior that may persist [35][39] - The outlook for fiscal 2020 was raised, with expected identical sales of approximately 16.5% and adjusted EPS in the range of $3.05 to $3.15 per share [33] - Management emphasized the importance of personalized promotions and smarter marketing strategies moving forward [48] Other Important Information - The company has allocated an additional $200 million for store-related capital to accelerate priority projects [17] - Strong operating free cash flow of $1.9 billion year-to-date, with ongoing share repurchase and dividend programs [30][32] Q&A Session Summary Question: Can you provide more color around the cadence of identical sales through the quarter? - Management noted similar ID sales throughout the quarter with a slight lift around Thanksgiving, maintaining low double-digit growth into Q4 [44] Question: How should we think about gross margin in the fourth quarter? - Management indicated that promotions have increased but are still below 2019 levels, focusing on quality over quantity in promotions [48][49] Question: Are there differences in market share gains compared to prior quarters? - Management confirmed consistent market share gains in both dollar and unit terms, particularly in fresh categories [52][53] Question: What is the expected impact of digital on gross margin? - Management indicated that digital expenses impacted margins, but improvements in shrink and sales leverage offset some costs [68] Question: How does the company plan to manage potential wage increases from proposed hero pay? - Management stated they would push back against such proposals and manage costs through various levers, emphasizing part-time labor management [62][63]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Class A common stock, $0.01 par value ACI New York Stock Exchange FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 12, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Comm ...