Financial Data and Key Metrics Changes - In Q1 2025, the company reported ID sales growth of 2.8%, adjusted EBITDA of $1,110 million, and adjusted earnings per share of $0.55, indicating solid results and gradual progress against strategic priorities [5][21][22] - The gross margin rate decreased to 27.1%, down 85 basis points year-over-year, primarily due to investments in customer value and a mix shift from strong pharmacy and digital growth [20][21] - Adjusted EBITDA decreased from $1,184 million in the previous year to $1,111 million [21][22] Business Line Data and Key Metrics Changes - E-commerce sales grew by 25%, reaching 9% of total grocery revenue, driven by strong performance in the first-party business and enhanced digital shopping experiences [6][20] - Loyalty program membership increased by 14% to 47 million members, with higher engagement and spending observed [7][9] - Pharmacy and Health platform grew by 20% year-over-year, benefiting from script and immunization growth [10][20] Market Data and Key Metrics Changes - The company anticipates identical sales growth in the range of 2% to 2.75% for the remainder of fiscal 2025, up from previous guidance of 1.5% to 2.5% [25] - The effective income tax rate for Q1 2025 was 24.1%, compared to 22.3% in the previous year, primarily due to a reduction of an uncertain tax position [21] Company Strategy and Development Direction - The company is focused on five strategic priorities: driving customer growth through digital connection, enhancing customer value, modernizing capabilities through technology, and driving transformational productivity [5][15] - Investments in digital platforms, including e-commerce and pharmacy, are expected to drive higher future customer lifetime value, despite creating near-term margin headwinds [24][25] - The company aims to leverage its consolidated scale for national buying and efficient supplier relationships, expecting to deliver $1.5 billion in savings from productivity initiatives from FY 2025 to 2027 [17][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing investments and their impact on customer engagement and traffic growth, particularly in the second half of 2025 [27][28] - The competitive pricing environment remains rational, with continued promotional investments observed [33][34] - Management highlighted the importance of cross-shopping between pharmacy and grocery, noting that pharmacy customers tend to visit stores more frequently and contribute to higher overall sales [10][52] Other Important Information - The company invested $585 million in capital expenditures during Q1 2025, including the opening of three new stores and the completion of 36 remodels [22] - The company has reached agreements covering nearly half of the 120,000 associates involved in labor negotiations, focusing on improving wages and benefits while maintaining operational flexibility [18][17] Q&A Session Summary Question: Drivers of gross margin decline and pricing environment - Management indicated that the focus remains on driving sales and unit growth, with expectations for productivity to provide a tailwind as national buying initiatives progress [32][33] - The pricing environment is characterized as rational, with continued promotional investments from competitors [34][35] Question: E-commerce profitability and media collective impact - E-commerce is nearing breakeven, driven by volume and operational efficiencies, with no financial impact from the media collective on the e-commerce P&L [37][38] Question: ID sales guidance and consumer changes - Management noted that pharmacy growth impacts ID sales comparisons, with expectations for gradual improvement in grocery units as the year progresses [42][43] Question: Price investment goals and productivity initiatives - The company is making surgical price investments based on data, with expectations for productivity initiatives to provide a tailwind in the second half of the year [46][49] Question: Pharmacy contribution from GLP-1s and customer engagement - GLP-1s contribute significantly to pharmacy comp, with strong engagement from customers leading to increased profitability in other categories [84][86] Question: Impact of tariffs on inflation - The company is actively managing cost increases from tariffs, focusing on domestic sourcing and exploring OwnBrands as a potential solution [88][90]

Financial Performance - Adjusted EBITDA reached $1.11 billion[2] - The company aims to deliver $1.5 billion in savings from FY25 to FY27[12] - Digital sales increased by 25%[2] - ID sales increased by 2.8%[2] - Adjusted EPS was $0.55[2] Strategic Initiatives - The company focuses on driving customer growth through digital engagement[4] - Building the media business to fuel reinvestment into the core business[6] - The company plans to open new demand channels[7] - The company plans to enhance the customer value proposition by amplifying Own Brands presence[8] - Partnering with strategic vendors to invest in price[10] - Modernizing capabilities with a "Technology-first focus" and leveraging AI to accelerate operations[12]

[First Quarter Fiscal 2025 Highlights](index=1&type=section&id=First%20Quarter%20of%20Fiscal%202025%20Highlights) Albertsons reported solid operating and financial performance in the first quarter of fiscal 2025, driven by strategic investments in its digital platforms, pharmacy operations, and loyalty program Q1 Fiscal 2025 Key Performance Indicators | Metric | Value | Change | | :--- | :--- | :--- | | Identical Sales | 2.8% | Increase | | Digital Sales | 25% | Increase | | Loyalty Members | 47.3 million | +14% | | Net Income | $236 million | - | | Diluted EPS | $0.41 | - | | Adjusted Net Income | $319 million | - | | Adjusted Diluted EPS | $0.55 | - | | Adjusted EBITDA | $1,111 million | - | - CEO Susan Morris attributed the solid performance to ongoing investments in strategic priorities, which increased customer engagement across digital platforms and were funded by productivity initiatives[4](index=4&type=chunk) [First Quarter Fiscal 2025 Financial Performance](index=1&type=section&id=First%20Quarter%20of%20Fiscal%202025%20Results) Net sales and other revenue grew 2.5% to $24.9 billion, primarily due to a 2.8% increase in identical sales, fueled by strong pharmacy performance and 25% growth in digital sales Q1 FY2025 vs Q1 FY2024 Financial Summary | Metric | Q1 FY2025 | Q1 FY2024 | | :--- | :--- | :--- | | Net Sales & Other Revenue | $24,880.8 M | $24,265.4 M | | Identical Sales Growth | 2.8% | N/A | | Gross Margin Rate | 27.1% | 27.8% | | S&A as % of Revenue | 25.4% | 25.9% | | Net Income | $236.4 M | $240.7 M | | Adjusted Net Income | $318.9 M | $391.6 M | | Adjusted EBITDA | $1,111.0 M | $1,183.9 M | - The increase in Net Sales was driven by a **2.8%** rise in identical sales, with strong growth in pharmacy sales being the primary contributor, alongside a **25%** increase in digital sales, partially offset by lower fuel sales[5](index=5&type=chunk) - Gross margin rate decreased by **70 basis points** (**85 basis points** excluding fuel and LIFO) due to investments in customer value, the sales mix shifting towards lower-margin pharmacy products, and higher digital delivery costs[6](index=6&type=chunk) - Selling and administrative expenses as a percentage of sales decreased, primarily due to lower merger-related costs compared to the prior year[7](index=7&type=chunk)[8](index=8&type=chunk) [Capital Allocation and Corporate Actions](index=2&type=section&id=Capital%20Allocation%20and%20Common%20Stock%20Repurchase%20Program) In Q1 fiscal 2025, the company executed a balanced capital allocation strategy, investing in capital expenditures, paying dividends, repurchasing shares, and refinancing debt - Capital expenditures totaled **$584.6 million**, used for **36 remodels**, **three new stores**, and investments in digital and technology platforms[14](index=14&type=chunk) - The company repurchased **14.2 million shares** of common stock for **$314.8 million** under its existing **$2.0 billion** authorization[15](index=15&type=chunk) - A quarterly dividend of **$0.15 per share** was paid on May 9, 2025, and the next quarterly dividend of **$0.15 per share** was announced for payment on August 8, 2025[14](index=14&type=chunk) - The company issued **$600.0 million** of **6.250%** senior unsecured notes due 2033 to redeem its **7.500%** senior unsecured notes due 2026, effectively lowering its interest expense on this debt[16](index=16&type=chunk) [Fiscal 2025 Outlook](index=3&type=section&id=Fiscal%202025%20Outlook) Albertsons has updated its fiscal 2025 outlook, raising its identical sales growth forecast while maintaining other key guidance metrics Updated Fiscal 2025 Guidance | Metric | Fiscal 2025 Outlook | Status | | :--- | :--- | :--- | | Identical Sales Growth | 2.0% to 2.75% | **Updated** (from 1.5% - 2.5%) | | Adjusted EBITDA | $3.8B to $3.9B | Unchanged | | Adjusted Net Income per Share | $2.03 to $2.16 | Unchanged | | Effective Income Tax Rate | 23.5% to 24.5% | Unchanged | | Capital Expenditures | $1.7B to $1.9B | Unchanged | - The company is unable to provide a full reconciliation for its forward-looking non-GAAP measures to GAAP measures without unreasonable effort due to the unpredictability of certain adjustment items[17](index=17&type=chunk) [Company Overview and Forward-Looking Statements](index=3&type=section&id=About%20Albertsons%20Companies) Albertsons is a leading U.S. food and drug retailer operating 2,264 stores, with the report including forward-looking statements subject to numerous risks and uncertainties - As of June 14, 2025, the company operated **2,264 retail stores**, **1,725 pharmacies**, and **408 fuel centers** across **35 states** and D.C[19](index=19&type=chunk) - The report contains forward-looking statements regarding future performance, which are not guarantees and are subject to significant risks and uncertainties[21](index=21&type=chunk)[23](index=23&type=chunk) - Key risks include macroeconomic changes, consumer behavior shifts, labor negotiations, supply chain challenges, and litigation surrounding the terminated merger with Kroger[26](index=26&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section provides the unaudited condensed consolidated financial statements for the 16 weeks ended June 14, 2025, including Statements of Operations, Balance Sheets, and Statements of Cash Flows [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the first quarter of fiscal 2025, Net Sales and Other Revenue increased to $24.88 billion, while Operating Income slightly decreased, and Net Income remained relatively flat Q1 FY2025 Statement of Operations (in millions) | Line Item | Q1 FY2025 | Q1 FY2024 | | :--- | :--- | :--- | | Net sales and other revenue | $24,880.8 | $24,265.4 | | Gross margin | $6,738.3 | $6,738.9 | | Operating income | $449.3 | $459.6 | | Income before income taxes | $311.4 | $309.9 | | Net income | $236.4 | $240.7 | | Diluted net income per share | $0.41 | $0.41 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 14, 2025, total assets slightly decreased to $26.47 billion, cash and equivalents declined, total liabilities increased, and total stockholders' equity decreased due to share repurchases Balance Sheet Summary (in millions) | Line Item | June 14, 2025 | February 22, 2025 | | :--- | :--- | :--- | | Total current assets | $6,416.9 | $6,559.0 | | Total assets | $26,469.8 | $26,755.7 | | Total current liabilities | $7,867.9 | $7,251.0 | | Total liabilities | $23,245.5 | $23,370.8 | | Total stockholders' equity | $3,224.3 | $3,385.9 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first quarter, net cash provided by operating activities decreased to $754.4 million, while net cash used in investing and financing activities resulted in a net decrease in cash of $142.6 million Q1 Cash Flow Summary (in millions) | Cash Flow Activity | Q1 FY2025 | Q1 FY2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $754.4 | $960.9 | | Net cash used in investing activities | ($474.1) | ($538.0) | | Net cash used in financing activities | ($422.9) | ($320.8) | | Net (decrease) increase in cash | ($142.6) | $102.1 | [Reconciliation of Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section provides detailed reconciliations of GAAP financial measures to non-GAAP measures, including Adjusted Net Income, Adjusted EBITDA, and the Total Net Debt Ratio Reconciliation of Net Income to Adjusted EBITDA (Q1 FY2025, in millions) | Line Item | Amount | | :--- | :--- | | **Net income** | **$236.4** | | Depreciation and amortization | $572.7 | | Interest expense, net | $141.8 | | Income tax expense | $75.0 | | Business transformation | $38.3 | | Merger-related costs | $19.0 | | (Gain) on property dispositions | ($31.9) | | Other adjustments | $58.7 | | **Adjusted EBITDA** | **$1,111.0** | Reconciliation of Diluted EPS to Adjusted Diluted EPS (Q1 FY2025) | Line Item | Per Share Amount | | :--- | :--- | | **Net income per Class A common share - diluted** | **$0.41** | | Non-GAAP adjustments | $0.15 | | Restricted stock units adjustment | ($0.01) | | **Adjusted net income per Class A common share - diluted** | **$0.55** | - The Total Net Debt Ratio increased to **1.96x** as of Q1 FY2025, compared to **1.81x** in the prior-year period[43](index=43&type=chunk)

Core Viewpoint - Analysts project that Albertsons Companies, Inc. (ACI) will report quarterly earnings of $0.53 per share, reflecting a year-over-year decline of 19.7%, while revenues are expected to reach $24.72 billion, an increase of 1.9% from the same quarter last year [1]. Earnings Projections - The consensus EPS estimate for the quarter has been revised downward by 6.6% over the past 30 days, indicating a collective reassessment by analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue and Key Metrics - Analysts expect 'Revenues- Fuel' to be $1.28 billion, which represents a decrease of 3.2% from the prior-year quarter [5]. - The average forecast for 'Number of stores at end of quarter' is 2,270, slightly up from 2,269 reported in the same quarter last year [5]. - The projected 'Total Square Footage - Retail Square Feet' is 113.03 million, compared to 112.80 million in the same quarter last year [6]. Market Performance - Over the past month, Albertsons Companies shares have gained 5%, outperforming the Zacks S&P 500 composite's increase of 4.4% [6]. - Based on its Zacks Rank 4 (Sell), ACI is expected to underperform the overall market in the upcoming period [6].

Group 1 - Albertsons Companies, Inc. is a leading grocery retailer in the United States, operating 2,270 stores under more than 20 brands across 34 states and the District of Columbia [1] - The company's network includes supermarkets and various other retail formats, indicating a diverse operational structure [1] Group 2 - The company is listed on the New York Stock Exchange under the ticker symbol ACI, highlighting its public trading status [1]

Group 1 - Albertsons Companies, Inc. is set to release its Q1 earnings results on July 15, with expected earnings of 54 cents per share, a decrease from 66 cents per share in the same period last year [1] - The company anticipates quarterly revenue of $24.69 billion, an increase from $24.27 billion a year earlier [1] Group 2 - On May 14, Albertsons launched its Own Brand, Chef's Counter™, aimed at providing chef-inspired flavors in a convenient and affordable manner [2] - Following the announcement, Albertsons shares rose by 3.7%, closing at $22.74 [2] Group 3 - Analysts have provided various ratings for Albertsons, with Telsey Advisory Group maintaining an Outperform rating and a price target of $24 [5] - BMO Capital upgraded the stock from Market Perform to Outperform, raising the price target from $19 to $25 [5] - JP Morgan maintained an Overweight rating and increased the price target from $24 to $31 [5] - Tigress Financial kept a Buy rating and raised the price target from $27 to $28 [5] - Evercore ISI Group maintained an In-Line rating but reduced the price target from $23 to $22 [5]

Core Points - A couple from Riverside County won $5 million from a Scratchers lottery game purchased at an Albertsons grocery store in Murrieta, California [2][4] - The store will receive a $25,000 bonus for selling the winning ticket [5] Group 1 - The winning couple, Deborah Trullinger and her husband, were grocery shopping when they purchased the lottery tickets [2] - Initially, Deborah thought she won $500, then $5,000, before realizing the total was $5 million [3] - The couple plans to use their winnings to accelerate retirement, travel, and possibly buy a new car and home [4] Group 2 - Deborah Trullinger has a history of lottery success, having previously won $30,000 in Arizona [5] - The couple's winnings are being celebrated as a special anniversary gift, coinciding with their upcoming 45th wedding anniversary [4]

Core Insights - ACI Worldwide is a global payments technology provider that facilitates a wide range of transactions, including card payments and account-to-account transfers, operating in 95 countries for over five decades [2][4]. Group 1: Company Overview - ACI Worldwide supports various industries such as utilities, government, insurance, healthcare, higher education, mortgages, subscriptions, and telecommunications [3]. - The company is headquartered in the US and has a business presence across the Americas, the Middle East, Asia-Pacific, Europe, and Africa [3]. Group 2: Product and Service Offerings - ACI provides software solutions for credit, debit, and prepaid card payments, as well as account-to-account payments for banks, billers, and merchants [2]. - Recent product launches include ACI Instant Pay for real-time payments in January 2023, ACI Wallets for accepting over 200 digital wallets in 70+ countries, and a digital central infrastructure for central banks and financial institutions introduced in September 2023 [6]. Group 3: Partnerships and Collaborations - In February 2025, ACI partnered with UK-based fintech Banfico to offer payment verification services to banks and payment providers in the UK and Europe [6]. Group 4: Performance and Competitive Analysis - The report includes insights into ACI's operational and financial performance, benchmarking against competitors, and a detailed overview of its revenue model [6][8]. - ACI's significant events and milestones, including partnerships and product launches, are highlighted to assess its competitive dynamics in the alternative payments industry [6].

Group 1 - 22% of the FROLD collection from The ROL100 ranking of leadership among the 2025 Fortune 500 list consists of companies that are either unlisted publicly or do not pay dividends [1] - 11% of the companies in this collection are identified as IDEAL and ready to buy [1] Group 2 - The Dogcatcher has identified Albertsons as a notable candidate for investment [1]

Group 1 - The analysis revisits ACI Worldwide (ACIW) after three quarters, highlighting a previous 'Buy' rating due to strong cash generation, expanding margins, and modest valuation despite significant price increases [1] - The company has shown consistent performance in cash generation and margin expansion, which are critical indicators for potential investment opportunities [1]