Albertsons Companies(ACI)2025-01-08 12:31Sales Performance - Net sales and other revenue increased 1.2% to $18,774.5 million in Q3 fiscal 2024, driven by a 2.0% increase in identical sales and a 23% growth in digital sales[5] - Digital sales grew 23% in Q3 fiscal 2024, with loyalty members increasing 15% to 44.3 million[7] - Net sales and other revenue for the 12 weeks ended November 30, 2024, were $18,774.5 million, a 1.2% increase compared to $18,557.3 million in the same period in 2023[31] - Identical sales include stores operating during the same period in both the current and prior fiscal year, comparing sales on a daily basis, with direct-to-consumer digital sales included and fuel sales excluded[28] Profitability and Margins - Gross margin rate decreased to 27.9% in Q3 fiscal 2024, primarily due to strong growth in pharmacy sales and increased digital sales costs[6] - Gross margin for the 12 weeks ended November 30, 2024, was $5,246.4 million, representing 27.9% of net sales, slightly down from 28.0% in the same period in 2023[31] - Adjusted EBITDA was $1,065.1 million, or 5.7% of net sales, in Q3 fiscal 2024, compared to $1,106.5 million, or 6.0% of net sales, in Q3 fiscal 2023[13] - Adjusted EBITDA for the 12 weeks ended November 30, 2024, was $1,065.1 million, compared to $1,106.5 million for the same period in 2023[37] - Rolling four quarters Adjusted EBITDA as of November 30, 2024, was $4,065.4 million, compared to $4,452.1 million as of December 2, 2023[47] Net Income and Earnings - Net income for the 12 weeks ended November 30, 2024, was $400.6 million, an 11% increase compared to $361.4 million in the same period in 2023[31] - Net income for the 12 weeks ended November 30, 2024, was $400.6 million, compared to $361.4 million for the same period in 2023[37] - Adjusted net income per Class A common share for the 12 weeks ended November 30, 2024, was $0.71, compared to $0.79 for the same period in 2023[39] Capital Expenditures and Investments - Capital expenditures totaled $1,446.7 million in the first 40 weeks of fiscal 2024, including 84 remodels and 9 new store openings[14] - Payments for property, equipment, and intangibles, including lease buyouts, for the 40 weeks ended November 30, 2024, were $1,446.7 million, a 5.8% decrease compared to $1,535.0 million in the same period in 2023[35] Dividends and Share Repurchases - The company increased its quarterly common stock dividend by 25% to $0.15 per share[7] - The company authorized a share repurchase program of up to $2.0 billion[16] Legal and Merger Activities - The company terminated the Merger Agreement with Kroger and filed a lawsuit seeking damages, including a $600 million termination fee[17][18] - Merger-related costs for the 12 weeks ended November 30, 2024, were $61.1 million, compared to $35.9 million for the same period in 2023[37] Financial Position and Debt - Total assets as of November 30, 2024, were $26,665.3 million, a 1.7% increase compared to $26,221.1 million as of February 24, 2024[33] - Inventories, net as of November 30, 2024, were $5,137.2 million, a 3.9% increase compared to $4,945.2 million as of February 24, 2024[33] - Long-term debt and finance lease obligations as of November 30, 2024, were $7,777.1 million, slightly down from $7,783.4 million as of February 24, 2024[33] - Total debt net of cash and cash equivalents as of November 30, 2024, was $7,636.1 million, compared to $8,312.1 million as of December 2, 2023[47] Operational Costs and Expenses - Business transformation costs for the 12 weeks ended November 30, 2024, were $15.0 million, compared to $12.3 million for the same period in 2023[37] - Equity-based compensation expense for the 12 weeks ended November 30, 2024, was $21.7 million, compared to $23.3 million for the same period in 2023[37] - LIFO expense for the 12 weeks ended November 30, 2024, was $3.5 million, compared to $27.6 million for the same period in 2023[37] - Depreciation and amortization for the 12 weeks ended November 30, 2024, was $423.0 million, compared to $414.7 million for the same period in 2023[37] Cash Flow - Net cash provided by operating activities for the 40 weeks ended November 30, 2024, was $1,922.1 million, an 11% increase compared to $1,730.8 million in the same period in 2023[35] Fiscal 2024 Outlook - Fiscal 2024 outlook includes identical sales growth of 1.8% to 2.0% and adjusted EBITDA in the range of $3.95 billion to $3.99 billion[21] - The company expects an effective tax rate of 15% to 16% for fiscal 2024, reflecting $81.0 million of discrete state income tax benefits recognized in Q3 fiscal 2024[20] Store Operations - Number of stores at the end of the quarter was 2,273, a slight increase from 2,271 in the previous quarter[31]