Albertsons Companies(ACI) - 2026 Q1 - Quarterly Results

First Quarter Fiscal 2025 Highlights 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] First Quarter Fiscal 2025 Financial Performance 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] - 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] - Selling and administrative expenses as a percentage of sales decreased, primarily due to lower merger-related costs compared to the prior year[7][8] Capital Allocation and Corporate Actions 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] - The company repurchased 14.2 million shares of common stock for $314.8 million under its existing $2.0 billion authorization[15] - 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] - 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] Fiscal 2025 Outlook 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] Company Overview and Forward-Looking Statements 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] - The report contains forward-looking statements regarding future performance, which are not guarantees and are subject to significant risks and uncertainties[21][23] - Key risks include macroeconomic changes, consumer behavior shifts, labor negotiations, supply chain challenges, and litigation surrounding the terminated merger with Kroger[26] Financial Statements 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 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 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 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 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]