Albertsons Q2 Earnings Beat Estimates, Loyalty Members Rise 15% Y/Y

Core Insights - Albertsons Companies, Inc. (ACI) reported second-quarter fiscal 2024 results with both net sales and earnings surpassing the Zacks Consensus Estimate, although earnings decreased compared to the previous year [1][2] Financial Performance - Adjusted quarterly earnings were 51 cents per share, exceeding the Zacks Consensus Estimate of 48 cents, but down 19% from 63 cents per share in the prior-year period [2] - Net sales and other revenues reached $18,551.5 million, beating the Zacks Consensus Estimate of $18,451 million, and increased by 1.4% year over year, driven by a 2.5% rise in identical sales and a 24% increase in digital sales [3] - Gross profit was $5.1 billion, up 1.6% year over year, while the gross margin remained flat at 27.6% [3] - Selling and administrative expenses rose 4.1% to $4.8 billion, increasing to 25.8% as a percentage of net sales, attributed to higher operating expenses related to digital and omnichannel development, merger-related costs, and increased employee expenses [4] - Adjusted EBITDA declined 7.8% year over year to $900.6 million, with the adjusted EBITDA margin contracting by 40 basis points [4] Balance Sheet and Future Outlook - As of September 7, 2024, cash and cash equivalents stood at $280 million, with long-term debt and finance-lease obligations totaling $7.78 billion and total stockholders' equity at $3 billion [6] - Management anticipates margin pressure in fiscal 2024 due to competitive challenges, investments in wages and benefits, and a higher mix of lower-margin pharmacy and digital businesses, although productivity initiatives are expected to mitigate some of these pressures [6] Market Performance - Shares of Albertsons have declined by 8% over the past three months, contrasting with a 4% growth in the industry [6]