Albertsons Companies-Albertsons' Q3 Earnings Beat Estimates, Digital Sales Rise 23% Y/Y

Core Insights - Albertsons Companies, Inc. (ACI) reported third-quarter fiscal 2024 results with net sales of $18,774.5 million, a 1.2% year-over-year increase, but below the Zacks Consensus Estimate of$ 18,796 million [4] - Adjusted earnings per share (EPS) were 71 cents, surpassing the Zacks Consensus Estimate of 66 cents, although this represents a 10.1% decline from 79 cents in the prior-year period [3] Financial Performance - The gross profit for the quarter was $5.2 billion, reflecting a 0.9% year-over-year increase, while the gross margin contracted by 10 basis points to 27.9% [5] - Adjusted EBITDA declined 3.7% year over year to$ 1.1 billion, with an adjusted EBITDA margin of 5.7%, down 30 basis points [8] - Selling and administrative expenses increased by 2.4% to $4.7 billion, rising to 25.1% as a percentage of net sales [7] Strategic Focus - ACI is committed to its "Customers for Life" strategy, which has driven growth in digital sales (up 23%), pharmacy operations, and loyalty program memberships (up 15% to 44.3 million) [2][5] - The company aims to enhance digital engagement, expand omnichannel capabilities, and increase customer value to accelerate growth [2] Future Outlook - For fiscal 2024, ACI revised its guidance for identical sales growth to a range of 1.8% to 2% and adjusted EBITDA to$ 3.95- $3.99 billion [13] - The adjusted EPS forecast for fiscal 2024 is now in the range of$ 2.25- $2.31, compared to$ 2.88 delivered in fiscal 2023 [13] Capital Management - ACI ended the quarter with cash and cash equivalents of $202.3 million and total long-term debt of$ 7.8 billion [9] - The company raised its quarterly dividend by 25% from 12 cents to 15 cents per share, with the next payment scheduled for February 7, 2025 [11][12]