Albertsons (ACI) Q4 Earnings In Line, Sales Miss Estimates

Core Insights - Albertsons Companies, Inc. (ACI) reported mixed fourth-quarter fiscal 2023 results, with earnings in line with estimates but sales missing expectations [1][3] - The company's top line saw a marginal year-over-year increase, while the bottom line declined [1] - ACI's strategy focuses on operational excellence, digital expansion, pharmacy operations, and customer relationships to drive growth [1] Financial Performance - Adjusted quarterly earnings were 54 cents per share, a decline of 31.6% from 79 cents in the prior-year period [3] - Net sales and other revenues reached $18,339.5 million, up 0.4% year over year, but missed the consensus estimate of $18,401 million [3] - Identical sales rose by 1%, driven by strong pharmacy sales, although this was partially offset by declines in fuel sales and wholesale revenues [3] Profitability Metrics - Gross profit was $5,144.2 million, an increase of 1.2% year over year, with gross margin expanding by 20 basis points to 28.0% [3] - Excluding fuel and LIFO expenses, gross margin decreased by 58 basis points year over year due to lower margins in pharmacy operations and increased shrink [4] - Selling and administrative expenses decreased by 0.1% to $4,717.2 million, with the expense rate declining by 10 basis points to 25.7% of net sales [4][5] Operational Challenges - Adjusted EBITDA declined by 12.8% year over year to $915.8 million, with the adjusted EBITDA margin contracting by 100 basis points [5] - Higher operating expenses related to digital and omni-channel development, merger-related costs, and increased store occupancy costs contributed to the challenges [5] Balance Sheet Overview - As of February 24, 2024, ACI had cash and cash equivalents of $188.7 million, long-term debt and finance lease obligations totaling $7,783.4 million, and total stockholders' equity of $2,747.5 million [6]