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Albertsons (ACI) Q1 Earnings in Line, Digital Sales Rise 23%
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Albertsons Companies, Inc. (ACI - Free Report) reported mixed first-quarter fiscal 2024 results, wherein sales surpassed the Zacks Consensus Estimate, while earnings met the same. Additionally, on a year-over-year basis, the company’s top line increased marginally but the bottom line declined.
The company continued to prioritize its goal by investing in "Customers for Life" strategy and digital capabilities. The quarter marked loyalty member growth of 15% from the 'for U' program, significant growth in digital and pharmacy businesses, and a 23% increase in digital sales, despite economic challenges.
Q1 Performance in Detail
Albertsons, which entered into an “Agreement and Plan of Merger” with Kroger on Oct 13, 2022, posted adjusted quarterly earnings of 66 cents per share, in line with the Zacks Consensus Estimate. However, the bottom line declined 29% from 93 cents a share reported in the prior-year period.
Net sales and other revenues were $24,265.4 million, up 0.9% year over year. However, the top line exceeded the Zacks Consensus Estimate of $24,143 million. The year-over-year sales momentum can be attributable to a 1.4% rise in identical sales driven by strong growth in pharmacy sales. This was partly negated by lower fuel sales.
The gross profit of $6.7 billion increased 1.1% year over year. The gross margin expanded 10 basis points (bps) year over year to 27.8% compared with 27.7% in the first quarter of fiscal 2023.
Excluding the impacts of fuel and LIFO expenses, the gross margin rate decreased 22 bps year over year. This decline was primarily caused by robust growth in pharmacy operations, which generally have a lower gross margin rate as well as increases in shrinkage. Gross margin was also affected by higher picking and delivery costs owing to growth in digital sales. This was partly mitigated by procurement and sourcing productivity initiatives.
During the quarter, selling and administrative expenses rose 4.3% to $6.3 billion and increased 90 bps to 25.9%, as a percentage of net sales and other revenues. Excluding the impact of fuel, selling and administrative expense rate increased 79 bps year over year. This was caused by higher operating expenses related to digital and omni-channel developments, ongoing Merger-related costs, elevated store occupancy costs and incremental third-party store security services costs. This was partly offset by the benefits of productivity initiatives.
Adjusted EBITDA declined 10.2% year over year to $1.2 billion while adjusted EBITDA margin contracted 60 bps.
Albertsons Companies, Inc. Price, Consensus and EPS Surprise
Albertsons ended the quarter with cash and cash equivalents of $291.1 million as of Jun 15, 2024. The company’s long-term debt and finance lease obligations totaled $7.87 billion, while total stockholders' equity amounted to $2.9 billion.
Shares of this Zacks Rank #4 (Sell) company have increased 1.5% in the past three months compared with the industry's growth of 1.3%.
Image Source: Zacks Investment Research
3 Picks You Can’t Miss
Here, we have highlighted three better-ranked stocks, namely, Vital Farms (VITL - Free Report) , Ollie's Bargain Outlet (OLLI - Free Report) and Colgate-Palmolive (CL - Free Report) .
Vital Farms offers a range of produced pasture-raised foods. It currently sports a Zacks Rank #1 (Strong Buy). VITL has a trailing four-quarter average earnings surprise of 102.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 22.6% and 64.4%, respectively, from the year-ago reported numbers.
Ollie's Bargain, the extreme-value retailer of brand-name merchandise, currently carries a Zacks Rank #1. OLLI has a trailing four-quarter earnings surprise of 10.4%, on average.
The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year sales and earnings indicates a rise of around 8.1% and 12.3%, respectively, from the year-earlier levels.
Colgate-Palmolive, which manufactures and sells consumer products, currently carries a Zacks Rank #2 (Buy). CL delivered an earnings surprise of 4.4% in the trailing four quarters, on average.
The Zacks Consensus Estimate for Colgate-Palmolive’s current fiscal-year sales and earnings suggests growth of 3.8% and nearly 9.6%, respectively, from the year-ago reported quarter.
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Albertsons (ACI) Q1 Earnings in Line, Digital Sales Rise 23%
Albertsons Companies, Inc. (ACI - Free Report) reported mixed first-quarter fiscal 2024 results, wherein sales surpassed the Zacks Consensus Estimate, while earnings met the same. Additionally, on a year-over-year basis, the company’s top line increased marginally but the bottom line declined.
The company continued to prioritize its goal by investing in "Customers for Life" strategy and digital capabilities. The quarter marked loyalty member growth of 15% from the 'for U' program, significant growth in digital and pharmacy businesses, and a 23% increase in digital sales, despite economic challenges.
Q1 Performance in Detail
Albertsons, which entered into an “Agreement and Plan of Merger” with Kroger on Oct 13, 2022, posted adjusted quarterly earnings of 66 cents per share, in line with the Zacks Consensus Estimate. However, the bottom line declined 29% from 93 cents a share reported in the prior-year period.
Net sales and other revenues were $24,265.4 million, up 0.9% year over year. However, the top line exceeded the Zacks Consensus Estimate of $24,143 million. The year-over-year sales momentum can be attributable to a 1.4% rise in identical sales driven by strong growth in pharmacy sales. This was partly negated by lower fuel sales.
The gross profit of $6.7 billion increased 1.1% year over year. The gross margin expanded 10 basis points (bps) year over year to 27.8% compared with 27.7% in the first quarter of fiscal 2023.
Excluding the impacts of fuel and LIFO expenses, the gross margin rate decreased 22 bps year over year. This decline was primarily caused by robust growth in pharmacy operations, which generally have a lower gross margin rate as well as increases in shrinkage. Gross margin was also affected by higher picking and delivery costs owing to growth in digital sales. This was partly mitigated by procurement and sourcing productivity initiatives.
During the quarter, selling and administrative expenses rose 4.3% to $6.3 billion and increased 90 bps to 25.9%, as a percentage of net sales and other revenues. Excluding the impact of fuel, selling and administrative expense rate increased 79 bps year over year. This was caused by higher operating expenses related to digital and omni-channel developments, ongoing Merger-related costs, elevated store occupancy costs and incremental third-party store security services costs. This was partly offset by the benefits of productivity initiatives.
Adjusted EBITDA declined 10.2% year over year to $1.2 billion while adjusted EBITDA margin contracted 60 bps.
Albertsons Companies, Inc. Price, Consensus and EPS Surprise
Albertsons Companies, Inc. price-consensus-eps-surprise-chart | Albertsons Companies, Inc. Quote
Other Financial Details
Albertsons ended the quarter with cash and cash equivalents of $291.1 million as of Jun 15, 2024. The company’s long-term debt and finance lease obligations totaled $7.87 billion, while total stockholders' equity amounted to $2.9 billion.
Shares of this Zacks Rank #4 (Sell) company have increased 1.5% in the past three months compared with the industry's growth of 1.3%.
Image Source: Zacks Investment Research
3 Picks You Can’t Miss
Here, we have highlighted three better-ranked stocks, namely, Vital Farms (VITL - Free Report) , Ollie's Bargain Outlet (OLLI - Free Report) and Colgate-Palmolive (CL - Free Report) .
Vital Farms offers a range of produced pasture-raised foods. It currently sports a Zacks Rank #1 (Strong Buy). VITL has a trailing four-quarter average earnings surprise of 102.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 22.6% and 64.4%, respectively, from the year-ago reported numbers.
Ollie's Bargain, the extreme-value retailer of brand-name merchandise, currently carries a Zacks Rank #1. OLLI has a trailing four-quarter earnings surprise of 10.4%, on average.
The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year sales and earnings indicates a rise of around 8.1% and 12.3%, respectively, from the year-earlier levels.
Colgate-Palmolive, which manufactures and sells consumer products, currently carries a Zacks Rank #2 (Buy). CL delivered an earnings surprise of 4.4% in the trailing four quarters, on average.
The Zacks Consensus Estimate for Colgate-Palmolive’s current fiscal-year sales and earnings suggests growth of 3.8% and nearly 9.6%, respectively, from the year-ago reported quarter.