Dive Brief:

• Albertsons posted net sales and other revenue of $18.3 billion during its fiscal fourth quarter, flat compared with the same period a year ago, the grocery chain reported Monday.
• Identical sales inched up 1% during Q4, while net income was off 19%, to $251 million.
• Albertsons has recorded lackluster results for several straight quarters as it deals with a range of headwinds that have hindered the retailer’s performance.

Dive Insight:

Even as Albertsons focuses on keeping its endangered plan to merge with Kroger on track as a potential path to future growth, the company is continuing to deal with obstacles that have sharply slowed its momentum.

Albertsons’ anemic sales during its most recent quarter compare starkly with the company’s performance during the fourth quarter of fiscal 2022, when revenue and same-store sales were both up more than 5% year over year.

For all of fiscal 2023, Albertsons recorded $79.2 billion in revenue, up about 2% year over year, while identical sales rose 3% during the year, which concluded Feb. 24. Those percentages were also well below where they were a year ago, when Albertsons rode a revenue increase of roughly 8% and identical sales moved up nearly 7%.

In a statement, CEO Vivek Sankaran said Albertsons “delivered another solid quarter amidst a difficult industry backdrop,” citing declining inflation, lower government assistance for shoppers, and investments in wages and benefits for associates as reasons the company is dealing with softening results. Albertsons is also feeling the effects of lower COVID-19-related income, Sankaran said.

Albertsons did not hold a conference call to discuss its latest results, continuing a practice it began after announcing its merger plan with Kroger.

Albertsons has seen its digital and pharmacy sales rise significantly in recent months, with revenue from its pharmacy operations, in particular, helping to underpin same-store sales. Sankaran noted, however, that those aspects of its business carry lower margins, describing their growing prominence in its revenue mix as headwinds. Albertsons’ digital sales were up 24% during Q4 and up 22% for all of fiscal 2023.

Sankaran warned that Albertsons believes it will face an even steeper climb during the coming two quarters than it has been dealing with, but added that the retailer expects productivity gains to help offset those pressures.

Albertsons is on “a multi-year journey that we will continue to build on in fiscal 2024 as we invest in capabilities that allow us to digitally connect and further engage our customers through a frictionless omnichannel experience, enhance what we offer, modernize our operational capabilities and transform our ways of working,” Sankaran said.