Dive Brief:
- Albertsons recorded $24.3 billion in net sales and other revenue during its fiscal first quarter, up nearly 1% compared with the same period in 2023, the grocer announced Tuesday. Lower fuel sales partially offset its net sales increase, Albertsons noted.
- Identical sales crept ahead 1.4% year over year while net income plummeted 42%, to almost $241 million.
- Strong growth in pharmacy sales helped fuel the identical sales growth, Albertsons noted.
Dive Insight:
Albertsons CEO Vivek Sankaran said in a statement that the grocery company saw “outsized growth” in its digital and pharmacy businesses yet expects to continue to see several headwinds in the months ahead. Those include higher worker wages and benefits, lower margins from its pharmacy and digital businesses and the cycling of food inflation seen last year.
Still, Albertsons remained optimistic that its ongoing productivity initiatives will help offset these headwinds, Sankaran said.
During Q1, the company spent more on operating expenses related to the development of its digital and omnichannel capabilities, its proposed merger with Kroger, employee costs, store occupancy costs and third-party store security services.
Albertsons completed 17 remodels and opened one new store during Q1. Digital sales jumped 23%, with e-commerce costs increasing due to the heightened sales, the company said.
The grocer’s base of loyalty members increased by 15% to 41.4 million. In April, Albertsons announced a streamlining of its loyalty program to simplify how members can accumulate points and redeem them.
“We continued to drive strong year-over-year growth in loyalty members as we launched our new simplified 'for U' loyalty program,” Sankaran said in the statement.
Albertsons did not hold an earnings call or issue financial guidance due to the company’s planned merger with Kroger. The grocer is gearing up to defend the merger during state and federal court dates in the coming weeks.
