Albertsons tumbles on earnings miss and slashed guidance

Investing.com -- Albertsons Companies, Inc. (NYSE: ACI) reported first-quarter results that missed analyst expectations and significantly reduced its full-year outlook, citing pressure from softer industry trends and a more cautious consumer.

The grocery chain reported adjusted earnings per share of $0.42 for the first quarter ended June 20, missing the analyst consensus of $0.54 by $0.12. Revenue increased 0.2% YoY to $24.94 billion, slightly above the analyst estimate of $24.83 billion. Identical sales decreased 0.8% during the quarter, while digital sales grew 13% and pharmacy sales continued to expand despite headwinds from the Inflation Reduction Act.

Shares plunged 18.5% premarket following the announcement.

Albertsons now expects adjusted EPS of $1.75 to $1.85, with a midpoint of $1.80 that falls well below the analyst consensus of $2.27. The company also lowered its adjusted EBITDA guidance to a range of $3.550 billion to $3.625 billion from a previous range of $3.850 billion to $3.925 billion.

"While these results did not meet our expectations, they underscored the need to move faster," said Susan Morris, Chief Executive Officer. "Through ACI Edge, we are accelerating change to strengthen our competitiveness and improve execution across the business."

The company announced ACI Edge, a restructuring initiative that consolidates its 11 divisions into four regions and centralizes center-store merchandising.

Gross margin rate decreased to 26.6% from 27.1% in the prior year period, driven by higher delivery and handling costs related to digital sales growth and increased fuel costs. Net income fell to $84.7 million, or $0.17 per share, compared to $236.4 million, or $0.41 per share, in the first quarter of fiscal 2025.

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