Albertsons Reports First Quarter 2022 Results

Boise-based Albertsons Companies saw sales rise and beat Wall Street estimates in its latest quarter.

The retail giant, which operates nearly 2,300 stores across the country, saw identical sales rise 6.8% from the same period a year ago. Identical sales compare stores that were open last year and this year, but do not include newly opened stores. It helps provide an “apples to apples” sales comparison.

Albertsons said net sales and revenue reached $23.3 billion in the quarter, compared with $21.3 billion a year ago.

“In the first quarter, our teams continued to deliver strong operational and financial performance across all key metrics, and we continued to gain market share,” said Albertsons CEO Vivek Sankaran.

Thoms Reuters polled analysts who thought Albertsons would report earnings of $0.92 per share, but the company actually reported adjusted earnings of $1 per share. This means that the company exceeded estimates by around eight percent.

The company’s chief financial officer, Sharon McCollam, said the company had “momentum” and was seeing market share gains. McCollam said the company is raising its outlook for the current second quarter due to strength. Albertsons executives believe they will see a 3-4% increase in sales from these identical stores for the whole of fiscal 2022.

Customer models continue to change

Sankaran said Albertsons’ stores have seen an increase in customers and many customers continue to eat at home, which has boosted sales. He cited higher restaurant prices, combined with an increase in the number of Americans working from home, has helped push up grocery store spending. Sankaran said sales of lunch items have increased, along with ingredients for dinners and more.

He said inflationary pressure is causing consumers to “bargain”, especially on staples like rice, beans, cooking oils, etc., but “the good news is that they are sell to many of our own brands. This includes store brands like Signature Select. Albertsons said store brands accounted for 25.8% of sales.

“We are seeing this phenomenon where customers are value conscious but are willing to spend on things that are important to them,” Sankaran said, listing examples of some customers buying premium beer while others buying cheaper beer, or a customer buying a bag of avocados instead of just one avocado. “If someone wants top of the line, we have it. If anyone wants an opening price, we have it in our stores. This combination works well for us.

Sankaran said the company is working to gain market share not only from other grocers but also from restaurants, and being able to offer a variety of price points helps that goal.

Strategic Review

Albertsons also said its strategic review, launched in February, is continuing. He said he completed a real estate appraisal, which revealed the property he owns is valued at $13.7 billion, up about $2.5 billion from 2019. As BoiseDev reported reported in June, the company hinted that real estate valuation could be a key factor in the review. But, Albertsons said the review is ongoing and there can “be no assurance that the review of strategic alternatives will result in a transaction or other strategic change or outcome.” McCollam said they “understand the strategic value” of real estate and did not indicate whether he might try to separate ownership from the rest of the business.

Albertsons operates stores under its own name, as well as Safeway, Vons, Jewel, Acme, United Supermarkets and over a dozen other brands.

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