Boise, Idaho, U.S.A.-based Albertsons reported an increase in sales in Q3 2024 and a slightly higher profit outlook for FY 2024.
The grocery chain reported an increase in identical store sales of 2 percent and a significant jump in digital sales of 23 percent. Overall, net sales and other revenue increased 1.2 percent to nearly USD 18.8 billion (EUR 18.2 billion) for the quarter ending 30 November, up from USD 18.5 billion (EUR 17.9 million) it posted during the same period of 2023.
"We delivered solid operating and financial performance in the third quarter of fiscal 2024 in an environment where the consumer remains cautious," Albertsons CEO Vivek Sankaran said, attributing the strong results to investments in its Customers for Life strategy. The initiative drove increased digital engagement across its platforms, growth in pharmacy operations, and membership in its loyalty program, according to the company.
Albertsons' adjusted EBITDA fell slightly to USD 1.065 billion (EUR 1.03 billion), or 5.7 percent of net sales and other revenue, during the third quarter versus approximately USD 1.1 billion (EUR 1.07 billion), or 6 percent of net sales, in the third quarter of 2023.
Albertsons slightly lowered its identical sales growth forecast for fiscal 2024 from between 1.8 percent and 2.2 percent to 1.8 percent and 2 percent. However, it slightly raised its adjusted EBITDA forecast from between USD 3.9 billion (EUR 3.8 billion) and USD 3.98 billion (EUR 3.86 billion) to between USD 3.95 billion (EUR 3.8 billion) and USD 3.99 billion (EUR 3.87 billion).
"As we look ahead to the balance of fiscal 2024 and beyond, we are energized about our plans to accelerate growth through our Customers for Life strategy, leveraging investments to enhance digital engagement and omnichannel revenue growth, improve our value proposition with customers, and drive digital media growth,” Sankaran said. "At the same time, we expect our robust productivity agenda to provide fuel to invest in the business.”
The company posted the solid performance in the wake of terminating its merger plan with Kroger and suing the grocery chain after U.S. District Judge Adrienne Nelson issued a temporary injunction against the merger on 10 December. Soon after Albertsons announced it was terminating the USD 26.5 billion (EUR 25.7 billion) merger, claiming Kroger failed to take sufficient action to secure regulatory approvals.
Albertsons is now seeking USD 600 million (EUR 582 million) as a termination fee, which it said Kroger is obligated to pay under the merger agreement.
Albertsons first entered the merger agreement in October 2022 but quickly faced opposition from entities like the Center for Science in the Public Interest and from officials in multiple U.S. states. Analysts predicted the seafood industry could have seen negative impacts from the merger as competition decreased.
In related news, Albertsons launched its Third Annual Albertsons Companies Innovation Launchpad competition to find “emerging and innovative brands representing food, beverage and pet products,” the company said.
Albertsons is encouraging independent food brands with net retail sales of between USD 3 million (EUR 2.9 million) and USD 10 million (EUR 9.7 million) to apply for the opportunity to compete live at Natural Products Expo West in Anaheim, California, U.S.A., on 4 March. The deadline to apply is 19 January.
Albertsons is seeking products that focus on protein solutions, healthy meal solutions, global flavors, and premium pet items.
The top three winners will receive prizes valued at more than USD 300,000 (EUR 291,000) total, including cash and industry services and will be considered for distribution in Albertsons Cos. banner stores.
“The Albertsons Innovation Launchpad is an exciting platform that brings new and emerging brands closer to our customers,” Albertsons Executive Vice President of Merchandising and Chief Digital Officer Omer Gajial said. “Since the competition began in 2022, we have received an overwhelming response from entrepreneurs eager to showcase their products.”
