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Albertsons' Q1 revenues rose 2.5% to $24.88B; EPS declined 16.7% to 55 cents.
Identical sales climbed 2.8%, driven by pharmacy, digital and loyalty program strength.
Gross margin slipped 70 bps to 27.1% on higher costs and investments in growth.
Albertsons Companies, Inc. (ACI - Free Report) reported first-quarter fiscal 2025 results, wherein both the sales and earnings surpassed the Zacks Consensus Estimate. Additionally, on a year-over-year basis, the company’s top line increased, while the bottom line declined.
In the first quarter of fiscal 2025, Albertsons saw an increase in identical sales, driven by growth in pharmacy, digital platforms and loyalty programs. The company continued to enhance its customer value proposition, modernize operations through technology and productivity initiatives, and invest in store upgrades, own brands and efficiency to support long-term growth and stronger customer engagement.
Albertsons Companies, Inc. Price, Consensus and EPS Surprise
Albertsons posted adjusted quarterly earnings of 55 cents per share, which surpassed the Zacks Consensus Estimate of 53 cents. However, the bottom line declined 16.7% from 66 cents per share reported in the prior-year period. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Net sales and other revenues of $24,880.8 million were above the Zacks Consensus Estimate of $24,719 million and rose 2.5% year over year. The year-over-year increase in the top line stemmed from a 2.8% increase in identical sales, with a 20% increase in pharmacy sales serving as the main contributor. Digital sales grew 25%, driven by strong growth in first-party sales. These gains in net sales and other revenues were partially offset by a decline in fuel sales.
Loyalty membership grew 14% to reach 47.3 million in the first quarter of fiscal 2025 compared with the same period in fiscal 2024.
Insight Into ACI's Q1 Margins & Expenses
The gross profit of $6.74 billion remained flat year over year. However, the gross margin for the quarter under review contracted 70 basis points (bps) year over year to 27.1% compared with 27.8% in the first quarter of fiscal 2024.
Excluding the impact of fuel and LIFO expense, the gross margin decreased 85 bps year over year. The decrease was primarily attributable to incremental investments in the customer value proposition, strong growth in pharmacy sales — which carry a lower gross margin — and higher delivery and handling costs associated with the continued expansion of digital sales. These factors were partially offset by productivity improvements, including reductions in shrinkage expense.
In the fiscal first quarter, selling and administrative expenses jumped 0.7% to $6.32 billion and declined 50 bps year over year at 25.4% as a percentage of net sales and other revenues. Excluding the impact of fuel, selling and administrative expenses as a percentage of net sales and other revenues decreased 63 bps. This improvement was primarily driven by lower merger-related costs, as well as the leveraging of employee and operating expenses associated with the ongoing development of digital platforms and modernization of technology. These reductions were partially offset by higher legal, professional and outside services expenses, along with business transformation costs. Productivity initiatives continued to mitigate the impact of rising wage rates and other inflationary pressures on operating expenses.
Adjusted EBITDA declined 6.2% year over year to $1.11 billion, while the adjusted EBITDA margin was 4.5%, down 40 bps year over year.
ACI’s Q1 Financial Snapshot
Albertsons ended the quarter with cash and cash equivalents of $151 million. The company’s long-term debt and finance-lease obligations totaled $7.01 billion as of June 14, 2025, while total stockholders' equity amounted to $3.22 billion.
Capital expenditures totaled $584.6 million during the first quarter of fiscal 2025, primarily reflecting the completion of 36 remodels, the opening of three new stores and continued investments in digital and technology platforms. Capital expenditures are forecasted to be in the range of $1.7-$1.9 billion in fiscal 2025.
The company paid a quarterly dividend of 15 cents per share on May 9, 2025, to its stockholders of record as of April 25 and on July 15 announced the next quarterly dividend of 15 cents per share, payable on Aug. 8, 2025, to its stockholders of record at the close of business on July 25, 2025.
In addition, during the first quarter of fiscal 2025, ACI repurchased 14.2 million shares of common stock for a total of $314.8 million under the existing multi-year $2 billion repurchase authorization.
ACI Stock Past Three-Month Performance
Image Source: Zacks Investment Research
Sneak Peek Into Albertsons’ FY25 Outlook
The company has updated its fiscal 2025 outlook and now expects identical sales growth in the range of 2.0-2.75% compared with the previous guidance of 1.5-2.5%.
Adjusted EBITDA is projected to be between $3.8 billion and $3.9 billion, including approximately $65 million related to the 53rd week. In fiscal 2024, adjusted EBITDA was $4 billion.
Adjusted earnings per share are expected to be in the range of $2.03-$2.16, including an estimated three cents per share impact from the 53rd week. The company reported adjusted earnings of $2.34 per share in fiscal 2024.
Shares of this Zacks Rank #4 (Sell) company have dropped 3.2% in the past three months compared with the industry's decline of 7.4%.
Three Picks You Can’t Miss
Here, we have highlighted three better-ranked stocks, namely, Grocery Outlet Holding Corp. (GO - Free Report) , BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) and Colgate-Palmolive (CL - Free Report) .
Grocery Outlet is a high-growth, extreme-value retailer of quality, name-brand consumables and fresh products. It currently sports a Zacks Rank #1 (Strong Buy). GO has a trailing four-quarter average earnings surprise of 25.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales and earnings implies growth of 7.9% and a decline of 3.9%, respectively, from the year-ago reported numbers.
BJ's Wholesale Club has emerged as one of the preferred destinations for shoppers when it comes to essentials and other items and currently carries a Zacks Rank #2 (Buy). BJ has a trailing four-quarter earnings surprise of 17.7%, on average.
The Zacks Consensus Estimate for BJ's Wholesale Club’s current fiscal-year sales and earnings indicates a rise of around 5.5% and 6.2%, respectively, from the year-earlier levels.
Colgate-Palmolive, which manufactures and sells consumer products, currently carries a Zacks Rank of 2. CL delivered an earnings surprise of 4% in the trailing four quarters, on average.
The Zacks Consensus Estimate for Colgate-Palmolive’s current fiscal-year sales and earnings implies growth of 0.9% and nearly 1.7%, respectively, from the year-ago reported quarter.
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Albertsons' Q1 Earnings Beat Estimates, Identical Sales Rise 2.8% Y/Y
Key Takeaways
Albertsons Companies, Inc. (ACI - Free Report) reported first-quarter fiscal 2025 results, wherein both the sales and earnings surpassed the Zacks Consensus Estimate. Additionally, on a year-over-year basis, the company’s top line increased, while the bottom line declined.
In the first quarter of fiscal 2025, Albertsons saw an increase in identical sales, driven by growth in pharmacy, digital platforms and loyalty programs. The company continued to enhance its customer value proposition, modernize operations through technology and productivity initiatives, and invest in store upgrades, own brands and efficiency to support long-term growth and stronger customer engagement.
Albertsons Companies, Inc. Price, Consensus and EPS Surprise
Albertsons Companies, Inc. price-consensus-eps-surprise-chart | Albertsons Companies, Inc. Quote
Albertsons’ Quarterly Performance: Key Insights
Albertsons posted adjusted quarterly earnings of 55 cents per share, which surpassed the Zacks Consensus Estimate of 53 cents. However, the bottom line declined 16.7% from 66 cents per share reported in the prior-year period. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Net sales and other revenues of $24,880.8 million were above the Zacks Consensus Estimate of $24,719 million and rose 2.5% year over year. The year-over-year increase in the top line stemmed from a 2.8% increase in identical sales, with a 20% increase in pharmacy sales serving as the main contributor. Digital sales grew 25%, driven by strong growth in first-party sales. These gains in net sales and other revenues were partially offset by a decline in fuel sales.
Loyalty membership grew 14% to reach 47.3 million in the first quarter of fiscal 2025 compared with the same period in fiscal 2024.
Insight Into ACI's Q1 Margins & Expenses
The gross profit of $6.74 billion remained flat year over year. However, the gross margin for the quarter under review contracted 70 basis points (bps) year over year to 27.1% compared with 27.8% in the first quarter of fiscal 2024.
Excluding the impact of fuel and LIFO expense, the gross margin decreased 85 bps year over year. The decrease was primarily attributable to incremental investments in the customer value proposition, strong growth in pharmacy sales — which carry a lower gross margin — and higher delivery and handling costs associated with the continued expansion of digital sales. These factors were partially offset by productivity improvements, including reductions in shrinkage expense.
In the fiscal first quarter, selling and administrative expenses jumped 0.7% to $6.32 billion and declined 50 bps year over year at 25.4% as a percentage of net sales and other revenues. Excluding the impact of fuel, selling and administrative expenses as a percentage of net sales and other revenues decreased 63 bps. This improvement was primarily driven by lower merger-related costs, as well as the leveraging of employee and operating expenses associated with the ongoing development of digital platforms and modernization of technology. These reductions were partially offset by higher legal, professional and outside services expenses, along with business transformation costs. Productivity initiatives continued to mitigate the impact of rising wage rates and other inflationary pressures on operating expenses.
Adjusted EBITDA declined 6.2% year over year to $1.11 billion, while the adjusted EBITDA margin was 4.5%, down 40 bps year over year.
ACI’s Q1 Financial Snapshot
Albertsons ended the quarter with cash and cash equivalents of $151 million. The company’s long-term debt and finance-lease obligations totaled $7.01 billion as of June 14, 2025, while total stockholders' equity amounted to $3.22 billion.
Capital expenditures totaled $584.6 million during the first quarter of fiscal 2025, primarily reflecting the completion of 36 remodels, the opening of three new stores and continued investments in digital and technology platforms. Capital expenditures are forecasted to be in the range of $1.7-$1.9 billion in fiscal 2025.
The company paid a quarterly dividend of 15 cents per share on May 9, 2025, to its stockholders of record as of April 25 and on July 15 announced the next quarterly dividend of 15 cents per share, payable on Aug. 8, 2025, to its stockholders of record at the close of business on July 25, 2025.
In addition, during the first quarter of fiscal 2025, ACI repurchased 14.2 million shares of common stock for a total of $314.8 million under the existing multi-year $2 billion repurchase authorization.
ACI Stock Past Three-Month Performance
Image Source: Zacks Investment Research
Sneak Peek Into Albertsons’ FY25 Outlook
The company has updated its fiscal 2025 outlook and now expects identical sales growth in the range of 2.0-2.75% compared with the previous guidance of 1.5-2.5%.
Adjusted EBITDA is projected to be between $3.8 billion and $3.9 billion, including approximately $65 million related to the 53rd week. In fiscal 2024, adjusted EBITDA was $4 billion.
Adjusted earnings per share are expected to be in the range of $2.03-$2.16, including an estimated three cents per share impact from the 53rd week. The company reported adjusted earnings of $2.34 per share in fiscal 2024.
Shares of this Zacks Rank #4 (Sell) company have dropped 3.2% in the past three months compared with the industry's decline of 7.4%.
Three Picks You Can’t Miss
Here, we have highlighted three better-ranked stocks, namely, Grocery Outlet Holding Corp. (GO - Free Report) , BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) and Colgate-Palmolive (CL - Free Report) .
Grocery Outlet is a high-growth, extreme-value retailer of quality, name-brand consumables and fresh products. It currently sports a Zacks Rank #1 (Strong Buy). GO has a trailing four-quarter average earnings surprise of 25.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales and earnings implies growth of 7.9% and a decline of 3.9%, respectively, from the year-ago reported numbers.
BJ's Wholesale Club has emerged as one of the preferred destinations for shoppers when it comes to essentials and other items and currently carries a Zacks Rank #2 (Buy). BJ has a trailing four-quarter earnings surprise of 17.7%, on average.
The Zacks Consensus Estimate for BJ's Wholesale Club’s current fiscal-year sales and earnings indicates a rise of around 5.5% and 6.2%, respectively, from the year-earlier levels.
Colgate-Palmolive, which manufactures and sells consumer products, currently carries a Zacks Rank of 2. CL delivered an earnings surprise of 4% in the trailing four quarters, on average.
The Zacks Consensus Estimate for Colgate-Palmolive’s current fiscal-year sales and earnings implies growth of 0.9% and nearly 1.7%, respectively, from the year-ago reported quarter.