Why Is Grocery Giant Albertsons' Stock Price Shrinking Today?

Albertsons Companies Inc ACI shares are trading lower in premarket on Tuesday after the fourth-quarter earnings result.

The company reported fourth-quarter FY24 sales growth of 2.5% year-on-year to $18.8 billion, beating the analyst consensus estimate of $18.79 billion.

The increase was driven by 2.3% increase in identical sales, with strong growth in pharmacy sales being the primary driver of the identical sales increase. Digital sales improved 24%.

Gross margin rate contracted 60 basis points to 27.4%. The operating margin was 1.5%, and operating income for the quarter declined 35% to $276 million.

Adjusted EBITDA of $855.1 million decreased 6.6% Y/Y. Adjusted EPS of 46 cents beat the consensus estimate of 40 cents.

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The grocery store giant held $293.6 million in cash and equivalents as of Feb. 22. Operating cash flow for 12 months totaled $2.68 billion.

Today, it announced the next quarterly dividend payment of 15 cents per share to be paid on May 9 to stockholders of record as of the close of business on April 25, 2025.

In the fourth-quarter, Albertsons repurchased an aggregate of 4.1 million shares of common stock for a total of $82.5 million.

Total debt, including finance leases, was $7.84 billion for the fiscal 2024. Net debt ratio was 1.88.

Albertsons CEO Vivek Sankaran highlighted continued investment in the company’s “Customers for Life” strategy.

Outlook: Albertsons anticipates FY25 adjusted EPS of $2.03 – 2.16 versus an estimate of $2.28.

ACI expects FY25 identical sales growth of 1.5% – 2.5%. 

The Boise, Idaho-based company expects FY25 capital expenditures of $1.7 billion to $1.9 billion.

Price Action: ACI shares traded lower by 6.12% at $20.25 at last check Tuesday.

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