Albertsons Posts Higher Sales, Lifts Guidance Despite Supply-Chain Costs

Albertsons ACI 1.89% Cos. posted higher sales and raised its guidance for the full year on what it sees as a favorable consumer backdrop, despite logging steeper supply-chain costs for the fiscal second quarter.

The supermarket company, based in Boise, Idaho, posted net sales and other revenue for the three months ended Sept. 11 of $16.51 billion, up 4.7% from the same period last year. That exceeded the $15.86 billion analysts polled by FactSet had expected.

Sales rose partly due to higher fuel sales, the company said Monday.

It posted net income of $295.2 million, compared with $284.5 million in the previous year. Adjusted earnings were 64 cents a share, ahead of Wall Street estimates.

Gross profit margin fell to 28.6% from 29% in the quarter. Excluding the effect of fuel, the metric was flat from the same period last year mainly due to higher product, supply-chain and advertising costs, the company said.

Major food companies have boosted prices as they contend with escalating costs, as well as labor and transportation problems that are hampering the flow of staples to grocery-store shelves. Their supply-chain problems are growing at a time when consumers are spending heavily on food in supermarkets and restaurants. Consumer spending at grocery stores was 4% higher in August than in the same month a year earlier, according to U.S. Census Bureau data.

At the same time, the company also raised its quarterly dividend by 20% to 12 cents a share after taking into account its performance and free cash-flow generation. The company said it would pay the next quarterly dividend of 12 cents a share on Nov. 12.

With food markets on a wild ride lately, cheese has seen more volatility than most. Yet in supermarkets, prices have remained relatively stable. Here’s why sharp changes in wholesale cheese prices are slow to make it to consumers. Illustration: Jacob Reynolds

“We remain committed to a balanced approach to capital allocation, which includes investments to drive future growth, continued deleveraging of the balance sheet, and returning cash to shareholders,” Chief Executive Vivek Sankaran said.

The company said it expects fiscal 2021 adjusted earnings of $2.50 a share to $2.60 a share, compared with its previous outlook of $2.20 a share to $2.30 a share.

Albertsons said it expects identical sales, which includes stores operating during the same period in both the current and prior fiscal years, to fall 2.5% to 3.5% for the year, compared with its previous guidance of down 5% to 6%.

Write to Dave Sebastian at [email protected]