Albertsons cuts sales view as grocery shoppers grow cautious

Albertsons expects sales to fall this year after its core grocery business struggled in the most recent quarter due to a more cautious consumer.

“While these results did not meet our expectations, they underscored the need to move faster,” Chief Executive Susan Morris said.

As a result, the company is pulling ahead some of its investments for its strategic plan so it can execute it more quickly. The goal is to improve value and customer experience to bring back more cautious shoppers.

Shares slid 15% to $12.48 in premarket trading Thursday.

For the year, the grocery store chain expects identical sales to fall 0.5% to 1.5%, compared with a prior expectation that annual sales would be flat to up 1%.

Adjusted earnings per share are now projected to be $1.75 to $1.85, down from $2.22 to $2.32 previously.

Quarterly profit fell to $84.7 million, or 17 cents a share, compared with $236.4 million, or 41 cents a share, a year earlier.

Stripping out certain one-time items, adjusted per-share earnings were 42 cents, below the 54 cents anticipated by analysts, according to FactSet.

Revenue rose less than 1% to $24.94 billion. Analysts surveyed by FactSet had forecast revenue of $24.83 billion. While pharmacy and digital sales were strong, identical sales–which encompass in-store revenue–fell 0.8%.

As part of its accelerated plan, Albertsons is consolidating its 11 divisions into four geographical regions in an effort to simplify its operating structure. The regions cover eastern, western and southern markets, as well as a market dedicated to California.

The company doesn’t plan to restructure stores and will maintain its core brands.

Separately, Albertsons said its number-two executive, Sharon McCollam, is retiring later this year.

McCollam, who joined the Boise, Idaho, company as president and chief financial officer in September 2021, will remain in her post until a successor is in place. She will stay on as an adviser through the end of the fiscal year in February 2027 to assist with the transition.

Write to Katherine Hamilton at [email protected]