Digital Sales Growth Boost Albertsons Q1 Results
First quarter sales at Albertsons were up slightly as the grocer reported gains in digital sales and a jump in its loyalty program membership.
For the 16 weeks ended June 15, net sales and other revenue was $24.3 billion compared to net sales and other revenue of $24.1 billion during the comparable period the previous year. The increase was driven by the company's 1.4% increase in identical sales, with strong growth in pharmacy sales driving the identical sales increase. Digital sales during the period were up 23% and loyalty members increased 15% to 41.4 million.
Net income was $240.7 million, or $0.41 per share, during the first quarter of fiscal 2024, compared with net income of $417.2 million, or $0.72 per share, during the first quarter of fiscal 2023.
During the first 16 weeks of fiscal 2024, capital expenditures were $543.0 million, which primarily included the completion of 17 remodels, the opening of one new store, and continued investment in the company’s digital and technology platforms.
"In the first quarter of fiscal 2024, we continued to invest in our Customers for Life strategy and the digital and omnichannel capabilities necessary to support it," said Vivek Sankaran, Albertsons’ CEO. "Our Customers for Life strategy is placing the customer at the center of everything we do, and we continued to drive strong year-over-year growth in loyalty members as we launched our new simplified 'for U' loyalty program. Amidst an evolving economic and industry backdrop, we continued to deliver outsized growth in our digital and pharmacy businesses."
Looking ahead, Sankaran said Albertsons expects to see continuing headwinds related to investments in associate wages and benefits, an increasing mix of its pharmacy and digital businesses, which carry lower margins, and the cycling of prior year food inflation. He expects these headwinds to be partially offset by ongoing productivity initiatives.
As of June 15, 2024, the company operated 2,269 retail food and drug stores with 1,725 pharmacies, 403 associated fuel centers, 22 dedicated distribution centers, and 19 manufacturing facilities.
