Identical Sales, E-Commerce Boost Albertsons Q4 Results
It’s been a few months since the Kroger/Albertsons merger fell through, but in that time, Albertsons has gotten its mojo back, according to the grocer’s outgoing CEO Vivek Sankaran.
His comments came during Albertsons investor conference call to discuss fourth quarter and full-year results.
“We are executing once again like we used to, and we have proof points and therefore more conviction to say that our strategy is right and working,” he said.
As Sankaran passes the CEO baton to current Chief Operating Officer Susan Morris, who will officially take the top spot on May 1, the transition comes as the Boise, Idaho-based company reported revenue gains in its fourth quarter, driven in part by double-digit growth in e-commerce sales.
For the quarter ended February 22, net sales and other revenue were $18.8 billion, up from net sales and other revenue of $18.3 billion in the comparable quarter of the previous year. According to the company, the growth was driven by a 2.3% increase in identical sales, with strong growth in pharmacy sales being the primary driver of the identical sales increase. Digital sales grew 24% during the fourth quarter.
Net income in the fourth quarter was $171.8 million, or $0.29 per share, compared to $250.5 million, or $0.43 per share, during the fourth quarter of fiscal 2023.
For the full fiscal year, net sales and other revenue were $80.4 billion, up from net sales and revenue of $79.2 billion in the prior fiscal year. Net income for the year was $958.6 million, or $1.64 per share, down from net income of $1.3 billion, or $2.23 per share, in the prior fiscal year.
“As we look forward to fiscal 2025 and beyond, we are excited about the investments we have made in our core business, including the growth opportunity inherent in our digital platforms working together to generate deeper engagement, increased digital inventory, and acceleration of growth in the Albertsons Media Collective,” Morris said. “While fiscal 2025 will be an investment year, beginning in fiscal 2026, we expect to drive growth consistent with our long-term algorithm of 2+% identical sales and Adjusted EBITDA growth higher than identical sales growth."
Morris noted that the growth in digital sales at Albertsons during the fourth quarter has expanded its e-commerce penetration rate to more than 8% of grocery revenue, with top-performing markets at more than 10%.
“This growth is driven by award-winning experiences in our fully integrated mobile app and the success of our five-star certification program,” she said. “E-commerce penetration is still below our industry peers and is one of our biggest growth, customer acquisition, and customer retention opportunities for 2025 and beyond.”
Morris said Albertsons is also attuned to the ongoing economic pressures impacting its customers that have elevated their need for value. The grocer, she said, is working with vendor partners to strategically invest in price in certain categories and certain markets while also enhancing the breadth of its loyalty offerings to provide immediate savings and greater value.
Additionally, Albertsons is also amplifying the presence of its own brand assortment to drive profitable unit growth and increase share of wallet.
“We will increase innovation, more prominently feature existing owned brands, and offer products at attractive entry price points,” Morris said. “We ended Q4 with sales penetration of 25.4% and believe with increased exposure and new product launches, we can increase our penetration to at least 30%.”
During the fourth quarter, Albertsons launched new items in its Open Nature Cauliflower Pizza line and the Signature Select ice cream assortment. Other launches included the Burst of Flavor campaign, which was met with strong customer response.
