Albertsons Companies Inc (ACI, Financial) released its earnings report for the second quarter of fiscal 2023 on October 17, 2023. The company reported a net income of $267 million, or $0.46 per share, and an adjusted net income of $368 million, or $0.63 per share. The company's adjusted EBITDA for the quarter was $977 million.
Company Performance and Financial Highlights
ACI's net sales and other revenue for the 12 weeks ended September 9, 2023, was $18.3 billion, up from $17.9 billion in the same period last year. The increase was primarily driven by a 2.9% increase in identical sales, strong growth in pharmacy sales, and a 19% increase in digital sales. However, the increase in net sales and other revenue was partially offset by lower fuel sales.
The company's gross margin rate decreased to 27.6% during the second quarter of fiscal 2023, compared to 27.9% during the same period last year. Selling and administrative expenses increased to 25.1% of net sales and other revenue during the second quarter of fiscal 2023, compared to 25.0% during the same period last year.
CEO Commentary
During the second quarter, we continued to execute against our Customers for Life transformation strategy and drive solid operating results, despite increasing macro-economic headwinds. We want to thank all our teams for their commitment to our customers and communities," said Vivek Sankaran, CEO of Albertsons Companies Inc.
Future Outlook
Looking ahead, the company expects to face challenges such as declining federal and state government assistance, higher interest rates, slowing food inflation, ongoing labor investment, broad inflationary cost increases, and significant declines in COVID-19 vaccination and test kit revenue. However, the company plans to offset these headwinds with the benefits of its productivity initiatives.
Merger Agreement with The Kroger Company
On October 13, 2022, ACI entered into a Merger Agreement with The Kroger Company. Under the terms of the agreement, Kroger will acquire all of the outstanding shares of ACI's common stock for a total consideration of $34.10 per share.
About Albertsons Companies Inc
Albertsons Companies Inc is a leading food and drug retailer in the United States. As of September 9, 2023, the company operated 2,272 retail food and drug stores with 1,726 pharmacies, 401 associated fuel centers, 22 dedicated distribution centers, and 19 manufacturing facilities. The company operates stores across 34 states and the District of Columbia with 24 banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs, Kings Food Markets, and Balducci's Food Lovers Market.
