Albertsons Companies Inc (NYSE:ACI) reported second-quarter FY23 sales growth of 2% year-on-year to $18.29 billion, marginally beating the analyst consensus estimate of $18.28 billion.
The increase was driven by the company’s 2.9% increase in identical sales, with strong growth in pharmacy sales, a 19% increase in digital sales, and retail price inflation across most categories.
Gross margin rate contracted 30 basis points to 27.6%. The company noted that the strong growth in pharmacy operations, which carries an overall lower gross margin rate, and increases in shrink were the primary drivers of the decrease.
The operating margin was 2.5% and operating income for the quarter fell 14.4% to $454.4 million.
The company held $270.5 million in cash and equivalents as of September 9, 2023. Operating cash flow for the 28 weeks ended September 9, 2023, totaled $1.35 billion.
Adjusted EBITDA of $976.9 million decreased 6.8% Y/Y. Adjusted EPS of $0.63 beat the analyst consensus of $0.56.
The company’s Board has declared a cash dividend for the third quarter of fiscal 2023 of $0.12 per share of common stock, payable on November 14, 2023, to stockholders of record on October 31, 2023.
“As we look ahead to the balance of the year, our focus remains the same – advancing operational excellence in our stores, driving growth in our digital and pharmacy operations, and deepening our relationships with our customers,” said CEO Vivek Sankaran.
“We are also mindful of a more challenging economic backdrop, including declining federal and state government assistance and higher interest rates, and their effects on consumer spending and our business.”
Also Read: Albertsons’ Valuation Depends On Its Potential Merger With Kroger, Says Analyst
Price Action: ACI shares are trading lower by 0.22% at $22.45 on the last check Tuesday.
