Albertsons withdraws annual forecast despite adjusted earnings beat at 36 cents
Key Facts
Albertsons withdrew its annual forecast pending completion of a comprehensive business review, despite adjusted earnings beating analysts' expectations, in results the grocery chain announced on October 13, 2026. Adjusted earnings came in at 36 cents per share, against expectations of 33 cents, according to London Stock Exchange Group data cited by Reuters in its coverage of the announcement. The decision to suspend guidance coincided with a review that Chief Executive Susan Morris said aimed to address the "cost structure," according to the company's statement filed with the U.S. Securities and Exchange Commission. The reported results cover a 12-week fiscal period ended September 12, 2026. The earnings beat thus accompanied management's decision to stop providing guidance for the year until it completes its business review.
Net sales and other revenue for the quarter totaled $18,894.7 million, according to the company's official earnings statement. Albertsons reported net income of $51.5 million for the same period, while adjusted earnings before interest, taxes, depreciation and amortization totaled $784.0 million. On financing costs, quarterly net interest expense was $125.0 million, according to the filing. Identical sales fell 0.8% from the corresponding period a year earlier, as pressure on the grocery chain's business persisted. The decline in store sales activity came alongside growth in the digital sales channel, which recorded a year-over-year increase during the same fiscal period.
Digital sales grew 11% from a year earlier, according to Albertsons' statement, moving in the opposite direction to the quarter's decline in identical sales. But the expansion in digital orders brought higher delivery costs, among the pressures the company cited in discussing its gross margin performance. Those expenses also included handling costs associated with digital sales growth, according to the official statement. Gross margin for the quarter was 26.8%, amid those costs of fulfilling and delivering orders. The company attributed part of the margin pressure to those expenses, as identical sales activity declined despite the increase in digital sales.
Albertsons faces cautious consumer spending, according to Reuters, amid competition for grocery purchases and the company's market share. That caution is particularly evident among lower-income consumers, whose spending pressures the agency highlighted in its coverage of the chain's results. At the same time, the company is losing market share to competitors including Walmart, according to Reuters. Competition also includes discount chains, alongside private-label brands that the agency cited among the challenges facing the business. Albertsons' review of its cost structure comes against this backdrop, with identical sales declining and caution among a segment of shoppers on whom the grocery business depends.
In the market, Albertsons shares rose 2% during the session on the day results were announced, according to Reuters' coverage dated that day. The stock thus reversed losses recorded in premarket trading, the agency said. The turn higher came on a day that brought investors an adjusted earnings beat alongside the announcement that annual guidance was being suspended. The company had tied the suspension of that guidance to completion of the comprehensive business review, according to its official statement. The stock's reaction also coincided with results showing a divergence between digital sales growth and declining identical sales, as well as pressure on margins from delivery and handling costs.
Albertsons expects to complete the business review during its final fiscal quarter ending in February 2027, according to Reuters, setting the announced timetable for completing the process. The company plans to provide an updated financial framework by that quarter's earnings call, according to the official earnings statement. It also plans to present a comprehensive turnaround plan by the same call, following the review addressing its cost structure. On cash dividends, the company announced that its next payout would be $0.17 per share, according to the filing. It set the payment date for November 6, 2026, before the end of the quarter during which it expects to complete its business review and present the financial framework and turnaround plan.