Dive Brief:
- Albertsons posted $18.8 billion in net sales and other revenue during its fourth quarter of fiscal 2024, an increase of about 2.5% compared to the year-ago period, the grocery company said Tuesday.
- Identical sales rose 2.3% during the quarter, an improvement from the 1% comp sales growth Albertsons saw during Q4 of 2023. Net income for Q4 of 2024 fell about 31% year over year, to around $172 million.
- Albertsons expects to see “gradual and incremental improvement in top-line trends” in its grocery business during the second half of fiscal 2025 as investments it is making start to pay off, Susan Morris, the company’s chief operating officer and incoming CEO, said during an earnings call.
Dive Insight:
As Albertsons presses ahead with efforts to strengthen its business following its failed effort to combine with Kroger, the company is focused on sharpening its customer value proposition against a backdrop of strong competition from rivals and uncertainty posed by tariffs.
Albertsons has not seen customer behavior deviate significantly from the value focus observed in recent months. The company has stepped up its promotions and has been working to “surgically” adjust its pricing strategy, said Morris, who is set to assume the role of chief executive from Vivek Sankaran on May 1.
“This is where our work around buying better together and seeking to improve our cost of goods is going to be critical for us as we go throughout 2025 from a competitive perspective,” she said.
Albertsons has been studying factors such as how prices impact customer demand for products as it looks to “make the best decisions that will optimize value for the customer, but also support the sales and margin goals that we’re trying to achieve,” Morris said. The grocer is making pricing changes by category and market because its pricing position varies based on the areas where it operates, she added.
“There are markets where we’re very comfortable with our price position and see very little need to change, and there are others where we have more opportunity,” Morris said. “We feel we have a deep understanding of the elasticity of our customers based off of experiments that we’ve been running over the last several months.”
Morris added that the company has deployed a task force to help understand the impact tariffs could have on its costs
Albertsons expects identical sales for fiscal 2025 to fall in a range of 1.5% to 2.5%, President and CFO Sharon McCollam said during the earnings call. The company’s goal is to maintain a “long-term algorithm” of identical sales that exceed 2% starting in 2026, she said, noting that the projections do not take tariffs and “other potential market dislocations” into account.
Albertsons reported a 24% increase in digital sales in Q4. Morris said e-commerce transactions constituted 8% of the company’s overall sales during the quarter, noting that she aims to improve that figure.
“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.
For all of fiscal 2024, Albertsons saw identical sales rise 2% and digital sales increase 24%. The company’s overall revenue increased by about 1.5% year over year to $80.4 billion, and its net income fell 26%, to $960 million.
Albertsons opened 11 new stores and remodeled 127 other locations in fiscal 2024, McCollam said.
