Dive Brief:
- Albertsons’ financial performance during the fourth quarter of fiscal 2022 topped analysts’ expectations, as revenue rose 5.1% year-over-year, to $18.3 billion.
- Identical sales were up 5.6% during Q4 compared with the fourth quarter of 2021, but net income fell to $311.1 million during the period, a 31.6% year-over-year decline.
- Albertsons is preparing for “a more difficult consumer environment” during fiscal 2023 and expects labor costs and inflation to pose challenges as the year unfolds, CEO Vivek Sankaran said in a statement.
Dive Insight:
Albertsons is looking ahead at what Sankaran described as an uncertain economic backdrop as the supermarket chain presses ahead with plans to merge with Kroger.
The company believes conditions will become “more challenging” later in 2023, Sankaran said, adding that Albertsons expects growth in its core business and its ongoing productivity initiatives to partially blunt the headwinds it faces. Albertsons also predicted it will be affected by declines in COVID-19 vaccination and sales of at-home test kits.
For all of fiscal 2022, which ended Feb. 25, Albertsons brought in revenue of $77.7 billion, up 8% compared with the previous year. Identical sales rose 6.9% year-over-year, and net income came in at $1.5 billion, down from $1.6 billion in fiscal 2021. Albertsons saw digital sales rise 16% in Q4 and 28% for all of 2022.
The company’s identical sales increase during Q4 stemmed in part from inflation, increasing pharmacy sales and the growing e-commerce penetration, Albertsons said.
“As we look ahead to fiscal 2023, we believe we are well-positioned to drive top-line growth by deepening relationships with our customers even as inflation continues,” Sankaran said in Albertsons’ earnings release.
Albertsons has recently announced steps to boost its connections with shoppers. In March, the company started an omnichannel marketing campaign known as “Sincerely, Food,” in an effort to encourage customers to link products they buy from the grocer with special moments in their lives. Albertsons rolled out an online platform designed to help people make choices related to nutrition and health in February.
Albertsons did not provide an update on its plans to combine with Kroger in its latest quarterly report, but the grocery chains are facing sharp opposition to their proposed merger as they look to gain regulatory approval for the $24.6 billion transaction. Workers at dozens of supermarkets the companies operate participated in union-organized protests against the planned merger last week, the latest reflection of the opposition Albertsons and Kroger face as they seek to create a nationwide supermarket powerhouse.
