Albertsons Surpasses Profit Expectations with Strong Q3 Performance
Albertsons delivers impressive third-quarter earnings, beating profit forecasts despite slight sales shortfall, and updates fiscal 2025 outlook amid merger fallout.
Albertsons (ACI) saw its shares rise on Wednesday morning following the announcement of third-quarter earnings that exceeded analyst predictions, even though sales narrowly missed expectations.
The grocery giant reported a net income of $400.6 million for the quarter, marking an increase from $361.4 million in the same period last year and surpassing the $318.1 million forecasted by analysts, according to Visible Alpha data. Revenue reached $18.77 billion, up from $18.56 billion the previous year, just shy of the $18.8 billion consensus estimate.
CEO Vivek Sankaran highlighted the company's solid performance despite ongoing consumer caution in the market.
Albertsons also raised its fiscal 2024 adjusted earnings per share (EPS) guidance to a range of $2.25 to $2.31, improved from the earlier $2.20 to $2.30 estimate. However, it slightly lowered the upper limit of its same-store sales growth forecast to 2%, down from 2.2% previously.
Post-Kroger Merger Update and Legal Developments
This quarterly report is the first since the termination of the proposed merger with Kroger (KR) last month, following judicial rulings that sided with the Federal Trade Commission (FTC) in blocking the deal over concerns of reduced competition leading to higher prices and lower wages.
Subsequently, Albertsons filed a lawsuit against Kroger, accusing the retailer of failing to take necessary steps, such as divesting stores, to secure regulatory approval. Kroger has denied these allegations. Both companies have resumed their stock buyback programs after pausing them during the merger approval process.
Albertsons shares gained approximately 2% in early trading on Wednesday.
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