Albertsons Pulls Its 2026 Outlook as Profit Falls and a Cost Review Begins

Keypoints:

• Second-quarter net income fell to $51.5 million from $168.5 million a year earlier
• Identical sales declined 0.8%, while digital sales grew 11%
• Albertsons suspended its fiscal 2026 outlook until a business review ends in the fourth quarter
• Adjusted earnings of $0.36 per share beat analyst estimates of $0.33
• Bank of America downgraded the stock to Underperform and cut its price target to $12

Albertsons Companies reported fiscal second-quarter results on Tuesday, 13 October. The numbers were mixed. Adjusted earnings beat estimates, but net income dropped about 69% to $51.5 million. Net sales slipped 0.1% to $18.89 billion for the 12 weeks ended 12 September.

The company then pulled its full-year outlook. It will not give a new forecast until a comprehensive business review ends in the fourth quarter. Chief executive Susan Morris said results do not reflect the company's potential. She said Albertsons must tackle a cost structure it can no longer afford.

The weak spots are clear. Identical sales, which compare the same stores over time, fell 0.8%. Operating income dropped to $174.5 million from $295.3 million. Higher delivery and handling costs from digital growth, plus increased shrink, weighed on gross margin. Adjusted earnings before interest, taxes, depreciation and amortization fell to $784 million from $848.4 million.

There are bright spots. Digital sales rose 11%, and pharmacy sales kept expanding despite pricing pressure from the Inflation Reduction Act. The review builds on a July reorganization called ACI Edge. It merged 11 divisions into four regions and centralized center-store merchandising. Albertsons operates 2,240 stores, including 1,709 pharmacies.

Shareholder returns continue, though at a lower pace. The company repurchased 26 million shares for $387.6 million in the first 28 weeks, compared with $550.1 million a year earlier. A quarterly dividend of $0.17 will be paid on 6 November.

Analysts are cautious. Bank of America cut its target to $12 from $16. RBC Capital Markets said withdrawing guidance usually widens the range of possible earnings outcomes. That tends to raise the risk investor's price into a stock. Albertsons plans to present a turnaround plan and new financial targets with fourth-quarter results, then hold an investor day in spring 2027.