Albertsons stock fell sharply on Thursday following a significant reduction in the company’s full-year financial guidance. The grocer attributed the outlook cut to softer industry trends and more cautious consumer spending patterns in the broader grocery market.
The company reported that its digital and pharmacy divisions continued to grow strongly in the first quarter, but core grocery operations faced mounting headwinds. Management cited food inflation and budgetary constraints stemming from elevated gas prices as factors contributing to reduced consumer spending on groceries. For the full fiscal year, the company now expects net income between $1.75 and $1.85 per share, down from a prior projection of $2.22 to $2.32 per share. Adjusted EBITDA guidance was lowered to a range of $3.55 billion to $3.625 billion from a previous estimate of $3.85 billion to $3.925 billion.
In the first fiscal quarter, Albertsons reported identical sales fell 0.8%, and net income declined to $84.7 million, or 17 cents per share, compared with $236.4 million, or 41 cents per share, in the prior-year quarter. The company now expects full-year identical sales to decline between 1.5% and 0.5%, a reversal from its prior expectation of flat to up 1% growth.
Despite the near-term earnings pressure, Chief Executive Officer Susan Morris stated that the company intends to invest decisively in customer experience as a means to improve its growth prospects. Management indicated on an analyst call that it aims to boost traffic, units, and loyalty metrics while working to improve the overall business trajectory over time.
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