Albertsons Companies Inc. reported $24.3 billion in revenue for the first quarter of 2024 on Tuesday, beating analyst predictions, but the company’s earnings per share of 66 cents came in slightly below expectations. The Boise, Idaho-based company reported an adjusted net income of $392 million for the first quarter, which ended June 15, for the $0.66 per share figure, slightly below analyst expectations of $0.67.
Meanwhile, according to Supermarket News magazine digital sales spiked by 23% for the quarter. The increase in online sales is partly due to a 15% increase in its loyalty program to 41.4 million members. Albertsons Companies’ adjusted EBITDA came in at $1.18 billion for the quarter.
“In the first quarter of fiscal 2024, we continued to invest in our Customers for Life strategy and the digital and omnichannel capabilities necessary to support it,” CEO Vivek Sankaran said in the earnings report. “Our Customers for Life strategy is placing the customer at the center of everything we do, and we continued to drive strong year-over-year growth in loyalty members as we launched our new simplified ‘for U’ loyalty program. Amidst an evolving economic and industry backdrop, we continued to deliver outsized growth in our digital and pharmacy businesses.”
Sankaran said the company anticipates “continuing headwinds related to investments in associate wages and benefits, an increasing mix of our pharmacy and digital businesses which carry lower margins, and the cycling of prior year food inflation. We expect these headwinds to be partially offset by ongoing productivity initiatives,” he concluded.
Albertsons’ gross margin rate increased more than 100 basis points to 27.8% year over year for the quarter. “Excluding the impact of fuel and LIFO expense, gross margin rate decreased 22 basis points compared to the first quarter of fiscal 2023,” the company said. “The strong growth in pharmacy sales, which carries an overall lower gross margin rate, increases in shrink, and increases in picking and delivery costs related to the continued growth in our digital sales were the primary drivers of the decrease, partially offset by our procurement and sourcing productivity initiatives.”
