Albertsons pulls FY26 guidance to tackle turnaround plan

Shares of Albertsons Companies (ACI) are trading defensively into Tuesday’s open as the grocery chain beat both top- and bottom-line expectations but realized a considerable decline in fiscal second-quarter net income due to higher costs associated with increased digital sales.

The company also did not provide fiscal 2026 guidance pending a comprehensive business review in the fiscal fourth quarter that intends to speed up improvements in the company’s performance and “tackle a cost structure we can no longer afford.”

“Although our second quarter performance was in line with the expectations in our revised outlook, our results do not reflect the potential of the company," said Susan Morris, Albertsons CEO.

Led by continued gains in its pharmacy and digital business (despite ongoing headwinds associated with the Inflation Reduction Act on its pharmacy business), which helped offset diminished identical sales, total sales were essentially flat from a year ago at $18.89B, although beat expectations by $30M.

However, the impact of higher delivery and handling costs for growth in its digital sales, along with increased shrink, compressed the company’s gross margin by 20 basis points to 26.8%.

A material increase in property dispositions and impairment loss weighed on net income, resulting in adjusted earnings per share of $0.36 versus $0.44% a year ago but 3 cents better than expected.

Through its ACI Edge initiative to realign the operating structure to more effectively leverage scale, Albertsons (ACI) has consolidated 11 divisions into 4 regions and centralized store merchandising under a single enterprise team, all part of a broader turnaround.

Amid initiatives to turn around the business and compete more effectively with lower-cost rivals, Albertsons (ACI) will not provide an updated outlook until the business review is completed during its fiscal fourth quarter. Last quarter, the company slashed its guidance to reflect soft industry trends and a more cautious consumer.

Albertsons (ACI) shares are down more than 3% in premarket trading, while Kroger (KR) shares are more than 1% higher.