Albertsons Q1 Earnings: Revenue Up 2.5%, EPS Beats Estimates by a Penny, Identical Sales Guidance Raised to 2.00-2.75%

Albertsons reported Q1 revenue of $24.89 billion, a 2.5% YoY increase, driven by 2.8% identical sales growth. E-commerce surged 25% YoY, and pharmacy and health platform grew 20%. Despite the strong sales growth, the stock dropped 5% due to a narrow EPS beat. The company raised its identical sales guidance to 2.00-2.75% from 1.50-2.50%. Management warned that Q2 identical sales might fall at the lower end of expectations.

Albertsons Companies (ACI) reported strong first-quarter (Q1) 2025 earnings, with net sales and other revenue reaching $24.89 billion, up 2.5% year-over-year (YoY) [1]. This performance was driven by identical sales growth of 2.8%, more than double the rate seen in Q1 2024. The company attributed this growth to robust pharmacy and e-commerce sales, which grew by 20% and 25%, respectively [1].

The company's e-commerce platform accounted for 9% of total grocery revenue during Q1, reflecting a significant shift in consumer behavior towards digital shopping [1]. Additionally, the pharmacy and health platform saw strong growth, with a 20% YoY increase in sales, driven by prescription sales and immunization growth [1]. CEO Susan Morris noted that shoppers who visit the pharmacy counter tend to purchase more groceries, highlighting the long-term value of investing in this segment [1].

Despite the strong sales growth, the stock dropped by 5% following the earnings report due to a narrow earnings per share (EPS) beat. The company raised its identical sales guidance for fiscal 2025 to a range of 2.00% to 2.75%, up from the previous range of 1.50% to 2.50% [1]. President and CFO Sharon McCollam warned that Q2 identical sales might fall at the lower end of expectations [1].

The company's focus on digital customer engagement, media collective growth, and enhancing customer value has paid off, as seen in the 25% growth in e-commerce sales and the 14% increase in loyalty program members to 47 million [2]. Albertsons has also made significant investments in technology modernization and automation, with plans to continue these initiatives to drive growth and improve operational efficiency [2].

Looking ahead, Albertsons will need to navigate ongoing challenges such as gross margin pressure, price investments, and sales mix shifts. The company remains confident in its long-term algorithm of 2% plus identical sales and adjusted EBITDA growth but acknowledges the need for near-term margin stabilization and productivity gains [2].

References:
[1] https://www.grocerydive.com/news/albertsons-first-quarter-2025-earnings-grocery-pharmacy-ecommerce/753081/
[2] https://seekingalpha.com/news/4467577-albertsons-raises-identical-sales-growth-outlook-to-2-percentminus-2_75-percent-for-fy25-as