Albertsons 2026 Q1 Earnings Modest Performance as Net Income Declines 1.8%

Albertsons Companies (ACI) reported its fiscal 2026 Q1 earnings on July 22nd, 2025. The company’s revenue growth of 2.5% to $24.88 billion was in line with expectations, while earnings per share (EPS) fell slightly below expectations with a decline to $0.41 from $0.42 in the previous year. Albertsons maintained its guidance for fiscal 2025, projecting adjusted earnings per share in the range of $2.03 to $2.16. The company continues to navigate challenges related to its gross margin, driven by strategic investments and a shift towards digital and pharmacy services.

Revenue

Albertsons reported a total revenue increase of 2.5% in Q1 2026, reaching $24.88 billion, compared to $24.27 billion in the same quarter of 2025.

Earnings/Net Income

Albertsons's EPS declined 2.4% to $0.41 in 2026 Q1 from $0.42 in 2025 Q1. Meanwhile, the company's net income declined to $236.40 million in 2026 Q1, down 1.8% from $240.70 million reported in 2025 Q1. The EPS decline indicates moderate financial performance.

Price Action

The stock price of Albertsons edged up 0.64% during the latest trading day, edged down 2.09% during the most recent full trading week, and edged down 2.47% month-to-date.

Post-Earnings Price Action Review

The strategy of buying ACI shares following an earnings beat and selling 30 days later yielded moderate returns, yet fell short of the benchmark performance. It achieved a 48.44% return, trailing the benchmark by 28.28%. The strategy displayed a low-risk profile, marked by a maximum drawdown of 0.00% and a Sharpe ratio of 0.40. However, the 21.55% volatility during the holding period highlighted considerable fluctuations in stock value. Despite the underperformance relative to the benchmark, the approach maintained stability with minimal drawdown, reflecting effective risk management.

CEO Commentary

Vivek Sankaran, CEO of Albertsons Companies, highlighted the company's solid performance driven by a significant 25% increase in digital sales and a 20% growth in the pharmacy sector, contributing to an identical sales growth of 2.8%. He acknowledged the challenges posed by a declining gross margin, primarily due to investments in the customer value proposition and the shift toward digital and pharmacy services. Despite these hurdles, he expressed optimism about the ongoing productivity agenda aimed at achieving $1.5 billion in savings by 2027, which will be reinvested for growth, demonstrating a balanced approach to both growth and operational efficiency.

Guidance

Albertsons projects adjusted earnings per share for fiscal 2025 to be in the range of $2.03 to $2.16, alongside identical sales growth of 1.5% to 2.5%. The company maintains its adjusted EBITDA guidance between $3.8 billion and $3.9 billion and anticipates capital expenditures of $1.7 billion to $1.9 billion, with a strong focus on digital and technological modernization to drive future growth.

Additional News

Albertsons Companies experienced significant developments in July 2025, with UBS upgrading the company’s stock rating from 'Neutral' to 'Buy', reflecting confidence in its operational strategies and market positioning. UBS analyst Mark Carden raised the price target for Albertsons from $22.00 to $27.00, suggesting a favorable outlook on the company’s future market performance. Additionally, Albertsons Companies announced a $2 billion share repurchase program, signaling a shift towards returning value to shareholders amidst ongoing legal challenges. These strategic moves aim to enhance shareholder value and strengthen Albertsons' financial position in the competitive grocery market.