Albertsons Companies, Inc. ACI reported first-quarter fiscal 2026 results, wherein adjusted earnings missed the Zacks Consensus Estimate while revenues surpassed the same. On a year-over-year basis, revenues increased marginally, whereas adjusted earnings declined. The company also lowered its fiscal 2026 outlook.
Digital and pharmacy businesses continued to deliver strong growth during the fiscal first quarter, while core grocery faced increasing pressure from softer industry unit trends and a more cautious consumer. In response, the company announced ACI Edge, an operating structure realignment designed to accelerate execution, increase accountability and better leverage its scale, technology and local market expertise.
As part of ACI Edge, Albertsons is transitioning from 11 divisions to four regions and centralizing center-store merchandising to strengthen accountability, accelerate decision-making and improve consistency across banners and regions. Management stated that these actions are intended to deliver sharper value, greater differentiation in fresh and an enhanced customer experience while creating long-term value for customers and shareholders.
Albertsons Companies, Inc. Price, Consensus and EPS Surprise
Albertsons Companies, Inc. price-consensus-eps-surprise-chart | Albertsons Companies, Inc. Quote
Albertsons’ Quarterly Performance: Key Insights
ACI posted adjusted quarterly earnings of 42 cents per share, which missed the Zacks Consensus Estimate of 55 cents. The bottom line declined from 55 cents reported in the prior-year quarter.
Net sales and other revenues increased 0.2% year over year to $24,941.6 million, surpassing the Zacks Consensus Estimate of $24,815 million. Growth was supported by higher fuel sales, while identical sales declined 0.8%. Pharmacy sales remained resilient despite headwinds from the Inflation Reduction Act and digital sales rose 13% in the fiscal first quarter.
Insight Into ACI's Q1 Margins & Expenses
Gross profit declined 1.5% year over year to $6.64 billion. However, the gross margin for the quarter under review contracted 50 basis points (bps) year over year to 26.6% from 27.1% in the first quarter of fiscal 2025.
Excluding the impacts of fuel and LIFO expense, gross margin decreased 23 bps from the prior-year period. The decline was primarily caused by higher delivery and handling costs associated with continued digital sales growth, as well as higher fuel costs. These impacts were partially offset by improvements in pharmacy margins, primarily related to the impact of the Inflation Reduction Act. The company continued to invest in its customer value proposition, supported by productivity initiatives.
In the first quarter of fiscal 2026, selling and administrative expenses increased 0.9% year over year to $6.38 billion. As a percentage of net sales and other revenues, these expenses rose 20 basis points to 25.6%.
Excluding the impact of fuel, selling and administrative expenses as a percentage of net sales and other revenues rose 42 basis points year over year. The increase reflected higher rent and occupancy costs, merger-related litigation expenses, business transformation costs, and depreciation and amortization, partly offset by lower employee costs. Despite disciplined productivity and cost management efforts, the expense rate was affected by lower identical sales, including the impact of the Inflation Reduction Act on pharmacy sales growth.
Adjusted EBITDA declined 8.8% year over year to $1.01 billion, while the adjusted EBITDA margin contracted 40 bps year over year to 4.1% of net sales and other revenues.
ACI’s Q1 Financial Snapshot
Albertsons ended the quarter with cash and cash equivalents of $293.4 million. The company's long-term debt and finance lease obligations totaled $8.42 billion as of June 20, 2026, while total stockholders' equity amounted to $1.61 billion.
In the first quarter of fiscal 2026, capital expenditures totaled $522.1 million, primarily for the completion of 15 remodels, the opening of four new stores and continued investments in the company's digital and technology platforms.
ACI also continued returning capital to its shareholders. During the fiscal first quarter, the board increased the quarterly cash dividend by 13% from 15 cents to 17 cents per share. Albertsons paid a quarterly dividend of 17 cents per share on May 8, 2026, and repurchased 13.4 million shares of common stock for $226.5 million under its existing multi-year share repurchase authorization. The company declared its next quarterly cash dividend of 17 cents per share, payable on Aug. 7, 2026, to its shareholders of record as of July 24.
Sneak Peek Into Albertsons’ FY26 Outlook
The company updated its fiscal 2026 outlook to reflect continued softness in industry unit trends and a more cautious consumer, while accelerating investments and operational changes designed to strengthen its customer value proposition and improve its competitive position.
Albertsons now expects identical sales to decline between 1.5% and 0.5%, compared with its previous forecast of flat growth to a 1% increase.
Adjusted EBITDA is projected to be between $3.55 billion and $3.63 billion, down from the prior range of $3.85 billion to $3.93 billion. Adjusted earnings are expected to be between $1.75 and $1.85 per share versus the earlier outlook of $2.22-$2.32. Capital expenditures are projected in the range of $1.9-$2 billion compared with the prior expectation of $2-$2.2 billion.
Management noted that the outlook reflects an estimated 150-basis-point headwind from the Inflation Reduction Act's Medicare Drug Price Negotiation Program, which became effective on Jan. 1, 2026.
ACI Stock Past Three-Month Performance
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Shares of this Zacks Rank #3 (Hold) company have lost 12.2% over the past three months against the industry's 2.9% growth.
Three Picks You Can’t Miss
Here, we have highlighted three better-ranked stocks, namely, United Natural Foods, Inc. UNFI, Newell Brands Inc. NWL and The Kraft Heinz Company KHC.
United Natural is the leading distributor of natural, organic and specialty food and non-food products, currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
UNFI delivered an earnings surprise of 29.9% in the trailing four quarters, on average. The Zacks Consensus Estimate for United Natural’s current fiscal-year sales and earnings indicates a decline of 2.1% and growth of 254.9%, respectively, from the year-ago reported quarter.
Newell Brands is a global manufacturer and marketer of consumer and commercial products. It has a Zacks Rank #2 (Buy) at present. NWL delivered a trailing four-quarter average earnings surprise of 9.7%.
The Zacks Consensus Estimate for Newell Brands’ current financial-year sales indicates growth of 1% from the year-ago reported numbers.
Kraft Heinz Company is one of the largest consumer packaged food and beverage companies in North America. It manufactures and markets food and beverage products and currently carries a Zacks Rank #2. KHC delivered a trailing four-quarter earnings surprise of 10.2%, on average.
The Zacks Consensus Estimate for Kraft Heinz Company’s current fiscal-year sales and earnings indicates a decline of 2% and 20.4%, respectively, from the year-earlier reported levels.
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Albertsons Companies, Inc. (ACI): Free Stock Analysis Report
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Kraft Heinz Company (KHC): Free Stock Analysis Report
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