Albertsons (ACI) shares slumped Thursday after the grocery chain lowered its fiscal 2026 earnings and identical sales outlook and reported weaker-than-expected first-quarter profits.
The company reduced its full-year adjusted net income guidance to a range of $1.75 to $1.85 per share, down from its prior outlook between $2.22 and $2.32. The FactSet consensus is $2.27 per share.
Albertsons' shares fell 21% in Thursday trade and have declined 33% so far this year.
Identical sales guidance was revised to a decline of 1.5% to 0.5% from its prior forecast of 0% to 1% growth, and includes an estimated 150 basis point headwind from the Medicare Drug Price Negotiation Program. The updated outlook trails the analysts' estimate of a 0.3% increase in same-store sales.
"Our more cautious view reflects ongoing pressure on lower-income consumers, softness in grocery industry unit trends, and the potential for additional affordability pressure from supplier cost increases," Chief Financial Officer Sharon McCollam said during an earnings call, according to a FactSet transcript.
The adjusted guidance factors in both weaker immediate demand and heightened reinvestment into customer value, McCollam added. "While these actions will pressure near-term earnings, we believe they are strategically necessary to strengthen customer engagement, accelerate unit growth, and improve the long term trajectory of the business," she said
For the first quarter ended June 20, net sales and other revenue grew 0.2% year over year to $24.94 billion, topping Wall Street's view of $24.83 billion. Adjusted earnings per share fell to $0.42 from $0.55 a year earlier, missing the consensus estimate of $0.53.
Identical sales declined 0.8% compared to the FactSet estimate of a 0.5% drop in same-store sales.
"While pharmacy and digital delivered strong growth, their performance was not enough to offset broader pressures in our core business," Chief Executive Susan Morris said in the earnings call. "These results were below our expectations, and we're taking decisive action to improve future performance."
The company is consolidating its 11 divisions into four regions and moving towards a centralized merchandising strategy to speed up decision-making and cut costs.
Albertsons said Thursday that CFO McCollam plans to retire later this year and will stay on until a successor is named. Following the transition, she will serve as an advisor through Feb. 27, 2027.
Price: $11.44, Change: $-3.17, Percent Change: -21.68%
