Albertsons Companies (NYSE:ACI) announced mixed results in the fourth quarter. The retailer posted net sales of $18.3 billion, which were up by 0.4% year-over-year but fell short of consensus estimates of $18.5 billion. Albertsons’ comparable sales increased by 1% year-over-year, with digital sales growing by 24% year-over-year.
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The grocery retailer reported Q4 adjusted earnings of $0.54 per share as compared to earnings of $0.79 per share in the same period last year. Analysts were expecting earnings of $0.52 per share.
ACI’s Forward Guidance
Looking forward, the company’s management warned that it will continue to face strong headwinds in the first half of FY24. These include challenges due to higher investments in wages and benefits, lower government aid to its customers, reduced COVID-related income, and a shift towards lower-margin pharmacy and digital businesses.
ACI Is Selling to C&S Wholesale Grocers
In addition, Albertsons Companies and Kroger Co. (NYSE:KR) announced that they will sell 166 more stores to C&S Wholesale Grocers to gain antitrust approval for their $24.6 billion planned merger. Both retailers had initially agreed to sell stores at 413 locations in September last year but have now increased the number to 579.
As a part of this new deal, C&S will pay Kroger cash consideration of about $2.9 billion, which is higher than its earlier payout of $1.9 billion.
Is ACI a Good Buy?
Analysts are cautiously optimistic about ACI stock, with a Moderate Buy consensus rating based on one Buy and Hold each. Year-to-date, ACI stock has declined by more than 10%, and the average ACI price target of $23.50 implies an upside potential of 15.5% from current levels. These analyst ratings are likely to change following ACI stock’s earnings today.
