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Albertsons Companies, Inc. (ACI)
:ACI
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Albertsons Companies
(NYSE:ACI)76Outperform
Positive Factors
Financial Guidance
The reaffirmation of 2024 guidance for EBITDA and EPS suggests the company is maintaining favorable momentum.
Leadership Transition
The transition to Susan Morris as CEO is seen as positive because she has been with the company for nearly 40 years and has held significant leadership roles.
Negative Factors
Competitive Pressure
ACI has been losing share to WMT and faces significant competition from other food retailers, with e-commerce likely to continue being a pressure point on margins.
Albertsons Companies (ACI) vs. S&P 500 (SPY)
Market Cap
$11.45B
Dividend Yield2.46%
Average Volume (3M)4.57M
Price to Earnings (P/E)11.1
Beta (1Y)0.31
Revenue Growth0.97%
EPS Growth-24.43%
CountryUS
Employees200,000
SectorConsumer Defensive
Sector Strength73
IndustryRetailers - Staples
Share Statistics
EPS (TTM)1.78
Shares Outstanding579,379,330
10 Day Avg. Volume4,594,903
30 Day Avg. Volume4,574,833
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.15
Price to Cash Flow (P/CF)5.50
P/FCF Ratio5.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$23.09Price Target Upside16.85% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Albertsons Companies Business Overview & Revenue Model
Company DescriptionAlbertsons Companies, Inc. (ACI) is one of the largest food and drug retailers in the United States. Founded in 1939, the company operates a network of supermarkets and stores across multiple states under well-known banners such as Albertsons, Safeway, Vons, and Jewel-Osco. Albertsons offers a wide array of products including fresh produce, meats, dairy, bakery items, and pharmacy services, catering to diverse consumer needs. The company emphasizes high-quality private label brands and a strong focus on customer service to enhance the shopping experience.
How the Company Makes MoneyAlbertsons Companies generates revenue primarily through the sale of groceries and pharmacy products in its retail stores. A significant portion of its income comes from its extensive portfolio of private label brands, which offer higher margins compared to national brands. Additionally, Albertsons earns money through its pharmacy services, which include prescription medications and healthcare products. The company also benefits from strategic partnerships with suppliers and manufacturers, as well as promotional activities and loyalty programs that drive customer engagement and sales. Other revenue streams include fuel centers and digital sales, as Albertsons expands its e-commerce capabilities to meet the growing demand for online grocery shopping.
Albertsons Companies Financial Statement Overview
Summary
Albertsons Companies shows strong revenue growth and operational efficiency, supported by solid cash flow management. However, high debt levels pose potential risks, particularly in adverse economic conditions.Income Statement
Albertsons Companies has demonstrated consistent revenue growth over the years, with a TTM revenue increase to $79.93 billion. The gross profit margin for TTM is strong at 27.79%, and while the net profit margin has seen a decline to 1.30%, it remains positive. EBIT and EBITDA margins are stable, reflecting operational efficiency. However, the slight decrease in the EBIT margin from prior years highlights some pressure on operational costs.82
Very Positive
Balance Sheet
The balance sheet showcases a high debt-to-equity ratio of 4.22, indicating significant leverage, which poses a financial risk. However, the return on equity has improved to 30.81%, reflecting efficient use of shareholder funds. The equity ratio is lower at 12.62%, suggesting a reliance on debt financing, which could be risky during economic downturns.75
Positive
Cash Flow
Cash flow analysis reveals positive trends, with free cash flow growth of 36.00% in the latest TTM period, indicating strong cash management. The operating cash flow to net income ratio is healthy at 2.22, suggesting efficient cash generation relative to net income. Despite a high level of capital expenditures, the company maintains a solid free cash flow to net income ratio of 0.82.78
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 79.93B | 79.24B | 77.65B | 71.89B | 69.69B | 62.46B | Gross Profit |
| 22.21B | 20.43B | 21.76B | 20.72B | 20.41B | 17.59B | EBIT |
| 1.87B | 2.07B | 2.31B | 2.44B | 1.62B | 923.80M | EBITDA |
| 3.43B | 4.54B | 4.80B | 4.89B | 3.79B | 3.19B | Net Income Common Stockholders |
| 1.04B | 1.30B | 1.51B | 1.62B | 850.20M | 466.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 188.70M | 188.70M | 455.80M | 2.90B | 1.72B | 470.70M | Total Assets |
| 26.22B | 26.22B | 26.17B | 28.12B | 26.60B | 24.74B | Total Debt |
| 14.24B | 14.24B | 14.96B | 14.03B | 14.47B | 14.68B | Net Debt |
| 14.05B | 14.05B | 14.51B | 11.12B | 12.75B | 14.21B | Total Liabilities |
| 23.47B | 23.47B | 24.56B | 25.10B | 25.27B | 22.46B | Stockholders Equity |
| 2.75B | 2.75B | 1.61B | 3.02B | 1.32B | 2.28B |
| Cash Flow | Free Cash Flow | ||||
| 907.80M | 628.20M | 700.00M | 1.91B | 2.27B | 428.80M | Operating Cash Flow |
| 2.85B | 2.66B | 2.85B | 3.51B | 3.90B | 1.90B | Investing Cash Flow |
| -1.83B | -1.75B | -1.98B | -1.54B | -1.57B | -378.50M | Financing Cash Flow |
| -1.04B | -1.18B | -3.37B | -789.50M | -1.04B | -2.01B |
Albertsons Companies Technical Analysis
Negative
19.76
Price Trends
20.12
Negative
19.42
Positive
19.40
Positive
Market Momentum
0.10
Positive
39.18
Neutral
53.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACI, the sentiment is Negative. The current price of 19.76 is below the 20-day moving average (MA) of 20.74, below the 50-day MA of 20.12, and above the 200-day MA of 19.40, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 39.18 is Neutral, neither overbought nor oversold. The STOCH value of 53.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ACI.
Albertsons Companies Risk Analysis
Albertsons Companies disclosed 43 risk factors in its most recent earnings report. Albertsons Companies reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Albertsons Companies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $460.27B | 60.89 | 30.98% | 0.44% | 5.35% | 16.22% | |
77 Outperform | $762.93B | 39.41 | 22.33% | 0.85% | 5.07% | 25.86% | |
76 Outperform | $11.45B | 11.11 | 30.82% | 2.46% | 0.97% | -24.43% | |
72 Outperform | $14.33B | 38.71 | 28.79% | ― | 12.90% | 50.20% | |
68 Neutral | $45.51B | 16.64 | 21.45% | 1.99% | 1.41% | 46.58% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% | |
61 Neutral | $1.12B | 14.54 | <0.01% | 1.09% | -7.38% | -57.42% |
* Consumer Defensive Sector Average
Performance Comparison
ACI
Albertsons Companies
19.76
-0.16
-0.80%
COST
Costco
1,036.87
267.84
34.83%
IMKTA
Ingles Markets
60.24
-15.53
-20.50%
KR
Kroger Company
63.18
13.77
27.87%
WMT
Walmart
94.97
35.12
58.68%
SFM
Sprouts Farmers
145.35
82.01
129.48%
Albertsons Companies Earnings Call Summary
Earnings Call Date: Jan 8, 2025 | % Change Since: 0.97% | Next Earnings Date: Apr 28, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive growth in digital sales, loyalty program expansion, and pharmacy sales, alongside challenges such as merger termination and gross margin declines. The strong balance sheet and productivity initiatives offer future optimism but were offset by some financial pressures and the broader market slowdown.Highlights
Digital Sales Growth
Digital sales increased by 23%, driven by strong growth in first-party sales and innovations in digital offerings.
Loyalty Program Expansion
Loyalty members increased by 15% to 44.3 million, with enhanced engagement and customer spend.
Dividend Increase
Quarterly dividend increased by 25% to $0.15 per share.
Pharmacy Sales Surge
Pharmacy sales increased by 13%, with high penetration driven by core script growth and service excellence.
Strong Balance Sheet
Net debt leverage at the end of the third quarter was 1.9 times, indicating a strong balance sheet.
Productivity Initiatives
Plans to deliver $1.5 billion in savings over three years to fuel growth and offset inflationary headwinds.
Lowlights
Merger Termination
Disappointment expressed over the termination of the merger, requiring ongoing investment focus.
Gross Margin Decline
Gross margin decreased by 27 basis points, driven by growth in pharmacy sales and digital picking costs.
Identical Sales Growth Deceleration
Identical sales increased by only 2%, with industry-wide slowdown observed in December.
Adjusted EPS Decrease
Adjusted EPS was $0.71 per share compared to $0.79 in Q3 '23, reflecting financial pressures despite operational benefits.
Company Guidance
During the Albertsons Companies Third Quarter 2024 Earnings Conference Call, the company provided updated guidance for fiscal 2024, reflecting adjustments in several key metrics. The identical sales growth is now projected to be between 1.8% to 2%, slightly narrowed from the previous range of 1.8% to 2.2%. However, the company raised its adjusted EBITDA forecast to a range of $3.95 billion to $3.99 billion, up from $3.90 billion to $3.98 billion, driven by ongoing productivity improvements. The adjusted earnings per share (EPS) outlook was increased to $2.25 to $2.31 from the prior range, reflecting the adjusted EBITDA increase. The full-year tax rate is expected to be between 15% to 16%, benefiting from an $81 million discrete state income tax settlement. Capital expenditures remain unchanged, projected to be between $1.8 billion to $1.9 billion. The company emphasized its commitment to reinvesting in growth while also maintaining shareholder returns through dividends and a $2 billion share repurchase authorization.Albertsons Companies Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Albertsons Companies Announces CEO Vivek Sankaran’s Retirement
Neutral
Mar 3, 2025
Albertsons Companies announced the retirement of CEO Vivek Sankaran, effective May 1, 2025, with Susan Morris, the current Executive Vice President and Chief Operations Officer, set to succeed him. This transition is part of a comprehensive succession plan, with Morris bringing nearly 40 years of industry experience to the role, aiming to continue the company’s growth and strategic initiatives, including the ‘Customers for Life’ strategy.
Executive/Board Changes
Albertsons Announces Board Change with New Appointment
Neutral
Feb 21, 2025
On February 21, 2025, Stephen Feinberg resigned from the Board of Directors of Albertsons Companies, Inc. His departure was not due to any disagreements with the company or its management. Following his resignation, Frank Bruno was appointed to the Board. Bruno, who is Co-Chief Executive Officer and Senior Managing Director of Cerberus Capital Management, was designated by Cerberus, which holds significant shares in Albertsons and provides services to the company.
M&A TransactionsLegal Proceedings
Albertsons Ends Merger Agreement with Kroger
Negative
Dec 11, 2024
Albertsons Companies, Inc. terminated its merger agreement with The Kroger Co. following a court’s preliminary injunction against the merger. This decision impacts the planned merger, halting the creation of a wholly owned subsidiary of Kroger, and reflects the legal challenges faced in the merger process.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.