Albertsons shows profit – but less than a year ago

Nearly two years into a long process that may or may not end up in being acquired, Boise-based Albertsons continues to report positive financial results, but down a bit from a year ago.

The company reported its first-quarter earnings Tuesday, with increases in several key metrics—including the most-watched sales figure and another large jump in digital sales. It reported net income of nearly a quarter billion dollars—$241 million, which is down from the $417.2 million reported in the first quarter of 2023.

The company’s first quarter, which runs from April through June, saw what it calls identical sales increase 1.3%. That’s a measure of stores and other operating units that have been open and running for at least one year, allowing an equal comparison.

The company also noted it saw digital sales jump 23%. That figure remains shrouded in a bit of mystery as the company doesn’t say how much of its overall sales are attributed to digital initiatives like home delivery or drive-up-and-go.

In October of 2022, Albertsons agreed to be acquired by Kroger of Cincinnati, but the deal has faced significant regulatory pressure and faces three separate court actions, as well as a walk-away deadline of October that continues to cast doubt on the closure of the sale, as BoiseDev has reported.

While not a neat apples-to-apples comparison due to differences in the two companies, Albertsons saw better performance on the identical sales measure than Kroger in its most recent report. Kroger saw identical store sales increase 0.5% compared to Albertsons’ 1.3%.

Albertsons CEO Vivek Sankaran continues to warn investors that economic and other conditions may put pressure on the company as 2024 continues.

“As we look ahead to the balance of fiscal 2024, we expect to see continuing headwinds related to investments in associate wages and benefits, an increasing mix of our pharmacy and digital businesses which carry lower margins, and the cycling of prior year food inflation, ” he said. “We expect these headwinds to be partially offset by ongoing productivity initiatives.”

Albertsons and Kroger will face their first court case, in Colorado, on August 12th, followed by action on the Federal Trade Commission’s suit against the deal on August 25th and in September for trial in Washington.

The merger agreement expires in October unless both companies choose to continue pressing forward. If they don’t, Albertsons would pocket $600-million from Kroger.