Albertsons reports Q4, full year results

Albertsons net sales and other revenue were $18.3 billion during the fourth quarter.

4/11/2023

"We are pleased with our fourth quarter financial results and the suite of capabilities we continue to build in our business," said Vivek Sankaran, CEO of Albertsons, in sharing results for the company’s fourth quarter of fiscal 2022 and full year fiscal 2022, which ended Feb. 25, 2023.

"We want to thank all our teams for their commitment to bringing people together around the joys of food and inspiring well-being, and for serving our customers and communities," Sankaran said, adding, "These results, and our results for fiscal 2022 overall, were fueled by the rollout of our Customers for Life transformation strategy, which places the customer at the center of everything we do, with the ultimate goal of supporting them every day, every week and for a lifetime. Against this backdrop, throughout the year, we invested in the following initiatives: digitally connecting and engaging our customers through a frictionless omnichannel experience, differentiating our store experience, enhancing what we offer and where we offer it, modernizing our operational capabilities and further embedding ESG throughout our operations."

Sankaran continued, "As we look ahead to fiscal 2023, we believe we are well-positioned to drive top-line growth by deepening relationships with our customers even as inflation continues. However, we also believe that the economic backdrop is uncertain and is likely to be more challenging later in the year. We have prepared our business for a more difficult consumer environment, and are expecting significant labor investments and inflationary cost increases. Additionally, we expect further declines in COVID-19 vaccination and at-home test kit revenue. These headwinds are expected to be partially offset by the ongoing growth in our core business and the benefits from the next phase of our productivity initiatives."

Albertsons net sales and other revenue were $18.3 billion during the fourth quarter compared to $17.4 billion during the same period in the prior year. Albertsons said that the increase was driven by the company's 5.6% increase in identical sales, with retail price inflation, growth in pharmacy and increasing digital penetration contributing to the identical sales increase.

Albertsons gross margin rate decreased to 27.8% during the fourth quarter of fiscal 2022 compared to 28.7% during the same period of fiscal 2021. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 71 basis points compared to the fourth quarter of fiscal 2021.

The pharmacy business drove approximately half of the rate decrease with the remaining decrease being the result of increases in product, shrink, supply chain and advertising costs, as well as increases in picking and delivery costs related to the continued growth in digital sales. The decrease was partially offset by the benefits of ongoing productivity initiatives, the company said.

The decrease related to the pharmacy business was primarily due to fewer COVID-19 vaccinations in the fourth quarter. Albertsons administered .4 million COVID-19 vaccinations during the fourth quarter of fiscal 2022, compared to 2.3 million during the fourth quarter of fiscal 2021, the company said.

Net income was $311.1 million or 54 cents per share during the fourth quarter of fiscal 2022, which included the $43.5 million or 7 cents per share benefit related to the reduction in reserves for uncertain tax positions. Net income was $455.1 million or 79 cents per share during the fourth quarter of fiscal 2021, which included the $78.7 million or 14 cents per share gain, net of tax, related to the Combined Plan withdrawal.

Adjusted net income was $459.7 million, or 79 cents per share (which includes the 7 cents per share benefit discussed above), during the fourth quarter of fiscal 2022 compared to $436.8 million, or 75 cents per share, during the prior year period.

Adjusted EBITDA was $1.052 billion during the fourth quarter of fiscal 2022 compared to $1.0737 billion during the fourth quarter of fiscal 2021. The decrease in adjusted EBITDA was driven by fewer COVID-19 vaccines in the quarter. This trend of declining COVID-19 vaccinations is expected to continue into fiscal 2023, in addition to lower COVID-19 at-home test kit revenue, and as a result Albertsons said that it expects an approximate $200 million headwind to its adjusted EBITDA in fiscal 2023 compared to fiscal 2022.

In reporting fiscal 2022 results, Albertsons shared the following:

Identical sales increased 6.9%;
Digital sales increased 28%;
Net income was $1.514 billion, or $2.27 per share;
Adjusted net income was $1.965 billion, or $3.37 per share; and
Adjusted EBITDA was $4.677 billion.

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