Albertsons files for IPO touting omnichannel, private label strength
Albertsons is officially looking to go public. After reports circulated that it was exploring the option of an initial public offering, the Boise, Idaho-based retailer on Friday filed a form for an IPO with the Securities and Exchange commission.
The company said that the number of shares of stock it will offer, as well as the price range it will be offered at, have yet to be determined. It does contain an estimated capitalization of $11.2 billion.
Besides the absence of stock price and share quantity, the filing is not short on detail. It contained a prospectus related to the IPO that makes the case for Albertsons as a good buy for investors. The prospectus begins with a letter from president and CEO Vivek Sankaran — who took the reins last April — who notes that the company, which operates 2,260 stores under 20 banners in 34 states and the District of Columbia, possesses a combination of brand equity and a revamped network.
“The banners that make up Albertsons have earned customer loyalty over decades. Yet, in many ways, our company is only a few years old,” Sankaran writes. “Since the Safeway merger in 2015, we have successfully completed the integration of our stores, supply chain and technology platforms. We have invested in capabilities allowing us to serve the customer wherever, whenever and however they choose to shop.”
The filing points out several of the company’s strengths, touting recent success in growing net income and identical sales, as well as growth in penetration of its Own Brand private-label offerings. It also highlighted Albertsons’ omnichannel strategy, which includes curbside pickup, home delivery and rush delivery, which has included partnerships with third-party vendors, investments in traditional distribution centers, and recent adoption of in-store micro-fulfillment centers. Since fiscal 2015, the company said it has invested $6.8 billion in capital expenditures, with a plan to spend another $1.5 billion in fiscal 2019.
The company’s most recent quarterly earnings report showed net sales for the quarter of $14.1 billion, an increase of 1.9% over the previous period. Its net income for the quarter was $54.8 million. The quarter also saw private brand penetration increase to 25.6%, as well as growth in its curbside pickup offering of 34% and growth in both loyalty program enrollment and digital coupon utilization.
Albertsons' filing comes at an uncertain time for the stock market as fears of coronavirus grow. Monday morning kicked off with a sell-off that caused trading to stop for 15 minutes with the S&P 500 dropping 7.4% and the Dow Jones Industrial Average dropping 2,046 points. However, one key retail stock was doing well as press time — Walmart, which could bode well for retailers, which are seeing sales boosts from shoppers looking to stock up on essentials.