Albertsons’ Q3 sees continued growth in identical sales, omnichannel offerings
Albertsons’ third quarter saw the Boise-based retailer posting identical sales gains, as well as continued growth in its omnichannel offerings and penetration of its Own Brands offerings.
For the quarter ended Nov. 30, 2019, Albertsons posted sales of $14.1 billion, up 1.9% over the prior-year period, which the company said was driven largely by identical sales growth of 2.7%, which was slightly offset by a reduction in sales related to store closures since Q3 2018. Additionally, Albertsons’ gross profit margin grew slightly to 28.3%, compared with 27.8% in the previous year’s third quarter. Net income totaled $54.8 million, up from the $45.6 million the company posted in Q3 2018.
"Our identical sales momentum continued in the third quarter, as our core business continues to deliver strong growth," said Vivek Sankaran, Albertsons president and CEO. "We are focused on providing our customers with an easy shopping experience, exciting merchandise and friendly customer service in our omni-channel shopping environment, and creating deep and lasting customer relationships."
Notably, the company said that online home delivery orders and Drive Up and Go sales grew by 34% in the quarter, plus its Just for U registrations and digital coupon redemptions increased by 25% and 31% respectively. This growth in omnichannel comes alongside continuing increases in private-brand penetration, with Albertsons reporting 55% penetration of its Own Brands products.
"Our productivity and cost reduction initiatives are also beginning to take shape, which we intend to use to fund strategic growth investments, offset cost inflation and support earnings growth," Sankaran said. The company’s selling and administrative expenses increased to 27% of sales in the quarter, up from 26.5% in the prior-year period, which the company said largely was due to higher rent and occupancy costs, as well as digital and technological strategic investments.
For the year-to-date period, Albertsons sales totaled $47 billion for the first 40 weeks of its fiscal year, a 1.1% increase over the same period in fiscal 2018, with identical sales up 2.1%.