Things are looking up at Albertsons, which reported positive second quarter growth and raised its outlook for the full fiscal year. According to the retailer’s just-released earnings report, its net income closed in on $300 million for the quarter, up from $284.5 million this time last year to reach $295.2 million.
Sales and other revenue topped $16.5 billion during the quarter ending Sept. 11, versus $15.8 billion for the second quarter in 2020. Identical sales during Albertsons’ second quarter rose 1.5%, beating analyst expectations. On a two-year stacked basis (i.e., compared against the last “normal” time), identical sales were15.3% higher.
Underscoring the company’s efforts in the e-commerce space, digital sales are also in the black, up 5% for the quarter and a noteworthy 248% from two years ago.
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"We are pleased with our second quarter results as we continue to execute our transformation strategy. The favorable consumer backdrop together with our focus on in-store excellence, accelerating our digital and omnichannel capabilities, increasing productivity and strengthening our talent and culture, are driving increased identical sales and improved performance,” remarked Vivek Sankaran, Albertsons’ CEO.
The strong sales and revenue performance during the quarter led to a 20% increase in the company’s quarterly dividend and spurred Albertsons to elevate the outlook for the rest of its fiscal year. Instead of a 5% to 6% decline in overall sales, the retailer now expects a 2.5% to 3.5% dip for the full year, following the FY20 COVID-related stock-up and lockdown surges.
Even with better-than-anticipated gains, the organization has not been left unscathed by ongoing marketplace and economic challenges. Albertsons reported a mostly flat gross profit margin, down from 29.0% in Q2 2020 to 28.6% in Q2 2021, which the retailer attributed to higher product, supply chain and advertising costs. Higher employee expenses also impacted Albertsons, through the reopening of some fresh departments, wage rate increases during the ongoing overall labor crunch and higher equity-based compensation costs. Helping to staunch any additional downward movement in profits: higher pharmacy margins due to COVID-19 vaccinations, various productivity initiatives and a “favorable” product mix, according to the earnings report.
Albertsons also continues invest in its future. Capital expenditures during the second quarter included upgrades in digital and technology capabilities and the opening of six new stores and the remodeling of 76 additional locations.
This story originally appeared on Progressive Grocer.