Albertsons reports strong Q3 results
Investments in digital transformation, differentiation in Own Brands and Fresh offerings and the modernization of operational capabilities contributed to Albertsons' strong Q3 results.
The company shared that its net sales and other revenue was $18.2 billion during the 12 weeks ended Dec. 3, 2022, compared to $16.7 billion during the same period in 2021. The increase was driven by the company's 7.9% increase in identical sales and higher fuel sales, with retail price inflation as the primary driver of the identical sales increase, Albertsons said.
Albertsons' gross margin rate decreased to 28.2% during the quarter compared to 28.9% during the quarter of fiscal 2021. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 47 basis points compared to the third quarter of fiscal 2021. The decrease was primarily driven by increases in product, shrink and supply chain costs and a decline in COVID-related revenue due to administering fewer vaccines. This decrease was partially offset by increased COVID at-home test kit revenue and increases in picking and delivery costs related to the growth in digital sales, Albertsons noted.
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"Our team continues to deliver strong performance as we execute against our Customers for Life strategy and bring people together around the joys of food and inspire well-being," said Vivek Sankaran, CEO. "Our investments in digital transformation, differentiation in Own Brands and Fresh offerings and the modernization of our operational capabilities contributed to these results. I want to thank all of our teams for their commitment to serving our customers and living our values every day."
"As we look ahead to the balance of the year and into fiscal 2023, we believe that all of these initiatives position us well to continue to drive top-line growth and deepen our customer and community engagement both online and in-store," Sankaran continued. "At the same time, our ongoing productivity engine is expected to continue to support our investments and partially offset anticipated inflationary cost increases, declines in COVID-19 vaccination and at-home test kit revenue and macro-consumer headwinds."
Albertsons' net income was $375.5 million, or 20 cents per share, during the quarter compared to $424.5 million, or 74 cents per share, during the same period last year. Net income per share during the third quarter of fiscal 2022 includes a 45 cents per share reduction related to the special dividend that is attributable to holders of convertible preferred stock on an as-converted basis, the company said.
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The retailer's adjusted net income was $505.1 million, or 87 cents per share, during the third quarter of fiscal 2022 compared to $457.2 million, or 79 cents per share, during the third quarter of fiscal 2021.
Albertsons' adjusted EBITDA was $1,158 million, or 6.4% of net sales and other revenue, during the quarter compared to $1,051.2 million, or 6.3% of net sales and other revenue, during the same quarter of fiscal 2021.