Albertsons’ Q1 posts steady sales gains, e-commerce growth
Albertsons' first quarter saw its e-commerce and digital capabilities benefiting from recent investments as the company grew sales and lowered its debt load.
The Boise, Idaho-based company on Wednesday reported results from its fiscal 2019 first quarter, which ended June 15, posting a .5 % revenue increase to $18.7 billion. Albertsons’ identical sales increased 1.5%, and it posted e-commerce sales growth of 33% as its private-label brand penetration hit a high of 25.3%.
The company closed the quarter with net income of $49 million compared with a net loss of $17.7 million during the first quarter of fiscal 2018.
"I am pleased with the position of our business at Albertsons Companies," Vivek Sankaran, Albertsons president and CEO, said. "Identical sales were positive for the sixth consecutive quarter, and we continue to expand our e-commerce and digital capabilities. We are focused on our sales momentum and will continue to elevate the end-to-end customer experience as we work to create a next-generation food retailer. We recognize the ever-changing retail consumer and are working swiftly to adapt our business to allow customers to shop with us whenever, wherever and however they want. We also continue to deliver the balance sheet, which will reduce interest expense and increase financial flexibility."
Gross profit margin increased to 28% during the first quarter of fiscal 2019 compared with 27.7% during the first quarter of fiscal 2018, which the company attributed to benefiting from better than expected fuel margins during the first quarter of fiscal 2019. Excluding the impact of fuel, gross profit margin increased 10 basis points compared with the first quarter of fiscal 2018. Improved shrink expense and lower advertising costs were partially offset by industry-wide reimbursement rate pressures in pharmacy.
Adjusted EBITDA increased 7.5% to $876.8 million, or 4.7% of sales, during the first quarter of fiscal 2019 compared with $815.8 million, or 4.4% of sales, during the first quarter of fiscal 2018. The increase in adjusted EBITDA was primarily attributable to higher fuel margins, an increase in sales, and the continued realization of cost reduction initiative, the company said.
Albertsons said that selling and administrative expenses decreased to 26.2% of sales during the first quarter of fiscal 2019 compared with 26.7% of sales for the first quarter of fiscal 2018. Excluding the impact of fuel, selling and administrative expenses as a percentage of sales also decreased 50 basis points. The decrease in selling and administrative expenses was primarily attributable to lower acquisition and integration costs, as the store system conversions related to the Safeway integration were completed during fiscal 2018 and the continued realization of the company's cost reduction initiatives, partially offset by higher employee wage and benefit costs.
During the first quarter of fiscal 2019, Albertsons invested approximately $362 million in capital expenditures, which included investments in strategic technology in e-commerce and digital capabilities, and the completion of 28 remodel projects and the opening of six new stores.
The Boise, Idaho-based company on Wednesday reported results from its fiscal 2019 first quarter, which ended June 15, posting a .5 % revenue increase to $18.7 billion. Albertsons’ identical sales increased 1.5%, and it posted e-commerce sales growth of 33% as its private-label brand penetration hit a high of 25.3%.
The company closed the quarter with net income of $49 million compared with a net loss of $17.7 million during the first quarter of fiscal 2018.
"I am pleased with the position of our business at Albertsons Companies," Vivek Sankaran, Albertsons president and CEO, said. "Identical sales were positive for the sixth consecutive quarter, and we continue to expand our e-commerce and digital capabilities. We are focused on our sales momentum and will continue to elevate the end-to-end customer experience as we work to create a next-generation food retailer. We recognize the ever-changing retail consumer and are working swiftly to adapt our business to allow customers to shop with us whenever, wherever and however they want. We also continue to deliver the balance sheet, which will reduce interest expense and increase financial flexibility."
Gross profit margin increased to 28% during the first quarter of fiscal 2019 compared with 27.7% during the first quarter of fiscal 2018, which the company attributed to benefiting from better than expected fuel margins during the first quarter of fiscal 2019. Excluding the impact of fuel, gross profit margin increased 10 basis points compared with the first quarter of fiscal 2018. Improved shrink expense and lower advertising costs were partially offset by industry-wide reimbursement rate pressures in pharmacy.
Adjusted EBITDA increased 7.5% to $876.8 million, or 4.7% of sales, during the first quarter of fiscal 2019 compared with $815.8 million, or 4.4% of sales, during the first quarter of fiscal 2018. The increase in adjusted EBITDA was primarily attributable to higher fuel margins, an increase in sales, and the continued realization of cost reduction initiative, the company said.
Albertsons said that selling and administrative expenses decreased to 26.2% of sales during the first quarter of fiscal 2019 compared with 26.7% of sales for the first quarter of fiscal 2018. Excluding the impact of fuel, selling and administrative expenses as a percentage of sales also decreased 50 basis points. The decrease in selling and administrative expenses was primarily attributable to lower acquisition and integration costs, as the store system conversions related to the Safeway integration were completed during fiscal 2018 and the continued realization of the company's cost reduction initiatives, partially offset by higher employee wage and benefit costs.
During the first quarter of fiscal 2019, Albertsons invested approximately $362 million in capital expenditures, which included investments in strategic technology in e-commerce and digital capabilities, and the completion of 28 remodel projects and the opening of six new stores.