Albertsons stocks plunged nearly 15% on Thursday after the grocer lowered its fiscal 2026 outlook, citing softer demand and a more cautious consumer. CEO Susan Morris stated that in the first quarter, digital and pharmacy businesses continued strong growth while core grocery faced increasing pressure from softer industry unit trends. The outlook cut comes amid broader signs that U.S. consumers have scaled back their grocery trips, with food inflation and tighter budgets due to high gas prices appearing to hurt spending.
Albertsons Reports Q1 Identical Sales Decline and Net Income Drop
For the first fiscal quarter of the year, Albertsons reported that identical sales fell 0.8%. The company reported net income of $84.7 million, or 17 cents per share, compared to $236.4 million, or 41 cents per share, in the year-ago period.
Morris said on a call with analysts that while the pressure on consumers is weighing on near-term earnings, the company aims to "improve traffic, units, loyalty and the overall trajectory of the business over time." The company said it is now "moving decisively" to invest in the customer experience because it believes that will improve its growth trajectory.
Albertsons Lowers Full-Year Fiscal 2026 Financial Guidance
For the full year, Albertsons said it now expects net income between $1.75 and $1.85 per share, down significantly from its previous expectation of between $2.22 and $2.32 per share.
The company also lowered its adjusted EBITDA guidance to a range of between $3.55 billion and $3.625 billion, compared to a previous projection of between $3.85 billion and $3.925 billion. It also now expects identical sales, a metric similar to comparable sales, to be in a range of down 0.5% to 1.5%, compared to a previous expectation of flat to up 1%.
Albertsons Cites Broader U.S. Consumer Grocery Spending Slowdown
"In the first quarter, our digital and pharmacy businesses continued to deliver strong growth, while core grocery faced increasing pressure from softer industry unit trends and a more cautious consumer," CEO Susan Morris said in a statement.
The company's outlook cut comes amid broader signs that U.S. consumers have scaled back their grocery trips. Food inflation and tighter budgets due to high gas prices, among other factors, appear to be hurting spending.
FAQ
Why did Albertsons stocks drop on Thursday?
Albertsons stocks sank nearly 15% on Thursday after the company lowered its fiscal 2026 outlook, citing softer demand and a more cautious consumer. The grocer reduced its full-year net income guidance from $2.22-$2.32 per share to $1.75-$1.85 per share.
What were Albertsons' first quarter financial results?
Albertsons reported that identical sales fell 0.8% in the first fiscal quarter. Net income was $84.7 million, or 17 cents per share, compared to $236.4 million, or 41 cents per share, in the year-ago period.
What is causing pressure on Albertsons' core grocery business?
CEO Susan Morris stated that core grocery faced increasing pressure from softer industry unit trends and a more cautious consumer. The outlook cut comes amid broader signs that U.S. consumers have scaled back their grocery trips due to food inflation and tighter budgets from high gas prices.
