Albertsons cut its annual sales and profit forecasts on Thursday after reporting a sharp drop in first-quarter earnings, sending Albertsons stock down more than 20%.
The grocer now expects identical sales to decline as much as 1.5% for the year, down from a prior target of flat to up 1%
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Albertsons cut its annual sales and profit forecasts on Thursday after reporting a sharp drop in first-quarter earnings, sending Albertsons stock down more than 20%.
The Boise, Idaho-based grocer now expects identical sales to fall between 0.5% and 1.5% for fiscal 2026, compared with a prior target of flat to up 1%, the company said. Adjusted earnings per share guidance was cut to a range of $1.75 to $1.85, down from a previous range of $2.22 to $2.32. Adjusted EBITDA guidance was lowered to between $3.55 billion and $3.625 billion, from a prior range of $3.85 billion to $3.925 billion.
In the 16-week period ended June 20, 2026, Albertsons posted net income of $84.7 million, or $0.17 per share, a steep decline from $236.4 million, or $0.41 per share, earned in the year-earlier quarter. Identical sales fell 0.8% in the quarter, while adjusted net income came in at $210.3 million, or $0.42 per share, down from $318.9 million, or $0.55 per share, a year ago.
"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," Chief Executive Officer Susan Morris said in a statement.
On a post-earnings call, Morris identified Walmart $WMT and Amazon $AMZN as the primary destinations drawing customers away from Albertsons, describing the shift as concentrated among shoppers gravitating toward retailers that compete aggressively on price, according to Reuters. Rivals including Kroger stock and Sprouts Farmers Market stock also fell on Thursday.
To respond to the pressure, Albertsons said it is accelerating investments in pricing and the customer experience and restructuring its operating model. As part of the restructuring, Albertsons said it will collapse its current structure of 11 operating divisions down to four regional units, bringing merchandising functions — pricing, promotions, and supplier relationships among them — under centralized control.
"We are choosing to accelerate investments in our customer value proposition and the customer experience ahead of expected productivity benefits because we believe these actions will improve our growth trajectory," Morris said in a statement.
Albertsons also announced that Sharon McCollam is stepping down as Chief Financial Officer and will leave the company before year's end, according to Reuters.
During the first quarter, the company repurchased 13.4 million shares of common stock for $226.5 million and increased its quarterly dividend 13% to $0.17 per share, the company said. Capital expenditures were $522.1 million in the quarter, which included the opening of four new stores and the completion of 15 remodels.
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