Albertsons Companies Inc. (NYSE:ACI) stock fell in premarket trading Friday after the grocery retailer reported mixed first-quarter fiscal 2026 results, cut its full-year outlook and announced a broad restructuring plan.
Adjusted earnings were 42 cents per share, below the 54-cent estimate. Net sales and other revenue rose 0.2% to $24.942 billion, topping the $24.822 billion estimate.
GAAP diluted earnings fell to 17 cents from 41 cents a year earlier. Net income declined to $84.7 million from $236.4 million, while adjusted EBITDA fell to $1.013 billion from $1.111 billion.
Albertsons said lower-income shoppers remain under pressure and are increasingly shifting their spending to lower-cost competitors. CEO Susan Morris told analysts the company’s biggest customer losses are to Walmart Inc. (NASDAQ:WMT), Amazon.com Inc. (NASDAQ:AMZN) and Aldi, particularly among price-sensitive consumers.
In response, Albertsons plans targeted price investments, personalized loyalty offers and expanded private-label promotions to retain budget-conscious shoppers.
Digital Growth Stands Out
Identical sales declined 0.8% as core grocery faced softer unit trends and a more cautious consumer. Digital sales rose 13%, while pharmacy continued to grow despite Inflation Reduction Act headwinds.
Morris said, “Digital sales grew 13% this quarter with penetration increasing nearly to 10.5%.”
She added, “These results were below our expectations and we’re taking decisive action to improve future performance.”
Morris also said, “E-commerce was profitable in the first quarter. This milestone demonstrates that we are successfully growing digital sales while improving the underlying economics of the platform.”
Albertsons is investing in AI-powered tools for digital shopping, merchandising and labor optimization, supported by partnerships with Google, OpenAI and Microsoft.
Margins Remain Pressured
Gross margin declined to 26.6% from 27.1%. Excluding fuel and LIFO expense, gross margin fell 23 basis points as higher digital delivery, handling and fuel costs outweighed improved pharmacy margins.
President and CFO Sharon McCollam said, “Reported results were pressured by approximately 100 basis points from the impact of the Inflation Reduction Act and 50 basis points from egg deflation.”
Operating cash flow totaled $728.9 million, while capital expenditures were $522.1 million. Albertsons ended the quarter with $293.4 million in cash and $9.163 billion in total debt.
ACI Edge Restructuring
Albertsons introduced ACI Edge, consolidating 11 divisions into four regions and centralizing center-store merchandising.
Management expects about $200 million in incremental annual run-rate benefits, with most savings realized in fiscal 2027. Transition costs are expected to total about $50 million across fiscal 2026 and fiscal 2027.
Guidance Cut Draws Downgrades
Albertsons cut fiscal 2026 adjusted EPS guidance to $1.75 to $1.85 from $2.22 to $2.32, below the $2.27 estimate.
Adjusted EBITDA guidance was reduced to $3.55 billion to $3.625 billion. Identical sales are now expected to be negative 1.5% to negative 0.5%, including a 150-basis-point headwind from the Inflation Reduction Act’s Medicare Drug Price Negotiation Program.
Capital spending is expected at $1.9 billion to $2 billion.
Telsey Advisory Group downgraded Albertsons to Market Perform and lowered its price forecast to $13 from $22. BMO Capital also downgraded the stock to Market Perform, cutting its price forecast to $12 from $23. Wells Fargo downgraded Albertsons to Equal Weight and reduced its price forecast to $11 from $18.
ACI Price Action: Albertsons Companies shares were down 1.53% at $11.27 in the premarket session on Friday, according to Benzinga Pro data. The stock closed down 21.64% in the previous session.
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