Albertsons Companies (ACI) investor relations material

Executive summary

• Leadership transition announced with CFO Sharon McCollam retiring; a search for a new transformational leader is underway.

• Identical sales declined 0.8% year-over-year, with digital sales up 13% and pharmacy remaining strong despite IRA headwinds.

• Adjusted EBITDA for Q1 was $1.013 billion; adjusted EPS was $0.42 per share.

• Launched ACI Edge, consolidating 11 divisions into four regions and centralizing merchandising to accelerate execution and improve competitiveness.

• The company is accelerating execution and investing in its customer value proposition to improve long-term performance.

Financial highlights

• Net sales and other revenue increased 0.2% to $24,941.6 million for the quarter.

• Gross margin was 26.6%, down 23 basis points year-over-year, mainly due to digital sales mix shift and higher delivery, handling, and fuel costs.

• SG&A rate (excluding fuel) increased 42 basis points year-over-year, driven by rent, occupancy, litigation, transformation costs, and depreciation.

• Q1 interest expense rose to $167 million due to higher borrowings and interest rates.

• Digital sales grew 13% with penetration nearing 10.5%; e-commerce was profitable in Q1.

Outlook and guidance

• Fiscal 2026 identical sales expected between -1.5% to -0.5%, or 0% to 1% excluding a 150 basis point pharmacy IRA headwind.

• Adjusted EBITDA guidance: $3.55–$3.625 billion; adjusted EPS: $1.75–$1.85 per share.

• Capital expenditures projected at $1.9–$2 billion; effective tax rate expected at 24–25%.

• Modest improvement in identical sales anticipated in Q3 and Q4, mainly from grocery, as investments take effect.

• Adjusted net income per share forecast reduced from previous guidance of $2.22–$2.32.