- Albertsons Q4 adjusted profit beats analysts' estimate
- Expects margins to be flat to slightly better in 2026
- To pay $774 mln over 9 years to settle opioid lawsuits
April 14 (Reuters) - U.S.-based grocer Albertsons forecast annual sales below Wall Street estimates on Tuesday, signaling pressure on demand from fierce competition with bigger rivals, including Walmart and Amazon.com, sending its shares down 4%.
Larger rivals, including Walmart, Target and Kroger, have been slashing prices on essentials to lure in increasingly value-conscious shoppers, putting pressure on Albertsons to offer affordable groceries.
"What we're seeing is increasing pressure on the lower-income cohorts... the middle-income customers remain more stable in terms of the pressures that we're seeing there, but that said, we recognize our customers are focused on value," CEO Susan Morris said on a post-earnings call.
The Boise, Idaho-based company expects identical sales growth for fiscal 2026 in the range of flat to up 1%, compared with analysts' average estimate of a 1.58% increase, according to data compiled by LSEG.
"Albertsons' results reflect the challenges facing traditional supermarkets as they compete with both discount grocers and specialty players," said Michael Gunther, SVP, research and market intelligence at Consumer Edge.
Its fourth-quarter gross margin stood at 27.2%, compared with 27.4% a year ago.
The company, which also operates hundreds of gas stations, said it expects margins to be flat to slightly better in 2026, accounting for higher transportation and distribution expenses due to rising fuel costs arising from the Iran conflict.
In the fourth quarter, Albertsons posted a net loss of $480.8 million compared with a profit of $171.8 million a year ago, as it accounted for charges from opioid-related claims.
Albertsons said on Tuesday it would pay out $774 million over nine years to resolve thousands of lawsuits by U.S. states, local governments and Native American tribes claiming the supermarket chain's pharmacies helped fuel the nation's opioid epidemic.
The company's quarterly adjusted profit per share of 48 cents, however, beat the estimate of 43 cents.
It forecast annual adjusted profit to be between $2.22 and $2.32 per share, with the midpoint slightly below the estimate of $2.28.
Reporting by Sanskriti Shekhar in Bengaluru; Editing by Shilpi Majumdar
Source: Reuters