US food and drug retailer Albertsons has recorded $24.88bn in net sales and other revenue in the first quarter (Q1) of fiscal 2025 (FY25) - a 2.5% increase from the corresponding quarter of the previous fiscal year.
This growth was primarily driven by a 2.8% increase in identical sales, with pharmacy sales contributing to this rise.
The company’s digital sales experienced a notable 25% increase during Q1 FY25. The loyalty programme also saw a notable expansion, with membership growing 14% to 47.3 million.
Net income for the quarter stood at $236.4m, or $0.41 per share - a decrease from $240.7m reported in Q1 FY24.
The retailer also observed a decline in its gross margin rate to 27.1% in Q1 FY25 from 27.8% in the same period of the previous fiscal year, mainly due to investments in customer value, lower gross margin in pharmacy sales, and higher delivery and handling costs.
Albertsons' adjusted net income for the quarter stood at $318.9m, or $0.55 per share, while adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) were $1.11bn, or 4.5% of net sales.
Sales and administrative expenses of Albertsons fell to 25.4% of net sales, compared with 25.9% in the previous year. This reduction was largely attributed to lower merger-related costs and the leveraging of employee costs and operating expenses.
Albertsons CEO Susan Morris stated: "In the first quarter, we delivered solid operating and financial performance, while investing in our core operations and improving our customer value proposition.
"Ongoing investments in our strategic priorities drove increased engagement across our digital platforms, evidenced by strong growth in our digital sales, pharmacy operations and membership in our loyalty programme. To fuel these investments, we leveraged our productivity engine to drive efficiencies throughout our operations."
For the full fiscal year 2025, Albertsons raised its guidance with identical sales growth expected to be in the range of 2% to 2.75%.
Adjusted EBITDA remained unchanged and is projected to be between $3.8bn and $3.9bn.
The adjusted net income per Class A common share is projected to be between $2.03 and $2.16, with an effective income tax rate of 23.5% to 24.5% and capital expenditures ranging from $1.7bn to $1.9bn.
