Albertsons sinks as the grocery chain’s profit outlook underwhelms Wall Street
The grocer is beefing up its loyalty program and cutting costs after its Kroger merger fell through.
Shares of Albertsons dropped sharply Tuesday after the grocery chain gave softer-than-expected guidance for the year, despite topping earnings estimates.
The company posted Q4 sales of $18.8 billion, slightly ahead of FactSet estimates, thanks in part to a boost from its pharmacy division. Earnings came in at $0.46 per share, beating forecasts of $0.41. Still, investors weren’t impressed. Albertsons now expects fiscal 2025 adjusted earnings between $2.03 and $2.16 per share — well below the $2.28 analysts had penciled in. It also sees same-store sales rising 1.5% to 2.5% this year, compared with Wall Street’s 1.8% average estimate.
Since its $24.6 billion merger with Kroger publicly fell through in December, Albertsons has been reworking its strategy. The grocer is now leaning heavily into its “Customers for Life” loyalty program and plans to cut $1.5 billion in costs over the next three years to stay competitive. Tuesday’s sell-off erased most of the stock’s gains for the year — Albertsons is up about 3% year to date.
