Albertsons profits plunge, and sales weaken as Margaret Whitman calls for cost cuts, lower prices and sweeping changes.
- Albertsons Executive Chair Margaret Whitman admitted sales growth and market share have fallen short of expectations.
- She called for faster cost cuts, lower prices, and a broad business review.
- Albertsons’ Q2 revenue slipped 0.1% to $18.9 billion, while net income plunged to $51.5 million from $168.5 million.
Albertsons Companies Inc. (ACI) withdrew its financial outlook after second-quarter sales and profit fell, and Executive Chair Margaret Whitman called for faster cost cuts, lower prices and a broad review of the business.
Albertsons stock rose 1% in the regular session and slipped 0.2% in overnight trading on Tuesday. The stock is down more than 23% this year, on track for its worst annual performance since 2022.
Albertsons’ Performance Review And Turnaround Plans
During the company’s second-quarter (Q2) fiscal 2027 earnings call, Whitman acknowledged disappointing financial results and weakening market share trends.
“Our performance has fallen short. Sales and earnings growth have not met our expectations. Market share trends have lagged and despite many individual successes across the business, we’re not delivering results consistent with the quality of our assets,” she said.
She emphasized the need for a comprehensive review of current business practices and to identify changes that benefit shoppers and shareholders.
“We must move faster to reduce costs, reinvest much of those savings into lower prices, improve the store experience for customers, grow traffic and share in core markets, drive ID sales and revenue and improve returns for shareholders. Albertsons must become a simpler, more focused company that gets the basics right every day.”
“Albertsons must move faster to change the trajectory of the business.”
Albertsons’ Q2 Profit Plunges As Sales And Margins Weaken
Albertsons’ Q2 sales fell 0.1% year-on-year to $18.9 billion, while its gross margin slipped to 26.8% from 27%. Identical sales fell 0.8%. Net income dropped to $51.5 million from $168.5 million. Adjusted earnings fell to $179 million, or $0.36 per share, from $248.4 million, or $0.44 per share. The company has withdrawn its financial outlook.
The Idaho-based retailer, which operates about 2,200 locations, has struggled to regain momentum after its proposed combination with Kroger (KR) fell apart in 2024. Albertsons is also pursuing at least $8 billion from Kroger through litigation related to their abandoned merger.
Grocery stores are facing higher fuel, food and labor costs. As prices rise, shoppers are making fewer trips and spending less, putting more pressure on supermarket companies.
ACI stock: Retail View
On Stocktwits, retail sentiment around the stock fell to ‘bearish’ from ‘neutral’ territory the previous day.
ACI stock has declined nearly 25% in the last twelve months.
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