Albertsons this morning said that its Q3 same-store sales were up 7.9 percent, while e-commerce sales were up 33 percent. Q3 net sales were up to $18.2 billion from $16.7 billion during the same period a year earlier, while net income for the period was $375.5 million, down from $424.5 million a year earlier.
CEO Vivek Sankaran, in a prepared statement, said, “”Our investments in digital transformation, differentiation in Own Brands and Fresh offerings, and the modernization of our operational capabilities contributed to these results … As we look ahead to the balance of the year and into fiscal 2023, we believe that all of these initiatives position us well to continue to drive top-line growth and deepen our customer and community engagement both online and in-store. At the same time, our ongoing productivity engine is expected to continue to support our investments and partially offset anticipated inflationary cost increases, declines in COVID-19 vaccination and at-home test kit revenue, and macro-consumer headwinds.”
KC’s View:
Albertsons may have had a strong quarter, fueled in part by inflation that creates higher sales numbers, but it is going to spend much of the next year weathering legislative, regulatory and popular reactions to its proposed $24.6 billion acquisition by Kroger. And, more immediately, it has to get the $4 billion special dividend cleared by the courts.
The biggest challenge that Sankaran has, it seems to me, is maintaining a focus on innovation and other initiatives while keeping the company’s eyes on the prize. I think they’ll get there and that the merger will go through, but it my end up being a contentious year on a lot of levels. The best thing Albertsons can do – and Kroger, for that matter – is to keep telling the story. Don’t just focus on the numbers, but create a compelling narrative that focuses on people and communities, with specific anecdotes that speak to opportunity at a variety of levels.
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