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1. Company Snapshot

1.a. Company Description

Albertsons Companies, Inc., through its subsidiaries, engages in the operation of food and drug stores in the United States.The company's food and drug retail stores offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services.It also manufactures and processes food products for sale in stores.


As of February 26, 2022, it operated 2,276 stores under various banners, including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw's, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Markets, and Balducci's Food Lovers Market; and 1,722 pharmacies, 1,317 in-store branded coffee shops, 402 adjacent fuel centers, 22 distribution centers, and 20 manufacturing facilities, as well as various digital platforms.The company was founded in 1860 and is headquartered in Boise, Idaho.

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1.b. Last Insights on ACI

Albertsons Companies' recent performance was negatively impacted by margin pressure and pricing investments, which overshadowed its Q3 earnings beat and year-over-year sales growth. The company's digital growth and EPS expectations were exceeded, but its stock value declined to new multi-year lows. Analysts' price targets suggest a potential upside, but short-term challenges persist. Institutional investors, such as CWA Asset Management Group, have invested in the company, purchasing $3.31 million worth of shares.

1.c. Company Highlights

2. Albertsons Companies Delivers Mixed Q3 2025 Earnings

Albertsons Companies reported a mixed bag in its third-quarter 2025 earnings, with identical sales growing 2.4% and digital sales rising 21% year-over-year. The company's adjusted EBITDA came in at $1.039 billion, while adjusted EPS was $0.72 per diluted share, in line with expectations. Gross margin was 27.4%, a decline of 55 basis points year-over-year, excluding fuel and LIFO. The company's selling and administrative expense rate decreased 33 basis points year-over-year, excluding fuel.

Publication Date: Jan -08

📋 Highlights
  • Identical Sales Growth:: Sales rose 2.4%, with digital sales surging 21% year-over-year.
  • Adjusted EBITDA Performance:: Reported $1.039 billion, with updated 2025 guidance of $3.825–$3.875 billion.
  • Loyalty Membership Expansion:: Reached 49.8 million members, driving 2-3x higher spending for digitally engaged customers.
  • Capital Allocation:: $462 million invested in CAPEX, opening 2 stores, remodeling 23, and closing 16 underperforming locations.
  • Pharmacy and Cost Savings Progress:: Pharmacy business on track for accelerated growth, with $1.5 billion cost savings plan advanced via tech and automation.

Operational Highlights

The company continued to invest in its business, with $462 million in capital expenditures, opening two new stores, completing 23 remodels, and closing 16 underperforming locations. It also returned $77 million to shareholders through its quarterly dividend and continued its $750 million accelerated share repurchase program. The company's loyalty membership grew to 49.8 million, and its media collective delivered double-digit growth year-over-year.

Outlook and Guidance

The company updated its 2025 outlook, expecting identical sales to be 2.2% to 2.5%, adjusted EBITDA to be $3.825 billion to $3.875 billion, and adjusted EPS to be $2.08 to $2.16. For 2026, the company expects to face headwinds such as volume pressure within food and lower Medicare drug prices, but believes it can still deliver its algorithm driven by growth in digital platforms, merchandising intelligence, and customer experience.

Valuation and Growth Prospects

With a P/E Ratio of 9.84 and an EV/EBITDA of 7.6, the company's valuation appears reasonable. Analysts estimate next year's revenue growth at 0.5%. The company's ROIC is 5.67%, and ROE is 28.54%, indicating a decent return on investment. The Net Debt / EBITDA ratio is 4.81, which is relatively high. The Dividend Yield is 3.73%, providing a stable source of return for investors.

Digital and Pharmacy Growth

The company's digital sales grew 21%, with over half of orders delivered in under three hours. The pharmacy business saw an exceptionally strong quarter, driven by immunizations and value-added services. The company expects margin improvement as it scales adoption and embeds AI into its operations. The Inflation Reduction Act's Medicare drug price negotiation program is expected to have a near-neutral impact on profit.

Cost Savings and Productivity

The company has made progress on its $1.5 billion cost savings plan, driven by technology, automation, and analytics. It expects to continue to deliver cost savings in 2026, which will fuel reinvestment in growth and customer value. The company is pleased with the productivity flowing through to the bottom line, which is fueling growth through reinvestment in price and customer experience.

3. NewsRoom

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Albertsons® Companies Unveils Celebrations, A Digital Hub for Effortless Party Planning and Occasions Made Easy

Feb -04

Source: businesswire.com

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Alpha Modus Financial Services Selects ACI Worldwide to Power National-Scale Remittance and Bill Pay Infrastructure for Alpha Cash

Feb -03

Source: globenewswire.com

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ACI Wins Multi-Year Caterpillar Engagement as Strategic Technology Transformation Partner

Feb -03

Source: prnewswire.com

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ACI Worldwide Report: Global Refund Volumes Surge 18% as Retailers Tighten Returns

Feb -03

Source: businesswire.com

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Albertsons Companies Names Allison Pinkham Executive Vice President and Chief Human Resources Officer

Jan -26

Source: businesswire.com

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Albertsons Companies, Inc. (NYSE:ACI) Given Consensus Rating of “Hold” by Brokerages

Jan -26

Source: defenseworld.net

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Albertsons® Companies, Inc. Announces Pricing of Its Senior Notes Offering

Jan -22

Source: businesswire.com

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Albertsons: Is This Stock Too Good To Be True?

Jan -22

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.80%)

6. Segments

Non-perishables

Expected Growth: 1.8%

Albertsons Companies, Inc.'s non-perishables segment growth of 1.8% is driven by increasing demand for convenient and shelf-stable products, private label expansion, and strategic pricing. Additionally, the company's focus on e-commerce and omnichannel capabilities, as well as its efforts to optimize supply chain and logistics, contribute to the segment's growth.

Fresh

Expected Growth: 1.9%

Fresh from Albertsons Companies, Inc. growth of 1.9% is driven by increasing demand for online grocery shopping, strategic investments in digital capabilities, and expansion of same-day delivery services. Additionally, the company's focus on private label offerings, loyalty programs, and targeted marketing efforts contribute to its growth momentum.

Pharmacy

Expected Growth: 1.7%

Albertsons Companies, Inc.'s pharmacy segment growth of 1.7% is driven by increasing demand for specialty medications, expansion of Medicare and Medicaid programs, and strategic partnerships with healthcare providers. Additionally, the company's focus on immunizations, health clinics, and patient engagement programs contributes to the growth.

Fuel

Expected Growth: 1.5%

Albertsons Companies, Inc.'s 1.5% fuel growth is driven by increasing same-store sales, strategic pricing, and operational efficiencies. Additionally, the company's focus on private label offerings, loyalty programs, and convenient services such as curbside pickup and delivery contribute to the growth.

Other

Expected Growth: 1.6%

Albertsons' 1.6% growth in 'Other' segment is driven by increased sales in its pharmacy and clinic businesses, as well as growth in its online shopping and curbside pickup services. Additionally, the company's focus on private label products and cost savings initiatives have contributed to the segment's growth.

7. Detailed Products

Grocery Products

Albertsons Companies, Inc. offers a wide range of grocery products, including fresh produce, meat, dairy, bakery, and packaged goods.

Pharmacy Services

The company operates pharmacies within its stores, offering prescription filling, immunizations, and health clinics.

Floral and Gift Services

Albertsons Companies, Inc. offers floral arrangements, bouquets, and gift items for special occasions.

Liquor and Wine

The company operates liquor and wine departments within its stores, offering a selection of beer, wine, and spirits.

Delicatessen and Prepared Foods

Albertsons Companies, Inc. offers a variety of prepared foods, including sandwiches, salads, and hot foods.

Bakery and Coffee Services

The company operates in-store bakeries and coffee shops, offering fresh-baked goods and specialty coffee drinks.

Online Grocery Shopping and Delivery

Albertsons Companies, Inc. offers online grocery shopping with delivery or curbside pickup options.

8. Albertsons Companies, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Albertsons Companies, Inc. operates in a highly competitive grocery market, with many substitutes available to customers. However, the company's strong brand recognition and loyalty programs help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Albertsons Companies, Inc. has a large customer base, but customers have significant bargaining power due to the availability of substitutes and the ease of switching to competitors.

Bargaining Power Of Suppliers

Albertsons Companies, Inc. has a diverse supplier base, and suppliers have limited bargaining power due to the company's large scale and purchasing power.

Threat Of New Entrants

The grocery market has high barriers to entry, including significant capital requirements and complex logistics. This limits the threat of new entrants to Albertsons Companies, Inc.

Intensity Of Rivalry

The grocery market is highly competitive, with many established players competing for market share. Albertsons Companies, Inc. faces intense rivalry from competitors such as Walmart, Kroger, and Costco.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.00%
Debt Cost 3.95%
Equity Weight 100.00%
Equity Cost 6.50%
WACC 6.50%
Leverage 0.00%

11. Quality Control: Albertsons Companies, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Cal-Maine Foods

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Value: 8.5

Growth: 9.4

Quality: 7.8

Yield: 10.0

Momentum: 3.0

Volatility: 6.0

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Village Super Market

A-Score: 6.6/10

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Growth: 4.9

Quality: 4.7

Yield: 7.0

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Albertsons

A-Score: 6.3/10

Value: 7.6

Growth: 5.4

Quality: 3.7

Yield: 9.0

Momentum: 3.5

Volatility: 8.3

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Ingredion

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Value: 7.2

Growth: 6.6

Quality: 6.1

Yield: 6.0

Momentum: 1.5

Volatility: 10.0

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Growth: 5.6

Quality: 6.0

Yield: 5.0

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A-Score: 3.9/10

Value: 4.6

Growth: 8.1

Quality: 5.4

Yield: 0.0

Momentum: 0.5

Volatility: 5.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

17.76$

Current Price

17.76$

Potential

-0.00%

Expected Cash-Flows