Albertsons Companies, Inc. Reports Second Quarter Results
Boise, ID - October 15, 2018
Albertsons Companies, Inc. (the "Company") today reported results for the second quarter of fiscal 2018, which ended September 8, 2018.
Second Quarter of Fiscal 2018 Highlights and Update on Fiscal 2018 Outlook
Positive identical sales of 1.0%
Adjusted EBITDA increased 13.1% to $548.6 million
eCommerce sales growth of 113%
Own Brands sales penetration increased 44 basis points to 25.0%
Reaffirming fiscal 2018 Adjusted EBITDA of $2.7 billion and updating identical sales guidance to be in the range of 1.0% to 1.3% for the full year
Store conversions to Safeway IT systems are fully complete
"We are pleased with our second quarter results as identical sales grew for the third consecutive quarter and Adjusted EBITDA grew over 13% in the quarter compared to last year," said Jim Donald, Chief Executive Officer. "We are energized and enthusiastic about our Company and our ability to generate free cash flow and delever our balance sheet. The team continues to innovate through our digital engagement with customers in both the four-wall and no-wall environment, through our continued expansion of natural and organic Own Brands offerings and through the automation of our distribution centers which we believe will deliver strong returns going forward."
"We are also thrilled to have completed our store systems conversions related to the Safeway integration, which will allow our operators to relentlessly focus on running great stores," added Donald.
Second Quarter of Fiscal 2018 Results
Sales and other revenue increased $192.4 million, or 1.4%, to $14.0 billion during the 12 weeks ended September 8, 2018 ("second quarter of fiscal 2018") compared to $13.8 billion during the 12 weeks ended September 9, 2017 ("second quarter of fiscal 2017"). The increase was driven by an increase in fuel sales of $140.3 million and the Company's 1.0% increase in identical sales, partially offset by a reduction in sales related to the closure of 30 stores in the first two quarters of fiscal 2018.
Gross profit margin increased to 27.2% during the second quarter of fiscal 2018 compared to 27.0% during the second quarter of fiscal 2017. Excluding the impact of fuel, gross profit margin increased 40 basis points. The increase was primarily attributable to lower advertising costs and lower shrink expense as a percentage of sales compared to the second quarter of fiscal 2017.
Selling and administrative expenses decreased to 26.3% of sales during the second quarter of fiscal 2018 compared to 27.5% of sales for the second quarter of fiscal 2017. Excluding the impact of fuel, selling and administrative expenses as a percentage of sales decreased 110 basis points during the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017. The decrease in selling and administrative expenses was primarily attributable to gains related to property dispositions in the second quarter of fiscal 2018 and impairment charges related to underperforming stores in the second quarter of fiscal 2017 and the realization of the Company's cost reduction initiatives, partially offset by higher acquisition and integration costs as a result of converting 219 stores in the second quarter of fiscal 2018 compared to 82 stores in the second quarter of fiscal 2017 and third party costs related to the proposed merger with Rite Aid Corporation that was mutually terminated.
The following information was filed by Albertsons Companies, Inc. on Monday, October 15, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.