Albertsons Companies, Inc. Reports Second Quarter Results
Boise, ID - October 16, 2019
Albertsons Companies, Inc. (the "Company") today reported results for the second quarter of fiscal 2019, which ended September 7, 2019.
Second Quarter of Fiscal 2019 Highlights
Identical sales growth of 2.4%; seventh consecutive quarter of identical sales growth
Net income of $294.8 million compared to a net loss of $32.4 million last year
Adjusted EBITDA increased 3.5% to $567.6 million compared to last year
Own Brands sales penetration of 25.3%
Online home delivery and Drive Up and Go sales growth of 40%
Net debt leverage of 2.9x
"The strong momentum in the business continued in the second quarter," said Vivek Sankaran, President and Chief Executive Officer. "Our identical sales were positive for the seventh consecutive quarter and represented our strongest identical sales performance in over three years as we continue to elevate the shopping experience for our customers. We are focused on driving sales growth by running the best stores, growing our loyal customer base, winning in eCommerce, and enhancing our Own Brands portfolio."
"At the same time, we are making strategic investments in the business to better leverage our scale, which are improving productivity and driving cost reductions," added Sankaran.
Second Quarter of Fiscal 2019 Results
Sales and other revenue increased 1.1% to $14.2 billion during the 12 weeks ended September 7, 2019 ("second quarter of fiscal 2019") compared to $14.0 billion during the 12 weeks ended September 8, 2018 ("second quarter of fiscal 2018"). The increase was driven by the Company's 2.4% increase in identical sales, partially offset by a reduction in sales related to the stores closed since the second quarter of fiscal 2018 and lower fuel sales. The identical sales benefited from increases in Own Brands sales and the Company's 40% growth in online home delivery and Drive Up and Go sales.
Gross profit margin increased to 27.8% during the second quarter of fiscal 2019 compared to 27.2% during the second quarter of fiscal 2018. The Company's total gross profit margin benefited from higher than normal fuel margins during the second quarter of fiscal 2019. Excluding the impact of fuel, gross profit margin increased 30 basis points compared to the second quarter of fiscal 2018, primarily due to improved shrink expense and increased Own Brands penetration, partially offset by continued reimbursement rate pressures in pharmacy and higher distribution center rent expense.
Selling and administrative expenses decreased to 26.8% of sales during the second quarter of fiscal 2019 compared to 27.2% of sales for the second quarter of fiscal 2018. Excluding the impact of fuel, selling and administrative expenses as a percentage of sales decreased 60 basis points. The decrease in selling and administrative expenses was primarily attributable to lower acquisition and integration costs as the store system conversions related to the Safeway integration were completed during fiscal 2018, lower depreciation and amortization expense, partially offset by strategic investments in digital and technology initiatives, higher employee wage and benefit costs and rent expense.
The following information was filed by Albertsons Companies, Inc. on Wednesday, October 16, 2019 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.