US grocer Albertsons pulls annual outlook, accelerates turnaround efforts

Oct 13 — Albertsons withdrew its fiscal 2026 forecasts on Tuesday and launched a review of its business aimed at ​cutting costs, lowering prices and reversing sluggish sales.

The US grocer has battled cautious consumer spending, particularly by lower-income shoppers, as food and fuel costs climb, alongside market share loss to ‌mass retailers such as Walmart, discount chains and private-label brands.

The review builds on a restructuring, announced in July, and is expected to ⁠be completed in the fourth quarter ending ​February 2027.

By then, Albertsons also aims to provide ⁠fresh short- and long-term financial targets alongside a "comprehensive turnaround plan".

"We must turn things around," Meg Whitman, the ‌former eBay and Hewlett-Packard CEO ‌who was named executive chair last month in a newly created role to help ⁠the grocer "sharpen its strategy and strengthen execution", said on ⁠a post-earnings call.

The company needs to move faster to cut costs and reinvest much of those savings to lower prices and improve store experience, she said.

CEO Susan Morris said Albertsons had accumulated too many initiatives, processes and layers of complexity over time, slowing the organization and increasing costs.

"We're not satisfied with the results and the current trajectory of our business," she said.

The expanded ‌turnaround effort comes nearly two years after Albertsons' proposed $24.6 billion merger ​with Kroger collapsed after a federal court blocked the deal on antitrust grounds. Albertsons subsequently terminated the agreement.

The company's shares rose 2% on Tuesday, reversing premarket losses. They had fallen 27% so far this year.

"They have hard time remaining competitive on price as some mass merchants such as Walmart have used grocery as a traffic driver and have other high margin categories such as fashion to offset food's low margins," said Bruce Winder, an independent retail consultant.

In July, Albertsons ​outlined plans to expand private-label offerings and improve e-commerce, while restructuring its 11 divisions into four regions and centralizing merchandising.

Albertsons ‌on Tuesday described ‌those changes as ⁠the first step in its broader turnaround.

"We'll exit areas that are underperforming," Morris said on Tuesday.

Albertsons in July forecast fiscal 2026 adjusted earnings per share in the range of $1.75 to $1.85 and projected annual identical sales to decline in the range of 0.5% to 1.5% after trimming its annual target.

The grocer on Tuesday ‌reported that its same-store sales ​in the second quarter ended September 12 fell 0.8%.

But ‌adjusted profit of 36 cents ⁠per share beat estimate ​of 33 cents, according to data compiled by LSEG.

(Reporting by Sanskriti Shekhar in Bengaluru; Editing by Sahal Muhammed ​and Sriraj Kalluvila)

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