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Revenue, Profit Up at Albertsons in Q3

Revenue, Profit Up at Albertsons in Q3
Written by Publishing Team

Higher prices and an increase in customer traffic related to vaccines led Albertsons Cos to report higher-than-expected sales and profits for the third quarter on January 11.

For the third quarter ended December 4, Albertsons same-store sales rose 5.2%; On a two-year cumulative basis, corporate sales growth was 17.5%. Digital sales increased 9%; On a two-year stack basis, digital sales growth was 234%. Revenue was $16.7 billion. Net income was $425 million, or 74 cents per Class A common share. Excluding the fuel impact, gross margin ratio was 28.9%, an increase of 10 basis points compared to the third quarter of fiscal 2020.

Albertsons raised its guidance for adjusted earnings and sales growth for the full fiscal year. The grocer now expects full-year adjusted earnings per share of $2.90 to $2.95, up from a previous forecast of $2.50 to $2.60. Albertsons said Combs is likely to fall 0.8% to 1.2%, better than the previously expected drop of 2.5% to 3.5%.

“We are pleased with the third quarter results as we continue to implement our turnaround strategy. The favorable economic background combined with the heroic performance of our retail, distribution and manufacturing teams contributed to these better-than-expected results,” said Vivek. Sankaran, CEO. “These results were also driven by our continued focus on in-store excellence, acceleration of our digital and multi-channel capabilities, and delivery of our production initiatives. During the quarter, we continued to gain market share in both units and dollars and saw a continuous improvement in the customer experience both in-store and online.”

The company says retail price inflation and increased sales related to administering COVID-19 vaccines contributed to a 5.2% increase in businesses.

The increase in the gross margin rate is primarily due to productivity initiatives, improved pharmacy margins related to the administration of COVID-19 vaccines and preferred product mix, which were largely offset by lower gross margin rates across certain product categories due to the impact of the rate of increase in product costs paid by Before the current inflationary environment, as well as rising supply chain costs.

Albertsons selling and administrative expenses decreased to 25.4% of net sales and other income during the third quarter. The decrease in selling and administrative expenses was primarily attributable to lower expenses related to COVID-19 and implementation of productivity initiatives, which were offset by higher staff costs, depreciation and other expenses related to the company’s investments in its digital capabilities, multi-channel and other strategies and priorities. The increase in staff costs was the result of additional labor to support the increase in new sales, increases in the market driven wage rate and higher compensation expense on an equity basis.

Adjusted EBITDA was $1,051.2 million, or 6.3% of sales, during the third quarter of fiscal 2021 compared to $967.7 million, or 6.3% of sales, during the third quarter of fiscal 2020.

During the first 40 weeks of fiscal year 2021, the company spent $1,216.4 million in capital expenditures, which included investments in digital technology, opening nine new stores and completing 146 stores.

In November, Albertsons launched a retail media network called Albertsons Media Collective, led by Kristi Argillan, Albertsons Cos. Senior Vice President of Retail Media. Offer partners a digital marketing platform and omnichannel solutions with the primary consumer in mind.

“We are thrilled to be able to create a premium retail media network that allows our customers to interact with the foods and brands they love,” Argelan said. “Albertsons Media Collective will advance our goal of bringing brands and our customers together by delivering an unparalleled seller and customer experience and reimagining marketing for what’s next.”

Albertson Media Collective, developed in partnership with CitrusAd and Merkle, is focused on providing opportunities to connect brands with the most loyal shoppers by unlocking original offering and sponsored product inventory across the company’s websites. Media opportunities include ad placements on Albertsons-owned properties such as its homepage, department, category, subcategory, email, search, app and pharmacy, as well as on Albertsons off-site targeted ad placements.

Brand campaigns will start on February 27th and will allow partners to access some of the most valuable locations across Albertsons Cos. Websites and apps, which benefit more than 100 million shoppers across the country, including more than 2,200 store locations and more than 27 million members of the Just for U.

Albertsons, based in Boise, Idaho, operates more than 2,200 retail stores with more than 1,700 pharmacies, 400 associated fuel centers, 22 dedicated distribution centers and 20 manufacturing facilities. It operates stores in 34 states and the District of Columbia under more than 20 well-known signs, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs and Kings Food Markets and Balducci’s foodie market. Albertsons is #8 on the PG 100, Progressive Grocer 2021 list of North America’s Best Food and Consumables Retailers.

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Publishing Team