Albertsons cuts forecast to reverse sales decline
Albertsons Companies is overhauling its operations to reverse a sales decline, announcing a new initiative called ACI Edge. The grocery chain announced the restructuring Thursday alongside its first-quarter earnings, revealing that identical sales fell 0.8% during the period. CEO Susan Morris called the results “increasing pressure from softer industry unit trends and a more cautious consumer” in a statement. To address these challenges, the company has slashed its full-year outlook, now projecting identical sales to decline as much as 1.5% compared with previous guidance of up to 1% growth.
The company is consolidating 11 divisions into four regions to accelerate decision-making and leverage its scale more effectively. Each region will include local markets focused on strengthening customer connections, supporting stores, and driving results in their communities. The new structure divides the country into four specific areas. The California Region includes the Southern California and Northern California markets. The West Region includes the Mountain West, Portland and Seattle markets. The South Region includes the Southwest, Southern and United markets. The East Region includes the Jewel-Osco, Mid-Atlantic and Shaw’s markets.
Merch United brings together the buying power, data, and analytics of a national retailer with the customer focus and local insights of Albertsons’ market teams. Michelle Larson, executive vice president and chief merchandising officer, said the changes are designed to deliver “sharper value, greater differentiation in fresh, and an raised customer experience.” Larson added that center store centralization is an important next step in Merch United and in how the company builds a stronger, more connected merchandising organization. By bringing center store work together at the enterprise level, the company can better leverage its scale and create more capacity for regional and market teams to focus on fresh, local, and customer needs.
Fresh merchandising decisions will remain in the markets. These decisions will continue to be guided by the Merch United strategy, local customer preferences, and market needs. Regional and market teams will continue to play an essential role in serving customers, supporting stores, and delivering locally relevant experiences. The operational overhaul represents a significant shift in strategy for a retailer that has historically operated with a high degree of local autonomy. The move mirrors similar consolidation efforts seen across the industry as traditional grocers fight to maintain relevance against discount chains and warehouse clubs.
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While these results did not meet expectations, they highlighted the need to move faster. Morris said the company is choosing to accelerate investments in its customer value proposition and the customer experience ahead of expected productivity benefits. The Boise, Idaho-based grocer reported net income of $85 million, or 17 cents per share, for the 16 weeks ended June 20. This figure is down from $236.4 million, or 41 cents per share, a year earlier. Adjusted earnings fell to 42 cents per share from 55 cents.
Net sales edged up 0.2% to $24.94 billion. This increase was driven entirely by higher fuel sales as core grocery sales weakened. Adjusted EBITDA dropped to $1.01 billion from $1.11 billion in the year-ago period. Bright spots included digital sales, which jumped 13%, and pharmacy, which continued growing despite headwinds from the Inflation Reduction Act. However, those gains could not offset weakness in core grocery categories. Gross margin contracted to 26.6% from 27.1%. This decline was pressured by higher delivery costs tied to digital growth and increased fuel expenses. The company also invested more heavily in customer value initiatives.
Albertsons now expects fiscal 2026 adjusted EBITDA of $3.55 billion to $3.63 billion. This range is down from a prior forecast of $3.85 billion to $3.93 billion. The company cut its adjusted earnings forecast to $1.75 to $1.85 per share from $2.22 to $2.32. Identical sales are now projected to fall 0.5% to 1.5%. Capital spending will be reduced to $1.9 billion to $2 billion from $2 billion to $2.2 billion. Morris said the company is moving decisively to strengthen its competitive position through these operational changes and accelerated investments. The company operates approximately 2,200 stores across 34 states under banners including Safeway, Vons, Jewel-Osco, Shaw’s, and Acme Markets.
The retailer is also expanding its digital footprint to capture more market share. Recent data suggests the company is on track to claim the number two spot in market share, a position that could solidify its standing against major competitors like Walmart and Kroger. [1]Kroger set to claim No 2 market share
