Shares of Albertsons (ACI, Financial) experienced a significant decline today, dropping 7.56% to $19.94. The stock movement was prompted by Albertsons' forward profit guidance, which fell short of analysts' expectations, despite the grocery chain's quarterly earnings meeting prior estimates.
Albertsons (ACI, Financial) reported a 2.5% revenue increase for the fourth quarter, reaching $18.8 billion. This growth was driven by a 2.3% rise in same-store sales, aligning with market forecasts. However, adjusted earnings per share (EPS) fell by 15% to $0.46, though this figure was better than the expected $0.41.
Looking ahead, Albertsons provided full-year 2025 EPS guidance of $2.03 to $2.16. This is significantly below the anticipated $2.28, marking the third consecutive year of adjusted earnings declines. Revenue growth was bolstered by pharmacy services and a 24% increase in digital and delivery initiatives, which are lower-margin and required additional investment, impacting gross margins.
In terms of valuation, Albertsons holds a Price-to-Earnings (PE) ratio of 11.2 and a Price-to-Book (PB) ratio of 3.43, both highlighting its relatively undervalued status compared to industry medians. The company's GF Value is estimated at $21.24, suggesting it is fairly valued. For more details on Albertsons' GF Value, you can visit the GF Value page.
The transition in leadership with the retirement of CEO Vivek Sankaran on May 1 to be succeeded by COO Susan Morris could have influenced the conservative guidance, potentially setting up for future performance to outperform guidance. Albertsons still faces competitive challenges following a failed takeover by Kroger last year.
