Albertsons Q4 and full year sales show steady gains

Date : 01 May 2020

Keshia Beadle

Senior Retail Analyst

We review Albertsons' fourth quarter and full year sales, which put the business in a strong position for being listed publically.

Ecommerce up 39% in 2019

Net sales for the fourth quarter were up 10.1% to $15.44bn, however this includes an extra week compared to 2018. Same store sales were up 1.8% and this reflects the negative impact from the timing of Thanksgiving in 2019. Digital sales were up 32%, with digital coupon redemption up 37%. The retailers Just For U loyalty program enrollments were also up 26%, reflecting the work the retailer has done in these areas. Its curbside pick up service, Drive Up & Go, is now available in around 550 locations and it plans to expand this to 1,400 locations in the next two years.

For the 53 week full year, sales were up 3.2% to $62.46bn, with same store sales up 2.1%. Digital sales for the year were up 39%. Gross profit margin also increased, up to 28.2% from 27.9% in 2018. This was boosted by an improved product mix, including higher penetration in private label and organic/natural items.

Capital expenditure and outlook for 2020

In 2019, Albertsons capital expenditure was around $1.5bn, which included 14 new stores, 243 store remodels and investments in technology and distribution centre automation. However, due to the Coronavirus (COVID-19) pandemic, the retailer is unable to provide detailed 2020 guidance.

Sales were up 34% for the first eight weeks of the 2020 financial year, whilst Albertsons continues to invest in additional safety measures, worker compensation and hiring additional employees. The huge increase in demand for online services saw ecommerce sales grow by 243% in the first eight weeks of the financial year. The majority of the additional employees hired during this time have been directed to supporting these services. Prior to the COVID-19 pandemic, same store sales for 2020 were forecast to grow by 2%, with capital expenditures of $1.5bn. Despite the uncertainty resulting from the pandemic, Albertsons remains confident it can achieve or exceed the original forecast.

For further information on Albertsons plan to go public, please click here.

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