Albertsons Lowers Sales Outlook, Pharmacy Pressures Weigh

Albertsons Companies, Inc. (NYSE:ACI) announced on Wednesday third-quarter fiscal 2025 results for the 12 weeks ended November 29, 2025. Adjusted EPS was 72 cents, beating an estimate of 68 cents, while net sales and other revenue increased 1.9% to $19.123 billion, missing an estimate of $19.169 billion.

Net income was $293.3 million, or 55 cents per share, compared with $400.6 million, or 69 cents per share, a year earlier. Adjusted net income was $390.3 million, or 72 cents per share, compared with $420.3 million, or 71 cents per share, in the prior-year quarter.

Adjusted EBITDA was $1,038.7 million, or 5.4% of net sales and other revenue, compared with $1,065.1 million, or 5.7%, a year earlier.

Identical sales increased 2.4%, and digital sales increased 21%, while loyalty members rose 12% to 49.8 million. The company estimates that a temporary government shutdown and related delayed SNAP funding negatively impacted identical sales by approximately 10 to 20 basis points.

The gross margin rate decreased to 27.4% from 27.9%, which the company attributed to higher delivery and handling costs tied to digital growth and strong pharmacy sales growth, which it said carry an overall lower gross margin rate.

Selling and administrative expenses decreased to 24.9% of net sales and other revenue, down from 25.1%, primarily driven by employee cost leverage and lower merger-related costs, partially offset by higher business transformation costs.

Income tax expense rose to $84.4 million in the third quarter of fiscal 2025, reflecting a 22.3% effective tax rate, compared with $14.5 million, or a 3.5% rate, a year earlier, as the prior-year quarter benefited from $81.0 million in one-time state tax audit settlements.

Cash and cash equivalents were $195.1 million as of November 29, 2025, and total debt (including finance leases) was $9,012.7 million. Net cash provided by operating activities was $1,649.6 million for the first 40 weeks of fiscal 2025, compared with $1,922.1 million a year earlier.

Management Commentary

“Our investments in technology and AI are fundamentally reshaping how we operate and serve our customers; driving smarter decisions, greater efficiency, and more personalized experiences. Growth in our digital and pharmacy channels, combined with disciplined execution and targeted investments, is strengthening our value proposition and positioning us for success,” commented Susan Morris, Chief Executive Officer.

The company announced a fourth-quarter fiscal 2025 cash dividend of 15 cents per share, payable February 6, 2026, to stockholders of record as of January 23, 2026.

Outlook

For fiscal 2025, Albertsons updated its outlook to identical sales growth of 2.2% to 2.5%, lower at the midpoint compared with its earlier target range of 2.2% to 2.75%. Adjusted EBITDA is expected in the range of $3.825 billion to $3.875 billion.

The company tightened its fiscal 2025 adjusted EPS guidance, raising the low end to $2.08 from $2.06 and trimming the high end to $2.16 from $2.19, compared with a $2.14 Street estimate.

The company said the outlook reflects “a 16 to 18 basis point impact for fiscal 2025 or a 65 to 70 basis point impact for the fourth quarter of fiscal 2025 related to the Inflation Reduction Act’s Medicare Drug Price Negotiation Program which took effect on January 1, 2026, resulting in lower pharmacy sales.”

ACI Price Action: Albertsons Companies shares were down 0.64% at $17.00 at the time of publication on Wednesday, according to Benzinga Pro data.

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