Albertsons lifts annual profit forecast, bets on pharmacy business, loyalty program

(Reuters) -Albertsons raised its annual profit forecast on Wednesday, as the grocer benefits from investments in its pharmacy operations and loyalty program, even as grocery demand took a hit because of intense competition from bigger retailers.

Shares of the company, which is hosting its first post-earnings call in more than two years, rose 3.2% in premarket trading after it beat third-quarter profit estimates.

Albertsons (NYSE:ACI ), which has sued Kroger (NYSE:KR ) after the grocer terminated their $25 billion deal, has been working on its pharmacy business, expanding it through its new digital health and wellness platform, Sincerely Health.

It has also enhanced its loyalty program to add newer vendors, to build on the strong membership growth seen by retailers across the country recently.

Analysts and investors on Wednesday's call would be keen to know the details of Albertsons' growth plans following the merger fallout with Kroger, and how it aims to rebuild its business in a highly competitive grocery market.

It now expects a fiscal year 2024 adjusted profit of $2.25 to $2.31 per share, compared to the previously forecast $2.20 to $2.30.

However, Albertsons lowered the upper end of its annual sales forecast as it faces stiff competition from bigger rivals including Walmart (NYSE:WMT ) and Kroger.

Heading into the holiday season, retailers across the country had introduced early deals starting in October, intensifying competition in the industry to attract customers seeking to buy essentials at the lowest prices.

Albertsons now expects annual 2024 identical sales growth in the range of 1.8% to 2.0%, compared to a prior forecast of 1.8% to 2.2%.



It saw quarterly net sales rise to $18.78 billion, from $18.56 billion a year earlier. Analysts on average were expecting $18.82 billion, according to data compiled by LSEG.

Albertsons posted third-quarter adjusted profit of 71 cents per share, compared with an expectation of 66 cents.

Source: Investing.com