Earnings

Albertsons Stock Gains on Q2 Earnings Beat, Raised Outlook

The grocery giant surpassed analyst expectations and lifted its full-year sales forecast, citing strong digital growth and pharmacy performance.

Albertsons Companies (NYSE: ACI) saw its shares climb Tuesday after the grocery retailer posted second-quarter earnings that topped Wall Street estimates and raised its full-year guidance. The company reported adjusted earnings of $0.44 per share on revenue of $18.91 billion, that projected earnings of $0.40 per share. The positive results were driven by a significant 23% year-over-year surge in digital sales and a 2.2% increase in identical sales, primarily fueled by strong performance in its pharmacy division. Following the strong quarterly performance, Albertsons announced a $750 million accelerated share repurchase program, signaling confidence in its financial position and commitment to delivering shareholder value.

Building on the strong quarterly performance, Albertsons management for identical sales growth to a range of 2.2% to 2.75%, an increase from the prior outlook. The company also boosted its adjusted earnings per share (EPS) guidance for the fiscal year to a range of $2.06 to $2.19. This optimistic outlook reflects the company's successful adaptation to changing consumer habits, with a growing emphasis on online ordering and pharmacy services. The robust growth in digital channels highlights the effectiveness of Albertsons' investments in its e-commerce platform and omnichannel strategy, positioning it to compete effectively in the evolving grocery landscape.

Wall Street has reacted favorably to the news, with many analysts maintaining a positive outlook on the stock. The median 12-month price target among analysts is $24.00, representing a nearly 30% potential upside from its recent closing price. Ahead of the earnings release, several investment firms, including BMO Capital and Tigress Financial, had already upgraded their ratings or raised their price targets on ACI shares, . The better-than-expected results and confident forward guidance are likely to reinforce this bullish sentiment. Investors will be closely watching the company's ability to sustain its digital momentum and manage inflationary pressures in the coming quarters. The announced share buyback is also expected to provide support for the stock price moving forward, as the company continues to execute on its strategic priorities.