Albertsons sales boosted by fuel
Privately held grocery company Albertsons Cos. said third-quarter sales increased, driven by higher fuel sales.
The food and drug retailer, which owns Safeway and other chains, said sales and other revenue rose 1.8% to $13.8 billion from $13.6 billion in the year-ago period. The increase was driven by the 1.9% increase in identical sales and higher fuel sales of $91.7 million, partially offset by a reduction in sales from stores closed in the first three quarters. Identical sales include stores operating during the same period in both the current and prior fiscal years, comparing sales on a daily basis. Direct to consumer internet sales are included in identical sales and fuel sales are excluded.
Net income was $45.6 million, down from net income of $218.1 million a year earlier.
Third-quarter results were affected by the industry-wide recall on romaine lettuce, the fires in California and the recent earthquake in Alaska. Also, given the company’s recent sale and leaseback of five distribution centers, and two earlier this year, fiscal 2018 results are now expected to be affected by about $17 million in incremental rent expense. Albertsons said it believes these items will hurt its fiscal 2018 adjusted earnings before interest, tax, depreciation and amortization margin by about 10 basis points. The company updated its full fiscal 2018 identical sales growth guidance to 0.8% to 1.0% and its adjusted Ebitda guidance to $2.65 billion to $2.7 billion. In October, the company guided for 2018 identical sales growth of 1% to 1.3%.
In August, Albertsons’ bid to merge with Rite Aid Corp. (RAD) was called off after Rite Aid’s biggest shareholders planned to vote against the deal.
Write to Michael Dabaie at [email protected]
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