ACI Financial Analysis

Analysis Date: 1/27/2025

Business Model

Albertsons generates revenue primarily through retail food and drug store operations across multiple banners in the United States

Revenue Sources

• Retail food and drug stores (2,273 locations)
• Pharmacy operations (1,732 pharmacies)
• Fuel centers (405 locations)

Revenue Distribution by Channel

• Digital sales increased 23% YoY

Income Statement Analysis

• Identical sales increased 2.0% YoY
• Gross margin rate decreased to 27.9% from 28.0% YoY
• Operating income decreased 8.4% YoY

Balance Sheet Analysis

• Strong balance sheet with stockholders' equity up 22.5%
• Total liabilities decreased slightly by 0.7%

Cash Flow Analysis

• Strong operating cash flow growth of 11.1% YoY
• Capital expenditures of $1.45B focused on store remodels and digital investments

Capital Allocation

Company increased quarterly dividend by 25% to $0.15 per share and announced new $2.0B share repurchase program. Capital expenditures focused on store remodels, new store openings, and digital/technology platform investments.

Management Commentary

Delivered solid operating and financial performance in Q3

Strong growth in digital sales and pharmacy operations

Consumer remains cautious in current environment

Overall Sentiment: Cautiously optimistic with focus on digital growth and productivity initiatives

Recommendation

Rating: Hold

Reason for Rating: Balance of strong execution against challenging consumer environment and merger termination uncertainty

Disclaimer: This analysis is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Past performance does not guarantee future results.

Generated on: 1/27/2025, 2:17:58 PM