Albertsons Companies Inc ACI reported third-quarter FY23 sales growth of 2.2% year-on-year to $18.56 billion, beating the analyst consensus estimate of $18.37 billion.
The increase was driven by the company's 2.9% increase in identical sales, with strong growth in pharmacy sales driving the identical sales increase. The company recorded a 21% increase in digital sales.
Gross margin rate contracted 20 basis points to 28%. The company noted that the strong growth in pharmacy operations, which carries an overall lower gross margin rate, and increases in shrink were the primary drivers of the reduction.
The operating margin was 3.1% and operating income for the quarter fell 2.8% to $566.1 million.
Adjusted EBITDA of $1.1 billion decreased 4.4% Y/Y. Adjusted EPS of $0.79 beat the consensus estimate of $0.65.
The company held $222.7 million in cash and equivalents as of December 2, 2023. Operating cash flow for 40 weeks ended December 2, 2023, totaled $1.73 billion.
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"We delivered another solid quarter amidst a challenging economic backdrop," said CEO Vivek Sankaran.
The company's Board has declared a cash dividend for the fourth quarter of fiscal 2023 of $0.12 per share of common stock, payable on February 9, 2024, to stockholders of record as of the close of business on January 26, 2024.
Price Action: ACI shares are trading lower by 0.52% at $22.87 on the last check Tuesday.
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