Boise-based grocery giant Albertsons reported a strong earnings story Tuesday for its latest corner – causing the company’s stock to pop on the news.
The company, which operates stores around the country under names like Safeway, Carrs, Vons and of course Albertsons, said it made $284.5 in net income for the second quarter. That’s a growth rate of 11.2 percent in the quarter – ahead of largest competitor Kroger, which only grew 8.2%.
Albertsons said its revenue from digital initiatives grew 243% from the prior year. It said sales from stores that were open both last year and this year (“identical sales”) grew 13.8%.
It also said it saw its profit margin increase to 29%, up from 27.8% in the same period a year ago.
“We continue to successfully execute against our strategic priorities, which translated into outstanding second-quarter results. We have a value proposition that is resonating with customers and driving market share gains across all of our markets,” Albertsons CEO Vivek Sankaran wrote in a statement. “We are in the early stages of a transformation to become a modern, growing food retailer providing a wide assortment of high quality fresh and essential goods to customers, and we remain well-positioned to generate differentiated performance and deliver an excellent shopping experience.”
Wall Street reacted positively to the news, driving up the stock more than 5.5% in trading Tuesday to $15.22. While that’s still below the $16 the stock debuted at on the market in June, it’s well of the low of $13.06 just over a month ago.
Albertsons also said its forecast for the full fiscal year of 2020, which runs through early next calendar year, improved. It expects to see at least a 15.5% increase in those identical sales. Albertsons says it will spend $1.9 billion in capital for the full year. So far its remodeled 132 stores and amped up spending on ecommerce.
Separately, Albertsons announced the launch of “Albertsons Pay,” which allows customers to make purchases using their smartphone without any contact. Similar to the Starbucks app or other similar payment programs, customers can either link their Albertsons “Just for U” app with their bank account or despot funds – then show a QR code to be scanned remotely at checkout.
The product will roll in payment with its loyalty rewards program – meaning a customer using the service would not have to touch the PIN pad to pay by credit card or enter a phone number for rewards. The program works alongside NFC payment options like Apple Pay or Google Pay.
Albertsons operates more than 2,200 stores around the country, and is the nation’s second-largest pureplay grocer, behind Kroger which owns Fred Meyer.