Boise-based grocery giant Albertsons Companies saw its earnings grow faster than Wall Street expected – which led the stock to rally Monday.
The company saw sales rise 1.5% in the quarter which ended September 11th compared to the same time a year ago. That’s a swing from the previous quarter when sales actually declined from the prior year.
Albertsons is steering through complicated comparisons to 2020 when sales zoomed in the aftermath of the onset of the COVID-19 pandemic. The company trotted out a unique “two-year stack” metric that looks at 2020 and 2021 together to compare against 2019. That metric saw sales growth of 15.3%.
Company CEO Vivek Sankaran said the company’s strategy is paying off.
“We are pleased with our second-quarter results as we continue to execute our transformation strategy. The favorable consumer backdrop together with our focus on in-store excellence, accelerating our digital and omnichannel capabilities, increasing productivity, and strengthening our talent and culture, are driving increased identical sales and improved performance,” Sankaran said.
Dividend to increase
The company said it would increase its dividend to shareholders by 20% – and said they will bump up the outlook for the full 2021 fiscal year.
Albertsons sold $16.5 billion worth of groceries, fuel, and other products in the quarter, up from $15.8 billion in the same period last year. Digital sales grew 5% in the quarter, though Albertsons does not break out how much it makes on digital offerings.
But Albertsons said it gross profit margin dipped to 28.6% from 29% last year. The company said higher product, supply chain and advertising costs dented margin – along with fuel, but that productivity, “favorable product mix” and pharmacy margins related to COVID-19 vaccines helped offset some of the margin dip.
In total, Albertsons said it booked $471.7 million in profit, up from $457.5 million last year.
So far this fiscal year, Albertsons has opened six new stores and remodeled 76 locations. It is at work on two new stores in the Boise metro – with locations in Star and S. Meridian.