ACI - Earnings call transcript Q2 2021 | Albertsons Companies, Inc.

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Operator

00:02 Welcome to the Albertsons Companies' Second Quarter twenty twenty one Earnings Conference Call and thank you for standing by. All participants will be in listen-only mode until the Q&A session. This call is being recorded. 00:14 I would like to hand the call over to Melissa Plaisance, GVP Treasury and Investor Relations. Please go ahead.

Melissa Plaisance

thank quarter joining XXXX and Albertsons for morning second Companies' earnings Good you us for the XX:XX conference call. from McCollam, and today CEO; me the Vivek are With Sankaran, and Sharon our CFO. President new company our Today, as progress as results, second well share Vivek strategic review priorities. insights will our our quarter into against our Vivek as remarks. handing into twenty twenty full-year go then of it will updated over financial details closing our outlook our before for second Sharon the quarter back to as some well one XX:XX remarks, Q&A prepared After session. a the conduct will we would that I are management make statements the statements like include within of could laws. that call may federal to remind securities meaning the you during or forward-looking this

historical but limited statements about not Forward-looking performance. contain facts, are future to information financial operating or

that, the financial over includes income adjusted adjusted to results contained management's And EBITDA. the otherwise. and forward-looking prepared current could non-GAAP uncertainties net we Please expectations I’ll to filings, Forms factors differ or no materially information X-K. and XX-Q, as different or of risks only our that update call we and information, that keep actual as remarks cause our a net from today statements XX-K, reconciliation of time today's Additional in Any cause date, the including and are and time to hand statements from on involve those will SEC on any make actual XX:XX assumptions in based certain be revise Vivek. that and And new our included and events, concerning undertake in financial could future with information or are such are to statements are results statements events measures. obligation materially income to historical forward-looking to a of from XX:XX statements those anticipated. mind and result Forward-looking XX:XX in be

Vivek Sankaran

us for Melissa. everyone today. and Good morning thanks Thanks, joining XX:XX

just President introduce six excited of to journey joined estate, She of lead came officially development us her her transformation I us not as and Albertsons our corporate to many would look chain. As in that on XX:XX and our at get has Williams-Sonoma, under team do us her help we and our know, Sharon CFO now over real like know working forward. all her Finance, you as Best has of experience Sharon that any you prior Companies. McCollam weeks with accelerate Before of she joined belt. to and to XX:XX IT, out transformation. She we on strategy, Buy digital move very and are started, and role at to retirement I September of transformation new X areas will supply We with the join will forward her

business our two in and QX percent XX:XX exceeded key point across quarter internal confidence our metrics, percent fifteen the that report want to last second Diamond turn with We for his years congratulate especially IPO seven XX:XX now also retirement successful pleased thank plans on three increasing five stack in his quarter going of sales for ID service our to to on the Albertsons. I'm to our and Bob point contributions me one results. results his our a basis. him all Let increased Our forward. year. for And year

on year a one food two MULO, and one We in basis to only two slightly and year gain and on are up market on share basis. basis down a year continue in we a

improve XX:XX benefits by every times percent been and data initiative analytics continue drive Again, customers spend to against continue over and of our sales spend. quarter with We increased household per investments growth expectations. incremental of hundred retention of percent exceeding year & over more twenty the five only a increased achieved six our growth continue two-year we basis. adjusted of year addition, nineteen to year over just has point enhancements program, In the than customers resonate to forty is in XX:XX increased benefit point our, capabilities quarter, reaching Omni-channel over to this two accelerate seventeen is year ongoing sixty digital twenty five of In million omni-channel identified eight sales quarter, dollars key to members. our share better dollars million foundational to Home drive households which growth, nine and four and us any loyalty offerings year and in EBITDA for zero percent a year allowing times EPS three adjusted Delivery through that initiative ahead our increased customers another of these and versus of membership four twenty five QX ninety as strong. understanding two percent in-store Up growth shopper. households, five percent Our seven our twenty key omni-channel customers. digital Go Drive XX:XX the In on our rec digital to stack and U also XX:XX backdrop

engaged In rewards of the are XX:XX redeeming four a current ninety fuel Within times QX. as had in such members three we Remember percent us. with in the more rate spend members engaged increased addition, grocery by the members quarter. or actively engaged approximately almost are program, with engaged those actively number that nine members retention rewards Actively actively percent. that

two walk introduction saw continued helping versus fifty points digital being checkout, These In culture. to progress is elevated outpacing and of contactless providing and the twenty. also demand in service believe Sales friendly as to employees, we year our traffic conditions, and become have higher to store effectiveness divisions excellence our expected Own. to assortment We transformation Brands, our efforts strong each by capabilities, stock rates omni-channel continue elements Own and new has differentiate health the well the than strategy recent are by local center growth. We throughout consumer our the of XX:XX safety of pillars and increased replenishment been the quarter. and the stores. XX:XX customer enhancing that I our generated fresh in-store in levels at few market, in take year. increasing remains drive in that strengthening customers these through of helped briefly on will two all productivity, touch backdrop by These strong ongoing results as speed In-store minutes with in-store meals are increase the categories communities our and channels. execution offerings vaccination seeing efforts comfortable returning of elevated transformation right encouraging In with and twenty our remain of has tools fresh on now as the ease results the to driven fresh across Own consume momentum more and Albertsons’ progress. in results traffic pre-pandemic enhance excellence, of as basis include strategy assortment of the XX:XX more an our each and better digital our stores customers our provide I XX:XX QX pillars our through to payments. customers, update generated protect rollout talent The you approximately Brands. products, over reflect into our ahead XX:XX growth XX:XX of legacy fresh, will on Own Brands to using accelerating a

Through on the to launching items the opened to twenty. four from five up QX new we over five several and are new Organics QX approximately our hundred Our and track over Brands and XX:XX During meals, eat remodel upgrade basis we Reserve eight seventy sixty two this of in Finally, O sales point including reach fiscal first invest have points Year half Signature of completed seven penetration six to Own we ready launched continue projects. pastas eighty coffee products, year. we to year, items. stores refrigerated was hundred percent date, the items XX:XX quarter, goal twenty launched and new stores.

of digital is and capabilities. in Our is the acceleration an transformation priority next omniXchannel imperative our our strategy. growth Digital

customers. time an omni-channel delivering Drive have convenient nineteen is we to focus capabilities a In rollout profitability well for example, over is locations reach and Go, Up of we and two the thousand three Go average trip. minutes. MFC’s MFC’s divisions delivery we have announced delivery, down our pickup & For improving the to our grocery thousand four expanding area digital end. as by aim delivery previously our DoorDash is order of to meal reducing continued now for of with existing delivery and and our for our a times end, an our superior bringing hundred this network. before our cost forty catalog to XX:XX combine To for XX:XX we also expect total up we we Drive estimated. experience hour we dash, speed over to wait provide delivery Up while our & This to approximately all As one added are as of less customer Underlying two locations to in year XX:XX end expanded experience seven. shopping And one by productivity products. In And fulfillment restaurant a per in delivery delivery customers of three third-party than improving allowing micro our store to in fiscal additional centers, plans double the plus year, time.

primarily locations the other new to year improve priority customer of out ways As a productivity. and into is efficiencies, shrink. cost to re-designed fiscal and and Reductions efforts third loyalty features. construction. has ongoing of investments in enhance spend, app quarter, fully efficiencies these two, rewards of promotional result integrated eliminate now driving loyalty, our With we all and effectiveness. as rolled inflation, continue our the is in twenty delays XX:XX e-commerce launch moved experience offset XX:XX with in and indirect two During labor In a partially offers reduce connected to

five targeted continue is achieve fourth billion and savings XX:XX We point our the in serve. talent we supporting the gross communities strengthening end twenty culture expect the priority by dollars of twenty year two. annual to to Our one fiscal

to and add COVID pharmacy the to of assist job company we retention. enhanced to five put administered success serve, XX:XX hundred the our California Ida retail in million fares training the vaccine XX:XX the the pharmacy were our thousand at through recent that an we've and five Sharon, outreach throughout continues doses. area of division corporate with serve place of talent impacted level, our in for To communities communities Our distribution by In impacted and continue those associates new and the employees including the appointment in the the to and point the team We both dollars. including date, our donated provided employees, food wildfires. over flu They Companies support of seven COVID services vaccines. Albertsons team has have Hurricane and

related climate I our refreshed to materiality will we turn comprehensive and reduction in also areas outlook. ESG quarter our step a We set cover We and to of sustainability. our circularity, recently of inclusion, and company XX:XX soon results diversity including community to twenty from twenty actions financial the on and fiscal Sharon waste remarks ESG is and and now, action recently stewardship. As provide the take goals details our available second published report, continue equity And XX:XX release which next website. assessment, will to

Sharon McCollam

joined stack twenty point and foundational are QX discussing twenty currently rationalize details since same of today, dollars be point our today and favorable our more What I'm found fourteen our billion of leveraging XX:XX compared seeing further strengthening further, the with forward the couldn't turn As all you, fiscal transformation XX:XX to to to second But priorities, now, a initiatives, priorities year we'll point that sixteen including trends transformative my last the twenty today Gross year term. of both while and where on profit taking percent. percent the to longer twenty three update I dollars meetings capabilities in topics team impressive for fifteen productivity of percent five excited on sales outlook. one fifteen point one and come. of is the our of in twenty sales to be digital to chain agenda, QX twenty top hello, at provide the these the an QX that stores. backdrop in two with in have is advancement one twenty growth this in the and and and is the to compared eight percent point margin and quarter particularly thrilled the our these the covered point billion the twenty spending in in of such am pleased time extremely identifying time in I company's five in Total the eight nineteen. advancing were company I percent our just everyone. twenty Thank history. twenty twenty that Vivek approach one omni-channel we were and be in percent as on eight twenty most joining remaining we delivered focused earlier, nineteen. technology deeply said Vivek cost majority billion of two as XX:XX twenty have QX sales a acceleration to opportunities and point growth Vivek to to QX XX:XX supply thirteen one Consistent twenty twenty identical at the structure, was of disciplined of seven time twenty technological enablement industry strategic our XX:XX to nine our here our our QX QX look eight is point six results

higher sales to eighty COVID-nineteen our impact margin costs favorable XX:XX five profit shrink twenty advertising margin QX offset by QX in related margins twenty driven however, improvements product flat points, increased initiatives, primarily as pharmacy was nineteen, productivity, and Compared basis mix, to vaccines. to gross productivity and leverage, expense, by compared gross of our supply the Excluding were chain twenty fuel, products, twenty digital of point as to twenty pharmacy six related compared twenty twenty percent margins expenses vaccines, related six eight point twenty to XX:XX point growth QX improved QX and partially by administrative in percent were twenty of in investments to fiscal offset COVID-nineteen five nineteen. in second quarter percent sales. the percentage and our Selling and a during one, sales five twenty six

and basis to over driven the related fuel, partially the strategic other primarily selling and administrative of expenses were increase five increases XX:XX year. Excluding increased lower depreciation costs, fifty channel and was COVID-nineteen offset employee expenses higher of impact This priorities. points acceleration omni-channel year related by by These digital our capabilities and expenses.

decrease decreased QX leverage, basis dollars and wage compensation digital was based the to hundred continued to two in omni-channel higher to costs, employee foods, prepared fresh reduction, year investments deli, opportunistic one XX:XX As increases increase This points market as twenty million capabilities year year selling of by point and zero and per and basis, six related six six expenses fifty offset diluted priorities. transactions QX twenty. sales and of QX versus related other twenty our quarter as quarter twenty. point I million free result twenty and strategic cash driven nine debt were twenty QX interest one or by nine was partially As now nineteen. in it increase. fully relates QX over our by departments million in XX:XX to increased a the twenty share Adjusted capital a well higher twenty dollars certain compared five and strong expense reopening refinancing to administrative and dollars XX:XX the per costs driven by employee EBITDA of labor fully this rate partially such and contributed Adjusted allocation. to administrative twenty. as second the twenty one to selling share equity of costs. primarily On expenses bakery three zero dollars in offset sales in would one expense to higher four twenty in flow three dollars million sixty XX:XX eight million to versus fiscal twenty due net adjusted increase twenty was compared dollars diluted or one was discuss This zero hundred dollars seventy in twenty and income EBITDA nine down dollars forty like second million

capital During were as From date, operating generated results capital. date the driven cash flow digital twenty better by dollars lower six seventy well free year investment year than we second point perspective, to three of and to expenditures in spending have range to working an eight to expected approximately significant as XX:XX we nine our For continue million stores. platform, opened to in two expect capital billion. approximately technology seven continue and as invest and the year, completed remodels the one quarter we

annum a in of to five zero generation our five, million returning debt seven outlook expense finally, zero And hundred to per subsequent of turn the on XX:XX of will twenty five of the confidence notice fiscal of shareholders, flow in cash twenty remaining year in redemption based due XX:XX forward. one reduction, operating I our regard percent provided share save point going million we quarterly in cash we twenty Regarding to to twenty Albertsons us announced for per dollars the percent point to our five unsecured which point in today eleven notes will twenty two point end updated and interest now performance. one. zero dollars two one dollars strong increase dividend our future quarter,

point point guidance in the year five range have up our QX, in two our point zero raised fiscal to we sales of percent. and to guidance representing range thirteen expect point nine two four recent dollars three nine percent in to fiscal and adjusted previous We the point four prior range. five fourteen twenty from two to point the updated percent dollars EPS We guidance point to expect ten of compared negative per prior twenty twenty six point one guidance five in share, twenty percent zero percent three five now for of range zero XX:XX identical point to percent an ID outperformance dollars eleven of percent of trends, stacked updated negative six one. year to two Given percent compared

of point five adjusted range million point nine billion, dollars EBITDA from the four five We three our in range. expect zero guidance previous up two billion to fifty

our We tax will over range call XX:XX also some four previously. twenty three expect closing for back five twenty percent of turn the Vivek the now to remarks. to to in I be rate percent to compared twenty percent

Vivek Sankaran

In Thank few summary, reinforce would Sharon. messages. you, like a XX:XX to I

engaging more omni-channel Our our adding working strategy us. they're customers spending franchise, with and customers. to is with more We're us, ways with our in

gain with each and and around continue in service period especially share improved engagement successive units quarter Our quality speed. We our and We XX:XX market to in initiatives growth. trends holidays. drive on dollars and elevating to remain focused the and continue digital

delivering, product are full and of creativity. for challenges with agility supply, and few the year performance Our continuing raise to name inflation, adjusted L. of strengthening the XX:XX to initiatives twenty P the the productive year Our ID our a give times to and EPS. EBITDA also one navigating twenty middle strong us We're trends uncertainties sales, our and date positive confidence outlook the label

who remind more are the of significantly success. progress, and efforts our ongoing and eighty of ourselves take innings thousand to serve contributions communities our to five we to potential and in day-in thank our I transformation every one each them we be customers with celebrate hundred day-out. of two our possible Finally, we the want we While for without their early and still associates our this none care of the that capture. XX:XX would of

questions. your take now will We

Operator

you. [Operator Instructions] you. Thank Thank XX:XX

question your proceed the Morgan line Our with Stanley. is coming of Simeon Gutman first from questions. with Please

Simeon Gutman

XX:XX everyone. Good morning. Hi

Sharon McCollam

XX:XX Simeon. Good morning,

Simeon Gutman

on first doing? How Vivek. are just housekeeping. I Sharon. you is straight Hi My XX:XX inflation. question guess Hi,

cost customer? the retail about have it talk during the the what and and to out it trying could been inflation inflation figure is Where you is to trending benefit quarter? sequentially can or So, product how price

Sharon McCollam

Thank you, to I'm Vivek. over that turn XX:XX to Simeon. going

Vivek Sankaran

around XX:XX in was Yes, the Simeon, so the two quarter. CPI inflation percent

be you're the be to which was I about inflation percent we the Ours as through to expect we three quarter. okay, five go year, expect percent quarter we good said on So, what as still higher to three percent customer. manageable it feel manage extremely for we range, a through costs, our just in – and but we earlier, the come XX:XX have the And customer it we least can the opinion to is able delivered. in that seeing both is we strong that in through at the

to have that with So, in we going and in productivity we that L. our manage and backdrop what able P productive, are

Simeon Gutman

it. Got XX:XX

helpful. I phrase question, ask the That's to want Okay. about next table My stakes. Sharon

a was I the think related Sharon in you past, large making a at and as pricing with the where be? yet but Best it do Albertsons customer and parity to curious against about your Buy. to should view were we've make competitors. pricing curious you lot remember where And other it know this sense it playing think you I'm industry I mentioned like competitors? what talked you or operate? prices Albertsons level sense sure was so I think make it should own far, of I'm wouldn't the Where if where would perception a have field to

Sharon McCollam

Simeon Yes, for that. you thank XX:XX

we let comparison have it follow-up in with about first where will to I as that think Vivek with view I’ll my to. pricing Albertsons then and you I been spoke relates talk

take you first Vivek why So, take I'll the second? part, don't the

Vivek Sankaran

XX:XX to Simeon, approach reinforced sure I just be pricing, to that right. I want our

our market value in branch the and us me because indication mix we to across we units own share our the we is have, our portfolio portfolio portfolio we are customer and gaining in resonates. the that at branded thing fresh gives the gaining of units first providing dollars are a look The good share market portfolio,

approach on XX:XX want so principle surgical first we thing. incredibly an I it. is And take to the that again reinforce pricing, to that's The second

price] [buy growth outcome and every the gains markets. So, area are about, units. quarter, share with and you know And we pricing market dollars we investment again, is that we single and should specific care [ph] in and in investing in that which

to philosophy that keep want please Sharon, then might So, to that. you and add

Sharon McCollam

XX:XX Yeah.

say I are pricing. great has very overall, approach a previous were So, Simeon, is And surgical similarities I there to And enough, not actually my would to that would the we interestingly new. life. doing that in say company what

this have customers last capabilities are consistently materially extent I something in area XX:XX capabilities grocery building definitely [ph] might call that, when their are area. in And this in different I would But [lightning say the that products, rod] months. space. at moved in twelve We they look over we the to because there are is we mentally in course, And good our we every that what category. benchmarking. that the that that, is going are products it offer XX:XX is different reacting see our that be store of for in we customer. So, to

We that more in ways of say expansive have And continue to do I will much us a see number you where makes products that into we time would it. surgical over offer. to it invest sense pricing

Simeon Gutman

XX:XX quarter care. Okay, Take Thanks. great. Nice everyone.

Vivek Sankaran

Simeon. you, Thank XX:XX

Operator

next coming question. your Our line with Edward Wells the XX:XX is Fargo. Please Kelly with of question from proceed

Vivek Sankaran

Ed. XX:XX Hello

Edward Kelly

that to and morning, you on three business. margin of competitors sort being the wanted in Hi, percent I of the number good are PPI about should back front, everyone. said you doing? sort of the I three how I'm much bigger quarter it you start question, than is the five, terms taking a strategically, Today And gross be of year with kind manage higher to for this of how sort like mean, against Can last in just a of a then that. I CPI thinking you're about is you curious mentioned bit provide percent backdrop. what just picture a kind of good you follow-up half the four to back. how color to XX:XX more your the had know sort of on thinking a just we closer step but high-end, just inflation percent running

Sharon McCollam

that. take Vivek let I'll And XX:XX

Vivek Sankaran

XX:XX Yes.

margin question tailwinds. gross So, it trying a tailwinds with benefits. we those smarter more better right? have are shrink sure going that last And start I’ve benefits margin the to topline And doing fact and because cost top, healthy now three half that want you gross management, of about make to been gross benefits, in see we me mix and our the the maintained what let management, more and notion as of chain a come for company, manage earlier, promotions margin. we back comes from the two with better the to from that you the always this ultimately goods programs So, said that been year. supply of and margin we about XX:XX are the have we've at first towards that's we talked gross while want growth

So, from the management in and certainly while L, can do prepared gross predict of inflation, the are P can’t with and are margin we we with going our happen, we what the what's to what's the control.

it So, think up, mean, think of point three Now, the five to me came CPI the five, I to year. three up that they’ve to way. XX:XX secondly my with for projections gone I full

The this part year what the realm So, it's the rest very opinion my to of year, the manageable first I of for doesn't and still cyclical. much expected. more with of I we're it over we're expect the leave in maybe big especially be the backdrop bit seeing And is that company it the XX:XX consumer. ours, you'll that will part with proteins. – continue balance inflation to little to in increase protein with is, you last but consumer, like thing the seeing a next I'll inflation see a tends with a

will different protein. that So, suspect parts some come of [indiscernible] I back. Protein inflation of that

we manageable very inflation. how the business, choices of a our butchers for store especially give manage consumers. it's in we That's protein and part have the manage who different can and So, when

meet that always pick they can budget. to have up So, consumers something their

Edward Kelly

helpful. XX:XX investments. to And wanted then Great. of category just follow-up That's I related to broader the

spend, that What digital I'm the the joining? or and kind at urgency that, or in stores think you of how business is that ramping I Sharon all with in like is about Sharon the this areas transformation. curious, technology either impact you're how and company's So, the of is could investment position in mean curious or going size CapEx of you chain the supply know, forward. changing by like

may that of CapEx sort companies, seen have here? I'm how kind ramp so to apply into We transformation, curious of as

Sharon McCollam

of very on of starts systems around now extent To these and XX:XX XX:XX from have returns a Ed, stages accelerate drink viewing. they that platforms Where they gradual investments putting are actually much foundations. and company we to capital investments kinds quickly, most those vote fill is having perspective, very build to in of strategy transformations I is think create are had my currently that disciplined old these right. we that would, in incremental and on that can And and they getting could out early time. the the with that the the investments, states, enough the over

this so, And large hear legacy a that from have story systems. you every who retailer is

very its So, they company. eighteen is projects rolling many on the the needs Vivek and direction analytics we XX:XX is months going last happen, behind which since pace and been investments working the goal to – to now out. our well four be the execution rest determine in way are have process, are that to on it's their these this that that work We these the twenty assured at the the of months for to on in joined accelerate

about still the we is into you in excellent. has had discipline the a on cloud. the get the key do XX:XX was, question ways it around progress space, it? of is the making significant discipline as And and was strategic very that company feel We feel your know move thus making we being I been but to in good I ourselves to future. undertaking much and great that. things to that do One around So, to go, able progress it how are faster have the

budgets, times two And some remarks the get of of and but as call you two it. go opportunity very XX:XX accelerate, have picture a we we that technology mentioned private has the as I side received I’ve I twenty many the my both will this supply clear because we forward spending, guidance of in get been that them and into you chain the the twenty think is I'm to in meetings as numerous today. prepared on capital always additional taken in and twenty look interested twenty for which on color something providing two, before twenty they doing know I up. is our twenty be we into our there from question expectations when And side

they've very we feel against initiatives that the that originally will out. I So, able execute be confident laid to

Edward Kelly

Great. Thank you. XX:XX

Operator

you. XX:XX Thank

question line is the Guggenheim. proceed next John Heinbockel questions. Please with of with your Our from

John Heinbockel

Hey start with XX:XX guys, omni-channel I wanted to right. households,

So, up what of years, drives And here? Obviously still that again think next households just think you your number maybe percent know than the Xx. households. of more, Xx, marketing double that time period that but from right total the your that? capabilities over fair? growth from wise, that organically you And two do you can when about it I Is would imagine that some drives having you that, of omni-channel then five outreach to really less is

Sharon McCollam

XX:XX I'm going that. Vivek to let take

Vivek Sankaran

XX:XX Hey, John. good morning, John,

growth We're entire things. People two-hour even markets, to is grow the we are our open in love of an growth, mix speed I’ll rate, and When We couple the it and a speed we've see are sixty below think So, And there's the increase also incremental our omni-channel and grow competitors in we’re our same but the in we excited of the quality the your John. we continue continue overall and that not that. and of to the just it, we continue up about we our say pace market. XX:XX terms delivery coverage providing covering right. market more I sure that. is right. at business. the we're at to percent we're don't going example, if close excited to give in more, the said which before making may can question, you about One to

we here Drive glitch more keep in to and those open them philosophy they XX:XX see on more continues to the see delivery. & a number to start customers engaging on giving it. and They we To just we big or our customers stores we lot the haven't anything, of your at availability coming because is make pull the to in delivery We out three lot. we want convert minutes our point. of increase give fundamentals, speed think when customers So, a that choices Up point, sure it choices parking and omni-channel and we up, to as get. Go, you marketing more I in and you service turned

Sharon McCollam

business that would online incremental. e-commerce to and working be that been the has in it were add we're Again, XX:XX capabilities buying at past the have John, we with I over all gradual this that time customers year, adding are materially. side the on And upgraded been these of of initiatives

members. we've making number soft use see to implement prepared of We're greatly majority to redeeming are. as a that then them, We they we progress it Vivek’s the comments are much they efficient enhance customers also benefits experience them, our more about fact the more. also loyalty customer better the talked that the loyalty efficiency And and area. how in They this. the So, XX:XX loyalty learn in really the advancing enhance in has You launched these. use have the they and of experience be we similar will helpful etcetera increasing and

John Heinbockel

XX:XX a And then right. as maybe follow-up

So, in if if know be but double-in I exponentially. demand certainly to we're going don't is customers, the right, a to omni-channel increase there'll going –

you by, more? So, thirty cost pick. the but the even know I Can is cost bringing it's know down maybe percent to MFC don't a opposed down and guess, much this, to as an Thanks. to this, piece, twenty into entire to to can five looked order, bring pick broader I but right? the than bring or percent down and cost how I that cost if to pick you possibly pick guys you at tied talk

Sharon McCollam

Vivek? XX:XX

Vivek Sankaran

the we store? items cost and steps. then in there's what call of moving become the can our in to created Yes. is, we've efficient through more And two your be down One even very that's [indiscernible] a pick how faster in stores, XX:XX more that space. technology. small And John, some so you it fastest

physical going the you're limits. to but So, reach

of picked. will to And takes to that point. of locations, have certain store. right, big in. When kind same we that take The indifferent. we so, the XX:XX pick where On picking cost becoming up at the this were about order is thing What done, converges, you XX:XX environment. see have the to comes the little we this, MFC for Because you you in where said, tell can I is they And MFC longer, everything the the ambition. we little long-term whether more from be our not strategy do that, John whether a takes – little that's That’s but the in becomes a a we a shopped to the start because an as MFC? about going the couple getting MFC’s point opens some indifferent so to because where cost you a are getting somebody was labor the us of Whether [indiscernible]. store the point, know, bit today's longer MFC’s or get that way construction to a store right? it are delays shopped permitting of through a as in couldn't order We're

John Heinbockel

XX:XX Thank you.

Operator

your Barclays. Short line the with Karen Please Our question of from questions. with XX:XX proceed comes next

Karen Short

XX:XX Hi. Thanks very much.

So, question regarding just a guidance.

guide less the improved, we line they're with dollars, or comp obviously second kind when more half of in EBITDA has So, your consensus. at look but

obviously throughout implies you color but one And EBITDA that, say the ID. the wondering did quarter, and a of if line, didn't a tying So, give sales full-year then really two-year but you the ID half there, meaning, you the you’ve could kind dollars? guide top second into in raised deceleration little change accelerated

picture then some bigger I and So, that color had a question. on

Sharon McCollam

the Karen, I'll Vivek that of for and half, the the the view question. of side detailed on let more take then XX:XX back I’ll bigger take financial

Vivek Sankaran

as, about we additional fifteen six five five percent point we've or the billion is at an flow growth, That's way about think through million additional two productivity. of that's right? say remember got ID Karen, to one let's it say and fifty would XX:XX point think of so, going two back points about how a lot the more the that we're of lot depend half right? the it our a So, of getting more, year, for is I let's year

how the that's least we at how trained the about full-year. model had think we for So,

Karen Short

Okay. XX:XX

Sharon McCollam

half then the back you half, Karen, in back the you the look it of flat. And you're when in around do XX:XX – at basically, math, at the midpoint if somewhere

as be have through the the stimulus back which written, us, say some are thoughtful in described. would we it result many upon happened. very of of you flow will you, I to half all about as read report half have will I that whatever that Vivek will we just like as relates that already obviously, back dynamics every like that the look So, at And this, changes

the are out XX:XX on the first from – SNAP the point seeing it, it’s and necessity. industry going some throughout the new went paying will part I are a we they year and However, a there's ones. credits been basis grocery lot that we day as of childcare We and out the now monthly looks understand increases every of into like into

balanced will on like look push a but and I comp we back seen view we’ve we’ve could the continue [indiscernible], as thoughtful and played side. in business, to the right half very So, are think we of now, what the

Karen Short

– one some and Sharon Albertsons us moved think forward? great in approach were said, your you twelve update to just XX:XX a your you in But then comments, at you on comment on you're And taking, obviously you're of pricing, front. there was very at similarities former made that helpful. and significantly expected experiences. Okay, where of that's to to last had you I that the it in is of surgical be months what that Can going kind terms

Sharon McCollam

we resources of investments been added company priorities. to about Considerable it one As team, very to continue to comments strong pricing the those pricing, my building have on the talk This strategic that is that. XX:XX relates our on is

has care is is it hate for of of So, I incremental. to XX:XX about every So, all and just again, about think true that is what are been that about but you gradual Albertsons the pricing, think its benefits known for the one underlying and have. this that, deals. saying time, I as priorities data the as always about strategic the we said projects keep the company and again,

special getting we they would getting are pricing deals. pricing deals us you data are that loyalty, price see, our and tell through the come through that have special to customers you While people actually, for that

is keep go to you we interesting I are here think what well it see keep others there's do to Now, have industry. the further. with company doesn't is that think and that the managing So, point. safe, do one in to XX:XX need this how pace at I that and no doing

just and at we So, them be we we gap always looking will is Best that, see important as will earlier, we said that Simeon have I we our pricing like with think I been at be I but create customers, and adjusting is Buy. and this lot continue looking that benefit a where to it feel the will think like stickiness more in pricing, don't believe it like will

you I think a to the Buy, I pricing the feel pricing that very further we match confident did we conversation as it some is match much in that. benefit many see are company from capability isn't that building have And this So, over and Best that we in were but can't about but time, stronger we will products at happy arena. and always price, there case. the XX:XX talk

Vivek Sankaran

we drive – promotions. is also I add while are are we're to talked to of about if now our lot etcetera. some that we’re traffic, is a which national. going lot that that our we a do that, ago we through with We margins, a ones ones promotion launching, smarter All that know drive there's – to to to a then a are time And Karen, doing promotions tool can XX:XX tool. also digital. less doing promotions, do And which lot going

tools adjust do very down. – that every are go in have couple different we're a capability says everyday price, that's combination talk surgical, principal to of where these – to have getting would and it on from franchise, it and at we doing to technology play going in when our prices, ago because The and we other we the where when Sharon data do being the ahead we some do and we're some adjusting we And So, parts is basis. a That's that very, to pricing, markets continue we it’s that we everyday from it. There's – thing the standpoint, we better quarter. the it. better data XX:XX of far so we're promotion an continue our also years and

Karen Short

was you That helpful. much. very XX:XX Great. Thank very

Operator

XX:XX Our coming Goldman Please Morgan. next question J.P. with the from of your Ken is proceed with question. line

Ken Goldman

now XX:XX decline overall on of margins priorities for Hi, good morning. Thanks. working Sharon, you sector, your productivity decades the grocery is agenda. now. one the right mentioned that We've seen for

forever think you the how the productivity, headwinds potentially time out being think decline that? over tools about aren't or very margins overall because a how So, sense this reverse to or offset just thinking long need you term sure over see belief that the could continue just idea curious in when not and partially get little you more a you and course better? I'm bit the view is this, will really industry are a there's to margins trying you I'm about start effect better that net I to so I’m that just rise just there

Sharon McCollam

I'll and has then give comments first, call, this Vivek I'll Vivek XX:XX some my Since view. made let in last you the take this about conference

Vivek Sankaran

have We room is hey, The Ken. Yes, of XX:XX approach here Ken, want payments good to don't expanding and for business margins. reinvestment always we want morning we to gross we grow but this that simply sure by growth. margins, make want gross for

speak because L by went It's So we Albertsons. how yet scale you we and productivity. benefits. number you the know about us to XX:XX of get driving that I learned got are, want lot more that we that leveraging improving the Why two, drive guess integration room are initiatives in with could of to fully we haven't the scale to P is speak middle We've industry, but operate of Ken? to And more one. benefits. initiatives better driven a cost in past, because about the and that's the plenty the but Number –

the sector, us frankly new seeing new and that more middle us, others all to that technology productivity We through benefits. you’re haven't in the fuel by productivity of XX:XX middle to which of drives implemented L, not the in P So had, initiatives but our being L. the that many the are gives driven right, P and the

can, Ken, back investments up the line engine we of so that more going, we we gross and the So, through healthy end of the P with growth, but and customers that you only improve initiatives we keep customers which not know driving engaging that right? think are middle margins. technology L a margins, with philosophy and continued managing deliver could think us scale it's of to we’ve driving that the based that and but tailwinds to margin top If in and set

Sharon McCollam

well the that would cost is what no Vivek of order and these cost doubt all is and Groceries, adding a already we are to thing We pick Vivek that, help are the which XX:XX want online Brands. we on and getting XX:XX Own said we pressures be There second gaining add foundation is an to that units. increased as Ken, to IPO think in Own as a one going gain on foremost the focus continue share metrics. that we for penetration of we back to making We the first XX:XX talked have of cost in deep both all The have penetration that, to two-year Brands. those space be on gain that, that market go I in first it the strides offset strategy. just continuing some there there to on market fact on there the matter other is have businesses, were in to And to and the other view, of. we pressures. said, the in retailers are dollars my gained will great of it advantage basis IPO about deep, there of combat and be of to say to of In the still we're will we're electronics, aware opportunity I organization pressures. home retail. taken furnishing that ways also share growth doesn't that cost mind incremental has all, consumer of the

have have that opportunity still the to significant XX:XX Another tailwind We not pressures area a today. opportunity continue capitalize will two an of is we point Vivek offset that. going to penetration percent there, yet, these mix on of mentioned We have a five be and we twenty to or fresh. create in to some

because in that will area we to us of growing greatest we continue benefit also are that create view. experience, believe of faster but the in this margin it incredible are that We margin center is has talk than store. continue we grow is can to our about things to a do is customers fresh fact in mix a an the for we and benefit, the That from giving that fresh point we one

is would we just will tailwinds to that I all So, said a some few certainly offset the those pressure agree things Vivek are us to cost coming. add that would give what help

Ken Goldman

very Great. Thanks XX:XX much.

Vivek Sankaran

XX:XX Thanks Ken.

Operator

next proceed line Our XX:XX the with Lejuez Citi. of question. question from Please is your Paul with

Paul Lejuez

customer expected? prices those to elasticity demand and reaction guys. categories been highest think how levels and how through to and higher does that earlier of Vivek, where Thanks. not or Thanks. customer, about pass the pass you've has chosen to protein compare through what in XX:XX Hey you the the maybe what the of I terms inflation the seeing Curious you mentioned you're of

Sharon McCollam

XX:XX Vivek?

Vivek Sankaran

Yes. Paul, Paul. XX:XX good morning

Let me this. with start

behavior. my It at the enjoying speaks consuming change it the seen – And still and customer on. I We fact strength of speaks material in lot in to customer. think a They're so home. to opinion have not there the that cooking a

seeing with their the see don't changing see research changing are don't we're months. trends fact, dramatically. several in We our the over next in So, dramatically that shoppers, those and we we intent weeks doing

And we Number make basket. for So, margins important we're are that going protein number so, what's pass mind want. a see to inflation One so the in because inflation that's we can remember, optimizing yet one. the managing and and to way the you affordable keep gross always XX:XX that's basket but the two, right the is, we for two keep things. always up

what's combination it we And something those versus two to locally. margin do able are because us we the the very, through had. can with do very is thought in can Does I their gross that's ability The the that giving call divisions deliver help, manage XX:XX So, the dimensions if without the we locally. that's compromising know the necessary second that's competition thing that our And the we Paul? pass manage they it model markets to in sales.

Paul Lejuez

follow-up. XX:XX you. Yes. Thank another just And then

SG&A quantify moving year year changes some the progressing relative How one in over the I'm that On initiatives, stand twenty plans? can the front, about of curious you in were also which that twenty Thanks. where terms of two? kind your point you five the by to And of billion dial? is productivity

Sharon McCollam

XX:XX Yes.

one that So, why don't I take Paul.

a and release. the in increases press couple On we SG&A that quarter dynamics the the during the discussed there’s

deli, was The fresh of that we within bakery, the that first our prepared our That course, a with and mixed many the that. labor along stores creates department, go had hours difference of one foods. of reopening

we The drivers rate. that in is market saw increases the of wage second one was area the largest that drivers. the of and one big So XX:XX

that role pressure While wage stores we corporate We increases headquarters. I pressure any every you can wage virtually in like through area start don't way retailer. course, to with then base, majority XX:XX annual in of do contracts. those along the work you that other we would the have in have see our the we and company our we the all and can have of every way for come still And union have contracts employee describe across into

the higher on release that are order flows a a order press magnitude the had year, credit this P&L quarter the through but magnitude. based in also compensation of We last the of they in based of stock

Paul Lejuez

Thanks. five that one XX:XX it, billion? And Got point then just

Sharon McCollam

Yes. XX:XX

progress against that. We disclosed have not our

and However, continue committed we you that to to be as to would them we [ph]. expect on progressing [problem] are delivering progress

Paul Lejuez

guys. XX:XX Thank luck. Good you

Operator

Thank XX:XX you.

your line proceed Rupesh Our next with question from Please coming of the with Oppenheimer. Parikh questions. is

Rupesh Parikh

Thanks XX:XX you the more gross the flat on morning. quarter, on color think could on want Good for if balance you year. was puts taking and prior with wondering indicated year. question. the line. to provide to And the of be last the follow-up margin guys close takes I you my see I could you I

So, to is expectation full of updated I what for get sense the just year? a want your

Sharon McCollam

do Vivek, margin? XX:XX you about want back the gross half

Vivek Sankaran

the and flow investments. margin them going growth where XX:XX initiatives cost half new drive through XX:XX I which about that the help addition both back tailwinds that right, new we about are of and Yes. coming overall the coming need is benefits it we’ll use about earlier. feel us, reduction, So, is us the to make those and continue year good coming from and gross leveraging supply talked we goods in margin Brand gross to of scale flow our for appropriately to talked to so of have the chain with we to the that the we Rupesh, think the some are through things before on I make of shrink, way initiatives penetration think in promotions, we Own

the no, fundamental So, Rupesh, gross on there to no be should margins change that thinking helps.

Sharon McCollam

guide EBITDA, XX:XX we only as a gross We margin, just by reminder. guide adjusted don’t

Rupesh Parikh

XX:XX follow-up. Okay, maybe just then great. And one

curious chain, supply guys are on the where front on out Just just now? you stock the right of

Sharon McCollam

a speak in XX:XX it. I’ll Vivek Yes. to He on meeting let just that. was

Vivek Sankaran

XX:XX Yeah. like Whack-a-mole fact about the stock It's so surprised talk it. have is stock lot we any in let's still of but the and it's of but store, is day, out given out On manage we that something stocks, we're how of Rupesh. talking about

finding stuff if this are room down on ways you an to it. the of want the to exactly teams supply, is a might others we in to you what And And in, you may the probably back stores what XX:XX execution, execution. you not alternative. you'll that when that's alternatives to better little get find make what's finding, give want in you it, but than local comes now get the down proud If sure customers sure bit doing you This comes day, not come another but that that come be make Now, shelf. I'm so, right? much in the the where just front. And Rupesh, in to

Sharon McCollam

I'll that. And XX:XX to add just

approaching seen largest quarter we twenty five probably those to our all customers are over actions that differently that things holiday ensure can. order that in the we fourth we For of we the we are best in in of list have months, three this that a have the next than stock many been and you've being year taken offer the retailers, past by have

Rupesh Parikh

Great. you. XX:XX Thank

Operator

Mushkin with with the your Capital. question Our comes XX:XX next of from Please line proceed questions. Scott RX

Scott Mushkin

Thanks Hey for taking my questions. XX:XX guys.

Should more which to pretty a something think of kind bring on bit the about being little assume Sharon you that? So, I to that philosophy continuation the always Is wanted you're talk guidance. of of the to short-term, conservative the Albertsons? reputation I we going had

Sharon McCollam

XX:XX Yes, believe there in especially question that that would no that would I today appropriate. the and be that be environment in we're operating

believe strongly strategy. more couldn't I good a is that I So, that affirm

Scott Mushkin

degree the going just things be or other great. cost little questions and guess, it's going we think with a two, this. union the think grow about of going but on? a know Okay, given hard on labor I early that year something you to a lot it, contracts that's business the is as about pressures I to be to to is And then, on And it and really twenty earnings get XX:XX possible next to

Sharon McCollam

twenty post-COVID, until will twenty in what of the to and is about this the of we we but closer get the be going where that two consumer this learning not goes. with next the Scott, Yes, changes chapter XX:XX end there needs never a be is talking happen much to There so to year. ‘post-COVID,’

but and we to quarter we next more lot two. year, twenty think at a to So, the unfold try needs when we'll give into I look about twenty get you color start we fourth that, on talking this before

Vivek Sankaran

The if with remember can are that controllable thing Yes. only that cost, we XX:XX I'd and Scott is productivity things initiatives. cost work add,

all out points change? don't behavior Sharon what's is that predicted unknown if biggest we now. we've seen, consumer, And know, the think know I happening to the as consumer going you where is, how I is

So…

Scott Mushkin

slip one the is that investment? little period and in, company sounds going given an to And efficiency and is it capital a change one going further XX:XX are philosophy into last if bit it that's with then we the Perfect. what's like, be could on I – a ROIC investment philosophy the

Sharon McCollam

it that, is you is be of friend, as that XX:XX say a philosophy But will very and of Yes, I do discipline. not Scott, think is moving it a fast I we is can, your it as philosophy philosophically much how forward. would time

moving and but good Vivek common a together done similar getting lot as a solidified we retailers onto mentioned in other you we consolidated forward, opportunities we So, don't companies, job their have buying, they've by in the some of opportunities a have that. tailwinds. that opportunity. have still have a earlier, just lot of them XX:XX of We have way of know platform, brought we better platform, significant

four we the diligence to over to and think can months. investments high, extent next to I the around continue yes, those So, twenty be accelerate will the will we twelve months

Melissa Plaisance

going XX:XX we’d little just We'll could but a more it. piece, you three bit. to Okay. time question to really Great. appreciate take keep if We're by one a over run it questions, operator,

Operator

you. XX:XX Thank

Ohmes of in come the will Your Bank America. next from with of question line Robbie

Robbie Ohmes

will my Thanks. XX:XX and I okay Vivek Sharon. question. Hi for one –

you think customer the versus and ID on in give are of think staying implies, transaction speak remain sales what the off? seeing, to assumptions you visits sort consolidation maybe kind of size was guidance you traffic back behavior versus hoping, of I you assumption, the, similar what transaction more With that stores? same just, the that color that? of lower seeing the is versus in changing, a especially is I'm or trips know to on I can the do half similar that little size dropping what And to in the you're

Vivek Sankaran

lot. seems in a here, We going is over while there Robbie. the digital was higher, was about stabilized we we QX, Yeah, traffic seen What's that when was Back in-store rate – to talk have have store. traffic interesting – down. the periods in, was the last up coming saw XX:XX it traffic that the several

pickup stable digital a So, we've and empty seen we've again in seen store traffic traffic. and

our weeks go We have seeing new we and into this digital this just three pickup up. about service digital traffic so faster the the started on, app So, XX:XX traffic. started quarter, and in we've launched so we’ve seen

you So, Robbie, some to door stability thought over that a on we've gives traffic, store Thanksgiving I'm I how that, new here. that some see to color. how but know to That's rest of you going me people hope pattern started don't that get know to I year. about changes we're predicting the the

Robbie Ohmes

That's XX:XX much. great. Thanks so

Operator

ISI. with And your from Evercore proceed the of our Michael Please question. Montani with next line question XX:XX is

Michael Montani

for XX:XX Hey, taking question. thanks the

follow-up and seeing to Just terms you promotions, on know then quarter, the in could competitive into of year to quickly Vivek Sharon and and wanted you're the start this if I what throughout quarter environment and end? obviously

Sharon McCollam

XX:XX Yes, Vivek.

Vivek Sankaran

not We're XX:XX stable pretty seeing fundamental Yes, Mike. change.

use all everybody right. supply have doing promotions. doing more are sense being the we're players last is we also And think then doing promotions, digital I smarter about like my – are things challenges,

not we're promotional any change on So, seeing environment. material the

Michael Montani

XX:XX Thank you.

Operator

question comes from Please Research. with next proceed question. Our Northcoast of XX:XX Cerankosky with the your line Chuck

Chuck Cerankosky

everyone. morning, Great Good quarter. XX:XX

Vivek Sankaran

Hi, Chuck. XX:XX

Chuck Cerankosky

could new, evolved me, in of of and your foods old business during fresh prepared your you on progress meal please? excuse a comment little as reopen also solutions, the sections these quarter If, how the some bit XX:XX

Vivek Sankaran

on and on different the fresh Our to and you we've meals we to Chuck, we program, the do, we're the of in the I salad difficult what offer in we XX:XX that the back continue take about and could excited fresh markets The very seems now markets. shrink off, are side and yet the most Yes, store, that on that customers self-service through. down, hot are store. in bars difficult it back delighted crack feel that certainly, of on manage the as store I’m plan different to about thing to markets brought deliver already. on the it's side pull launched a see [indiscernible] to keep thing doing. saw get is very a is sense code such. and to the And in XX:XX the in bars, And cautious that then those we team rates It's drive keep really general four

it? the get how Difficulty] crazy thing is the too like quickly that [Technical constrained challenge equipment You else, that biggest there know everything because can is Chuck, and you

Chuck Cerankosky

Thank you. Alright. XX:XX

Melissa Plaisance

bit today, sorry balance be able ran Okay. the for to interest. weren't appreciate and to everyone. XX:XX get join day call. you your on Thank we but a I'm questions of going us is will I available for We to everyone we little Sharon follow-up over. Cody and

So, thank you we'll you very talk bye. with And soon. much. Bye,

Sharon McCollam

XX:XX Thank you.

Vivek Sankaran

XX:XX Thank you all.

Operator

conference. concludes today's This XX:XX

for You participation. may disconnect lines this you and your your time at thank

Albertsons Companies (ACI) 18 Oct 212021 Q2 Earnings call transcript