ACI - Earnings call transcript Q3 2025 | Albertsons Companies, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Albertsons Companies Third Quarter 2024 Earnings Conference Call, and thank you for standing by. [Operator Instructions] This call is being recorded. The call will last approximately 1 hour.

I would like to hand the call over to Melissa Plaisance, SVP, Investor Relations, Treasury and Risk Management. Please go ahead.

Melissa Plaisance

you XXXX us Earnings thank Companies the and Quarter Third Conference morning, for for joining Albertsons Good Call. our With are me and McCollam, Vivek company CFO. President Sankaran, our today CEO; and from the Sharon

update an for the provide view Sharon since announced of provide will strategic was Vivek on we going working merger an have you give will priorities what our back and a our on fiscal been early of overview Vivek Then closing XXXX Today, forward. over third it before handing Q&A financial management and an After quarter results outlook conduct to comments, some remarks. will XXXX we session.

I'd or federal like statements are could make include may forward-looking securities laws. the you to the that statements management of that during this call within remind meaning

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

those statements assumptions based materially cause results and or Forward-looking events that and involve from our expectations be could on and uncertainties actual anticipated. are to current risks different

Additional time information from from XX-Q, X-K. are contained cause be on to concerning filings, our and will including forward-looking results could in SEC and the those Forms factors time statements in that to XX-K differ materially actual

date, are statements or we and statements of or of events to otherwise. a Any forward-looking we new obligation only result revise as no make as today undertake such today's update any information, future

included of measures. and mind the statements prepared net financial that income adjusted in in historical includes to net the adjusted And non-GAAP Please financial a are income keep certain and management's EBITDA. information remarks reconciliation

hand And to over I'll Vivek. with that, the call

Vivek Sankaran

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

today's all is it of wonderful how you be to say me back let hosting call. on First,

our stopped driving merger we never business Customers Life that was disappointed for the investing are we strategy. or While our terminated, in

moving and an view what priorities merger of our announced update I'd you strategic use have to on working the time with we was forward. you on since an give been my provide today like to early

enhancing have continued modernizing X through to customer proposition; engagement we one, driving X and last the customer productivity. growth technology; priorities: driving two, evolve three, drive years, transformational Over the and value connection; four, digital and capabilities through

engage invest deeply customers, platforms our in Media digital drive to and designed These increased X for engage lifetime platforms. are data have more and value Albertsons increase space to most the customers, To growth sales, generate customer we continued through Collective. robust loyal digital

our these and our our The is so to e-commerce. e-commerce run out close offer inventory first platforms We we our customers, business of our merchandise is assortment. access to can of full stores,

have with driven X% sales performing to penetration grocery over Our e-commerce of investments revenue, market over in X%. our top

of business, Go This convenience our first-party been growth, Up our and third-party new improvements which the in in our and and higher quality, in development speed fully by in-home delivery. integrated has versus of app mobile is driven & capabilities Drive

retention we biggest While still grown industry and market, acquisition significantly to customer have customer our than of growth business benchmarks is it underpenetrated is this one and and opportunities. the faster compared

delivering are are sales we penetration. these as of program and well service consistent elevated customer opportunities, of a as rolling out series X-star store-based marketing to we certification To a capture grow to targeted and initiatives ensure level a

The of growth loyalty. these is digital second platforms

contributor and is retail collective. our a app Our into is tool the personalized primary and It our loyalty for and mobile of integrated business. point program marketing to entry data a engagement our is digital key for media

customers it redeem fuel we XXXX, enriched points of and to for rewards. to coupons, and April earn program our and grocery easier simplified In a launched make

off customers their For grocery the redeem first points allows dollars time, it simply to bill. also for

engagement, increased frequent spend. have launch, higher customer we seen the retention and Since more

get our members rewarded. to leverage strategic ways Going to partnerships we and continue even adoption, increased forward, provide see will to to we more expect with

these third health. is platforms and digital The of pharmacy

Our industry-leading annual by including total script been revenue. investments This driven GLP-Xs, penetration growth, have penetration pharmacy has of service. driven and sales best-in-class core XX% over excellence to in in immunization

integration through Sincerely driven Health into It platform the pharmacy our by Sincerely has high-engagement and mobile Health. with app X of of million the launch is wellness offerings value-added over lives. also been rewards a

is Although offerings. the spending pharmacy engaging and cross pharmacy grocery more business all valuable financially shoppers dilutive, exceptionally service and Xx customers, between are across

treatment. driver we a forward, growing Sincerely immunization and loyalty Going introducing a top for and Health as see catalyst pharmacist-administered

to expect pharmacy immunization growth also traditional capitalize script from and We on store closures. continued

them the is by The stores, stores, store-level which are execution. digital us feature their launched platforms that want with shoppers delivers and products geo-located an our the shopping we When To assist excellence these in use to for our our with fourth of in of mobile this, and is help coupons, we plan customers integration in-store digitally. customers real-time app supported mobile meals engage in locate enable lists.

to customers feature. end this XXXX, the in-store expect By X have million over of of used our we

increases see expect of future and capabilities Going launch planning deeper even forward, continued over customer to engagement in we time. are drive utilization additional to this to

generating platform, deliver measurement All Collective, we in endemic and fiscal in-house which data we and digital together in invested brought significantly Since is have 'XX. are and industry-leading technologies reach. which an AMC, brand these eyeballs, inventory or transparent improving platforms working easy-to-use, building then, to nonendemic Media with dynamic Albertsons

targeted also campaigns, shopper audiences, We've product in media to measurement. achieve ability run our define offerings parity improved campaign enhance and

small base, the these faster currently capabilities, is market. than a AMC growing on while With

delivering Looking brand in forward, consistent to assets. digital for invest across we omni execution campaigns our will physical and continue

more AMC and to largest opportunities partnerships of In reinvestment the one that inventory be our continues we fuel even addition, to have our into digital business. eyeballs, platform. to expect capabilities to new we build add

the enhance online. to engaged all center customer To places we customer price, customers, Customers ease date, and strategy our of digitally our both the are omnichannel at we Life customers, loyalty only memberships, in-store services everything initiatives because provide counts households which transaction proposition, also do. growing for our value-added and discuss now not the of I'll includes value the but to

So drive customers, to partners markets and increasing as to better needs. strategies inflationary include address pressures, addition growth, Own for for to evolve categories in value to our due with invest strategically vendor our These total certain Brands in working increasing and price, so our value customers' strategies needs to these category are in penetration.

To deliver this, need profitable products existing drive trust customers share and from increase of wallet that and at we will better source to customers. value unit a growth

at In alternative always and will Brands entry Own products an point, price feature an prominently customers so also offerings. accessible Own have existing Brands, attractive that we offer more

is priority capabilities our the to third of modernization Our technology.

we technology use do. Our north star has everything been to in

few strategically productivity make future to key initiatives. the invested enabler we of all the years, technology have major last Over growth and

the supply migration These pricing tools to manage media and new industry-leading replenishment digitization of pharmacy to labor, state-of-the-art the tools end-to-end for an e-commerce of our launch investments promotion, and include capabilities, and new and shrink the enablement chain health, the retail of productivity cloud, self-checkout, systems platform.

investments processes. will that evolution learning us transformation forward. have the AI model These to accelerate core capabilities machine to business of and elevate the us take going of operating continue long-term created our advantage They our to well position of allow to also

priority final productivity. transformational The is driving

our efficiency improve business develop productivity of have and continued costs. to our engine, to improve We systematically designed the

our we and as headwinds. this, initiatives proposition leveraging the to as invest the in capabilities X customer reduce costs. best practices achieve and $X.X and investments value our build next we To well billion to latest years, to in offset inflationary deliver recent technology Over plan innovations growth in and are savings industry-leading to business

working, consolidated our leveraging is initiatives and to is these rebalancing including next offshore The resale. of ways first of goods our activities. scale The onshore for our buy transforming

our or initiatives of be to These and WMS. to XXXX, new improve implemented quality, significant in-stock differentiate on automated automation we fully By fresh cost capabilities. our supply management chain to lower XX% analytics our our system, volume are our to and improve conditions, continuing In progress the our be end-to-end we end chain, the serve company-wide. warehouse expect data of WMS and rollout distribution our make of supply

enhanced technology store experience improve engagement. platform And to operations, drive associate finally, a leveraging deeper more we customer are robust efficiency, in and

For experience. customer improving reducing AI which implemented prompt that example, misscans, shrinkage provide associate the a we've and for technologies and is inventory

We're enhanced also departments, inventory which produce shrinkage, in productivity. and of utilization sales, is labor reduced improved increased quality our driving technology expanding the

third I will now and hand an outlook. an our on for quarter update our it XXXX financial of over overview to Sharon

Sharon McCollam

here Thank Vivek, be you, and good everyone. great with It's to you morning, today.

investments and have we We operational our are business. the our made third are pleased seeing quarter in with from we benefits results the

We are these results driven the and our a our premerger, than initiatives in that company future. affirm have confidence today stronger

the in consumer during operating delivered quarter the performance and environment solid across an We cautious. remains where all key metrics financial

adjusted $X.XXX XX% XX.X of share. increase sales adjusted financial of sales EPS highlights per $X.XX an of of Loyalty digital quarterly to identical XX% to share. and the and increase our of EBITDA increased members XX%, per included quarter dividend increased $X.XX by we a The X%, million, billion

now additional service in increase primarily The and primarily our increase growth offerings of XX% The a by pharmacy increase sales. first-party X% increase sales was by digital in I'll digital sales the continued driven by levels. a ID color innovation drove these details provide strong was financial on that in improved fueled XX% results. driven sales, and in digital

'XX gross QX Our XX.X%. margin was

pharmacy compared the decrease, delivery expense, drove productivity offset benefits last XX by to fuel this points the Strong increases year. lower and gross margin an in digital growth partially in LIFO costs to the by our which sales, gross carries and related was rate, Excluding decreased initiatives. picking in margin and from but continued our overall growth sales QX basis

Our expense XX.X% quarter. this rate was selling administrative and

basis and benefits was last SG&A our including offset primarily the leveraging increase third-party the security services, by partially X from fuel, productivity driven This initiatives. of merger-related in and employee increase costs store to Excluding points costs year. compared by expenses, increased an occupancy-related rate

QX decreased debt. to $XXX driven outstanding million $X This expense million primarily was reduction during 'XX. lower by Interest

XX.X% Income expense income decrease the an rate $XX compared the million, last of QX X.X% driven tax settlement. tax tax This a third rate tax year. was audit discrete to benefit effective state primarily recognition by related in in $XX.X million effective to was quarter

effective Excluding have benefit, the this income discrete rate would approximately been tax XX%.

in per 'XX mentioned adjusted QX $X.XX EBITDA compared And highlights, $X.XXX $X.XXX adjusted share year, to compared 'XX. and the in last QX $X.XX billion was billion to EPS was diluted as

balance modernization and to technology and the million were fleet sheet of of by our driven cash investments in $XXX our Capital flow. primarily and platforms. quarter now third expenditures Turning store digital the

strong. the also We $XX the our at stock the common Net third dividends. million leverage balance of X.Xx, remains sheet debt end quarter and was to approximately returned through shareholders

to our like I'd XXXX discuss now outlook.

do As we Life continued balance execution. of strategy 'XX, we in confidence operational so look fiscal the for our forward Customers with our and to

driving platforms, and leveraging drive made digital to efficiency our We to are in engaging our traffic we our have customers in the operations. investments stores

So with This of behind and EBITDA range X.X% are in to that in to to results ID versus of productivity. X% benefits versus the is as expected QX billion. X.X% billion $X.XX to driven billion us, by range our X.X% our increased increased of $X.XX billion adjusted backdrop in the and $X.XX EBITDA now $X.XX adjusted the sales increase ongoing

to increasing are We EPS in reflect the EBITDA. $X.XX diluted $X.XX per share adjusted also adjusted increase corresponding our to range to

be expect Additionally, range benefit recognized rate to due quarter, XX% of in the to tax we the tax full state million the year our $XX this income discrete to XX%. third year in

of expenditures billion billion. the in $X.X range capital remain to Our $X.X

I to Vivek we would on longer back for about some over it hand like capital the comments, allocation to thinking minute how spend closing term. I are a Before

First sustainable to continue long-term will investing drive business our we and foremost, growth. in

recently billion dividend time, opportunistically XX% maintain the by to cash to excess as repurchasing declared share authorization. morning. our repurchase quarterly plan finally, we demonstrated also this increase $X shareholders under over plan shares our and to grow And by seek it We we that return to announced

in our balance Our previous to provides and will it in strong, we Consistent fiscal forward our is April. our cadence, flexibility drive provide our for outlook fourth generate call value. sheet seek conference we with and quarter 'XX long-term business as shareholder sustainable

turn call closing to remarks. the I for will back now Vivek over

Vivek Sankaran

Sharon. you, Thank

start forward, strong in As next we this track performance. we record of condition positive look financial with chapter business a

core technologies. of our strengthened Over sources the heavily revenue of the capabilities developed through and last X years, rollout new in we have new invested our business,

best even our and critical added strengthened in positions. retained have talent and We talent

Life for Our Customers is strategy working.

added transaction engaged and have digitally members, customers, omnichannel households loyalty increased We counts.

and efficiently effectively proactively hold, costs. Our operating stores take we more technologies are our our are new managing as and

to this Our old to puts landscape. We to us a fuel productivity programs, business continue of new, are transform creating position both adapt ever-changing and for strong in and to an are inflationary all investments and believe headwinds. an consumer the offset

in to that industry. compete must elevate also very best performance our our with the we We know

challenge a path We by and so. energized that to are see doing

in ability execute are We our confident these opportunities. to against

our plans fiscal of more share the at will long-term We the end of year.

I associates loyalty their XXX,XXX like our to thank and our would and communities. customers for to dedication

In We Change for and are they difference play so that our December, the the They are of and dedication. the role reduce on food report work proud all we highlighted applaud I insecurity this the published for environment. make. who latest operations of Recipe the fighting of our hard possible, in them our associates to impact and and their ones want make helping

We will now questions. take your

Operator

of come Our from line the with questions [Operator Instructions] Goldman first Ken JPMorgan.

Kenneth Goldman

coming see, outlook of adjustments up. were the EPS made, wanted the ask line. EBITDA, to It's top and on particularly guidance I the great course, about that to and

a decision the top specifics of or what you're the rather, IDs fuel, around maybe Could ex that? little the any quarter to started? top line seeing as about end, -- trim talk you And bit the fourth

Vivek Sankaran

what Christmas Vivek in, the seeing, to has market as data it's improved December. holiday. materially share tough December and Ken, beverage a performance our coming But slowed it sequentially in we're very And in back a sector been like, food that Ken, down looks wonky December. it's little is get X-week in the overall here. of kind

So just reflecting we slowdown, experienced, which we're that too.

Kenneth Goldman

than know Do macro? a believe a based point. it's not just of a on you data, company-specific but this, more promising of pressure more macro your I you're

Vivek Sankaran

the seeing beverage slowed and sector correct is We that right? And was I'd there's had because window. data food the -- down broadly. too, we're different, is shorter calendar with a Ken, recognize, That

it -- And so and is important an holiday.

it. recover So it's to hard really

about wanted So cautious to that. we just be

Kenneth Goldman

idea then the reinvested to you And much be do $X.X have rough talking time how Of of at line? will kind follow-up. billion versus of any this of about you're terms the efficiencies, bottom that quick drop in

Sharon McCollam

on outlook our Ken, we we'll be in in and call conference haven't an that, providing fourth outlook provided an quarter XXXX on April.

Operator

next line Partners. John of Our come from questions Guggenheim the with Heinbockel

John Heinbockel

with do share, wallet think X or over right? start about you've to customers, up years, that about wanted right, the you I when the size last Vivek, you think new all picked how

share to more your Because are? long to on wallet a high is they come the them around is households up And how How does as not while. that opportunity? system, been have their big take move that households as where that mature

Vivek Sankaran

John, great question.

platforms let's that's when of we up, that third engage maybe platform, or Xx. about even a they talk might those what platforms, in Xx, we'd think second a is When why X have. we different number I see right, the And that see, Xx or they that say, goes Xx. one in any engage you

of do platforms first, then to to each platforms. one get them in on then a on these, there's them get and And curve, is, engaged those what of multiple And we our right? any ramp-up is challenge certain that know

are, why of how excited, drives the these give you And we're notion share deliberately people very wallet. that's -- engaging I'm with of but we ramps. specifics on what work that start on because these going platforms And that to we of not and those ramps

of platforms. the and John, on going pace we -- that be maintain and we do so of at that that so also What that, the base. the we of about more fiscal. that's get to that's correcting also we end need bring, into that the to we value the people while come proposition some sure make doing as but things We'll them the these getting maintain is we to back talked planning the part into we're And that and

John Heinbockel

right? negative is about inflation and to food others, take for volumes, and right? Maybe that, in just out, for we When you, So follow-up think think do just are food if that volumes flips pharmacy this if not you a I positive? think think you to I territory. it's still

are? think food the that your in Or less? then Or what it Is X% plus, that? where do is half out? secular you Is shake it it volumes does And algo X%? of

Vivek Sankaran

X.XX%. a about, we've of to come long-term X it. That's the how -- X% algorithm XX growth. thought inflation Think about that of we food we about share gains some and there then as maybe Typically, John, of it. how volume think That's are think with bps that as is plan

doing I It's when predict And hard the kind back that to share food get talked last would gains XX country. come things going about But we're question. be our would the volumes by addressing your in typical of that. what to to bps be

I for think that answer. trying we're all to search

Operator

with from Kelly Our the Edward of come next Fargo. questions Wells line

Edward Kelly

hear question investment. initiatives. start I to good sizable a It's wanted around to just productivity the with

been there's require deal coming might Albertsons think I investment significant bit upfront concern break. out that more of little a the of

kind being I concerned more timing we investment. I'm productivity The just press maybe maybe how all next a some for of about think near-term curious just about around think some that? around But mismatch the productivity a of investment. are little bit of you release of suggests provide that about that as color pressure bit little pays because year Could there maybe of you're thinking and and investors

Sharon McCollam

lot and of consistent Ed, cetera. end along we've the had, previous more to are the in investments, cadence to the Obviously, to see the et at share for productivity need and talk to we're the -- fiscal the our about at with we will where cadence there's looking that. Yes. in going be provide a with of We're April. we have year, outlook we'll able we 'XX April, that

point. with to going we're cadence at that this stay So

Vivek Sankaran

and the in we've Ed, you've investors we've right? And be put investments you assets their best, -- is are to talked should about capabilities that what about that reinforce technologies that our concerned we've that company all the just there. So in the not that. And made though in ensuring done at I'll building we've that

We never throttled any of those.

just fact, in. capital we're putting investments, more more became those every in getting and dollar productive. We're for In we more

Edward Kelly

then maybe a just And follow-up.

You media, can central it's have all private contributor more meaningful cetera. to a whereas you the lot a of become the do initiatives, think How you label, et saves, whether ramp including buying, of the opportunity, cost P&L? those quickly they

Vivek Sankaran

at different, and go rates. all different they'll They're

are game. we only these see when you and of are quickly go you late example, have we talked exciting -- -- there, an is to great we onshoring. not about that as companies are elements So capability. that There about that, what's can -- that we it's offshoring, go because There's established -- think

move there's will it So aspects that of quickly.

then And have put there's so we can the move some aspects buy there aspects in are buying, -- we move of that faster what can bucket. that we can quickly. In

of want companies caution we Some done it got because who those, with to and also know it wrong. we have move

we And sure we so move make to with caution. want

drumbeat But I I I from think you'll think of productivity of simplify Sharon see X-year frame. -- time it, to see over coming you'll steady the time frame if out, all a these that things was pointed

Operator

of Our next Parikh Oppenheimer. with line questions from Rupesh come the

Rupesh Parikh

your be in could terms in to commentary that driving any of back what going December, industry thoughts the So just earlier about slowed slowdown?

Vivek Sankaran

an Rupesh, about is much honestly, the shorter we I holidays, sensitive. And had -- only between in being consumers don't cautious, that price material is different a a know. that right? being that so consumer is the is where thing especially The environment window December

can could that thing contributed it. out, as we'll but know I only comes that's think think the more have all I of data Now to

Rupesh Parikh

question. follow-up And maybe then Great. my

margin versus on QX the gross so see declined just sequential improvement a on line, gross do we Sharon, QX. So margins.

Just for QX. how it you're thinking about curious

Sharon McCollam

to do growth continued an drivers we we and our see provided business. absolutely sales, margin. but the We to We the expect same for going pharmacy haven't are in momentum have in e-commerce expect outlook in QX,

shift going create are to same mix those of both the So impact.

were by, And what it when you those look at was productivity. offset

engine continues productivity to Our well. run

look I it, think to it's similar. be So at that when going you

dividends already and and you you to we about The as forward. and we we learn. expect couple self-checkout, its invested other put learns ago. pay some talked it our it to we -- that weeks saw a continues when area And that initiatives guys shrink, technology. we're to that to technology seeing is We've of continue technology We of benefit AI will

Operator

come questions Gutman Simeon of next Our the Morgan from line with Stanley.

Simeon Gutman

hear I share So last in of to through wanted years market couple we since your spoke, about lens. the

pharmacy, information do You what curious have And do. excluding your Where we better market-level than you is. assessment specifically, stand?

comment especially third an you're the share that to market Obviously, don't But just overall you Vivek, are, you aspiring where through that's if a landed know comment stronger. you made where get assess I the quarter? can growth or level. you

Vivek Sankaran

Simeon, think that about share, to I'll when us. things clear X market very, very Yes. you are tell we

mass growing retailer are no real a are and us, retailer us. a have they anybody And much faster We to okay? competitors thinks, what that club matter than

we with win share with to that know got better retail, to compete segments market market we've we get we've certain gain performance comfortable our about to can share we marketplace, And compete in And overall. in feel of the but them, to them. until got to

on the what rates notion got in of Simeon. with I industry, compete reflecting is the to stronger that's getting that best the our to very accelerate And very, was we've growth

Simeon Gutman

My follow-up, we're growth. GLP-X. chain, you volume I talk we'll mentioned, to sure information the you not there. across And when guess, especially have the on Vivek, pharmacy, I about get And want

consumption? the between ingredients GLP-X right then usage now? is Do of a the Is unit there direct and part you that think correlation

Vivek Sankaran

for That of years think and in in you're because that hard it to the we're of amount XX-plus calories the seeing the could be, that in having growth food completely to Simeon. that and industry, It's -- beverage GLP-Xs seeing across amount me now for has. ignore just it's been I of hard reduction

of negative it. people back XX looking a but -- certainly And conclude always can't less, we that's that it hard eat XXX it's right? of the XX% think volume, So is to I XX% of instead going question, are about, an for at earlier volume, bps bps of problem, if

Operator

line Our next UBS. Carden of with the come from Mark questions

Mark Carden

follow-up another on So to start, pharmacy.

from sales do the Just driven when is your competitor closures initiatives? at own you you terms in by think look capture much it that how growth of versus overall, being of business

GLP-Xs a being then talked positive. about And you

quarters? Just what contribution recent seen you've relative trended how its in to

Vivek Sankaran

Yes.

COVID, So X a our easy platform I a of schedule. both. One, the phone, made it pharmacy of of think constant really entire during people for pharmacy so get it's lot to on app. -- They combination our spent years we the on updates. getting We energy

-- get where We've world application into of so called to you this you Health the navigate. Sincerely pharmacy, it of launched this and more gives notion much

So you we in world you're our pharmacy, app. want stickier make the of to stickier and on

lot done we've things. So a of

stores execution Our our is better. in

Our NPS is better.

a done of things pharmacy. we've lot So to elevate the experience in

of addition, we a seeing In are lot competitor closures.

of So that customers it's is a into combination getting us. both

By but the a engaging shopping in the customers way, of to us pharmacy. lot it's are now new franchise, also who with customers grocery just

So those. we both have of

GLP-X GLP-X, negative. respect contributions With the are to

So imagine it's important they're mean those over customer, growing. -- economics it is I an We the just will But change, -- right? again, it's customer negative. but GLP-X we time, not -- is

Mark Carden

cohort? shifts comp, Great. you by seeing when any overall in at And grocery income then just performance your core looking looking are --

Vivek Sankaran

not Not a from seeing cohorts. We're serve whole material a anything We a income lot. different of lot segments. the in change

think we seeing tend is a in retailers. customers to environment more cautious are shop that I what

we're seeing And so board. across that the

I ago or are so X monies the distributed year a And from, years say, ago. getting differently think

Operator

from Sachs. comes Jordan question the next line with Leah of Our Goldman

Leah Jordan

further some from optimization I footprint you've what if But know could you here? comment and view opened you First, year. just store stores today. see this done for remodels how other your opportunities do new you on

Sharon McCollam

think opportunity. look the we about we Leah, talk first X I'll forward, things. As

we had year, some opened exceptionally strong We and have this stores store several have openings.

have can data our customers. to capability -- And real great we really identify are And experience work estate. increased drive a for analytics are in we able markets being well our where and we

to it's very competitive, opening markets because speak course. some don't opportunities which in So markets. want there's of I to

On real the portfolio. over footprint, the it, several about general last talking of a rationalization the estate hygiene other of of side I'm years our from

unable, merger We really period. been to ways, during do in have the some that

start So that. we will seeing

there more You'll openings. don't problem, previously the over an closures want see couple we of you've seen be some hygiene. could than some indication because but read just next store more is years of What of into that

Leah Jordan

media think dig Okay. Great. I retail go That's into helpful more. for and back I color. to follow-up, wanted And bit just my a

detail you are provide on how in And think meaningful along. a just when also position and you then this if could little to competitive on your marketplace, a view detail opportunity driver could more you recognizing be how the just some profitability. Just the see peers the you more bit further -- there

Vivek Sankaran

So took Leah, it do in-house that. of the we We've a business, to media 'XX. the technology platform in energy spent retail lot building

We base from are growing. We're a growing smaller though. fast

So very become the material we it do think horizon. X-year next will in

doesn't do a are that executing digitally, think, we In because a to on call And ability in clients, the many cannot and our our money great I customers spending we starting the a our customers. fact will make XXX-solution our of executing provide a it And strong have later, -- we our the -- stores mean difference. still if build I business we can it, who presence. markets, are have

platform the we're sense to now just So everything selling do we're the business, And building we rather just need. the business got about business. excited it. We've focused the building in on than the

Sharon McCollam

Vivek's in look seeing working we're success, you when within what platforms. prepared what it's been on, building those and we've And remarks, where at been X the we've growth digital

That in over have years. Media we we robust several Albertsons is to in heavily Collective, last the especially create for and what we need invested inventory the order last was the X years, necessary in the that those

our start of share to really are we able market. and to now up that capturing to step be So fair prepared

Operator

come of questions Robby of the next Ohmes Our Bank America. from with line

Robert Ohmes

outlook digital, ex you Maybe for with gross you, to and Sharon, the pharmacy help gross can in on and give you give -- how FIFO what's going what us some saw what that? some just your Just this FIFO core color what's the margin on us margin. quarter for

Sharon McCollam

Yes.

that Robby, dilutive, consistent, carry has impact in sales, our been seen I margin, which shift mix a the shift about mix driving, very to margin, gross So been what going actually has this the of fact to pharmacy we've talked is it's the course. just and that in

we XX% e-commerce, been running in and all this increase then are And quarter year. the the we've ranges in XX%,

So continue to we stay that to robust. expect

the to margin going shift that's negatively. So mix

then continue initiatives And do productivity to gross into expect we the to drive margin.

expect going are drive continue think value seed positive. AMC. I and outside lifetime should those and you which to to we So areas those huge as continue, dynamics are actually a that customer into see XXXX, These

why be excited very will those. that's of about to both So we continue

Robert Ohmes

shift the -- the mix going And pharmacy or of in any kind Sharon, just core just ex pressures the competitive-wise you are from gross sort anything and digital, seeing of pressure margins? on

Sharon McCollam

in price. I to think we invest continue

have but do other as shrink and we that, It opportunities also in So includes we things. other productivity.

believe we So job a we been very have doing good that. balancing that

over time, why is margin that we that there could $X.X pressure, productivity target. we we imperative that with shared today, this you drive and billion just it you But and engine be gave that's

Vivek Sankaran

abnormal. nothing abnormal, Nothing But Robby. anything

Sharon McCollam

No.

Operator

come next RX Mushkin the Our of Scott questions from with line Capital.

Scott Mushkin

I Southern in there down our are with those thoughts know California, associates you have some so there. down stores

Vivek Sankaran

Scott. Thank you,

Scott Mushkin

to yet marketplace between share. want take on where topic lot examples with I there this, to But out is around something your wanted touch merchants, of gap thought, get this I mass a that there price pricing. people. a a they're in Obviously, gaining decent are one, is my on comes up there and the

experience, do enhancing you how so investing just versus think reducing as kind about store the of you balance prices? And merchandise

Vivek Sankaran

not right. you're pricing. It's Scott, this conversation on new, right,

it, XX months. We're some our just all context the I households across million sure though. in shopped last us on increasing we're to And want transactions. engagement platforms. growing I give make XX So you

that are and what charge, value we customers the it So prices and in offer there net-net, that's continues. seeing been still we before, for

do cautious. strong retailers customers outlets. shopping are are couple of recognize, that feeling They I very more recognize They're a we doing that think. in are pressure. that There's you pricing. know we well. Though, They're absolutely

think way do that we to we we we the get we so some is are forward. have markets macro to -- we where there And that. a will are as sharp, and and about going And do problem, this do there categories be are that go don't need but there know we'll

things of And to to. talked that that. where need need need But to we see, we're intended we recognizing sharper in lot generate can productivity, you'll productivity that, that that there's the that get are also so to drive. the fuel doing statements, to generate we opening that about do We a we

the ways we But you that go value, to our all stores may the all finding And and to elsewhere. talked that a about value been and always not be of our to get we've provide, level add customer can adding philosophy products we are that service those. able has about provide

Scott Mushkin

about your about then fleet great, is maybe might what in a on need store overall And you and in? the do when experience the you follow-up to invest you That's store this how CapEx, Vivek. think think experience, question

investment, I is attributed in the and know, some obviously, are probably that. And Walmart investing you to store How market experience overall share gains lot and the do their vis-a-vis of their CapEx? think a fleet, about

Vivek Sankaran

last Scott, of about investments, couple behind not in the analytics data just new our also -- years, when the it's talked but remodels. become Sharon stores, in in we've and the

a is into growth. dollar we purely when maintenance on now understanding a for versus deep very of a put that for much much store, of that how driving is how have We

driving are behind -- whether initiatives. but -- that capacity the and store think initiatives in more growth ready more experience following meals, investments that creating giving driving all growth, And are these are these -- when or are in that a is e-commerce better investments more we about driving going

we capital. And our that's deploying are how

effective investment deploying why every store and is -- a capital. So that in is reviewed efficient our which single and we've become way, in more

Sharon McCollam

the CapEx history on of our X we have Scott, had the in years invested capital And than in we in if X last history. the look money you company, to more back in

CapEx our though were plans in merger it our fleet what related of strategic on to we no a related even our to in stores. impact was situation, had And

through continue in So to we our merger the stores. the invest capital of remodel

So strategy, been to moving Vivek consistent has described, stores there our forward, in expect deferred maintain we the continue and do as invest same, and that to a maintenance. to

Operator

check questions on with if next Our mute, please? Michael come you're could of you Montani the Michael, Evercore from line ISI.

Michael Montani

you Can me? hear Yes.

Vivek Sankaran

Michael, yes.

Michael Montani

Great.

Okay.

front. one. Just how wanted store that I to and how rationalization was the should be X elements, ROIC guess, to that I think could on at about to moving important if just wanted could. I we be unpack, forward One looking

how is authorization? this the guess, flow And billion Sharon, And And then about year? for you pacing about what cash against the buyback the should side. sustainable $X free we really around would that free then was I secondly, think think What's cash flow?

Sharon McCollam

Yes.

April, So about We to that. outlook our algorithm. and our to -- We we're I in provide a did adjusted to lot give would going expected grow say X%. this, said a XXXX grow we we're going and that. going faster than slightly talk to EBITDA we're more about long-term We

We $X.X gave you numbers, billion. billion the $X.X to CapEx

we you we model in that as it very and consistent that, the past. So at look see

in give you outlook, we'll Michael, more So April.

are the you with of met couple ASR do buyback and to as an opportunistically we shares, On with of weeks we expect shared we all a not you when buy doing we ago. side,

do So excess buying intend -- with opportunistically back but we shares to be cash.

Operator

questions Group. with Telsey from line Our of Feldman come next the Advisory Joe

Joseph Feldman

billion wanted targeting, you things effort. just just more bit improvement Or dig The do to up cost the I adds $X.X you there and opportunity? a can where in guys $X.X buckets that it more is small you that of big little to with it are are lots see efficiently productivity billion? reduction

Vivek Sankaran

it's Joe, both.

last X or if -- history productivity. over just -- years our delivered we've we've back you always look delivered at so, So we've the

In all delivered you told more we've fact, we've about it, right? than

-- that we're become of -- governance it's everywhere. and good to really the now that it, -- find around of have continues. the that, And is So part And we company. pennies fabric nature what and productivity of at and the the that productivity engine

things, new though. adding We're

about all we of that those better, talk about will that talk we new new part billion. are And $X.X talk G&A, this be when tranches productivity, buying we're of we productivity about adding. So

a targeted imagine. it's are and These And line as So very are of Joe. can very, bit these at, that items. huge little both, looking we're places you material

Sharon McCollam

these what's And not have we productivity is In for working now we're starting. other that words, think on been initiatives years. I X important

know plan we're it. a We going out is what This got just do today. didn't We've after. and come We identified. $X.X billion plans lay in place to

And you So well call, it our very unfolding. some of even guys, next by things these see will is underway.

Joseph Feldman

-- Vivek, I feels share a you touch think doing, on you're did and bit you're like the explain buying you process. a be it Maybe to on little that centralizing more. And can buying that? bit the little you're That's with more that -- actually going differences great. color could you

Vivek Sankaran

to leveraging more get frame think I'd scale I more for way be think us, can and going of scale right? so kind they to that the our more. doing I get growth can suppliers, it Joe, going be our we're the our they And we're leveraging is that with

not we away So better people it don't less want mental data I models making. think scale because that creates centralizing, with think of to But find leverage as decision the are ways to I with I walk that technology word productive. -- can and that

Operator

come questions with from line next of Our Kirk ROTH. the Bill

William Kirk

deal the interested bidders In markets? those your process, with conversations court were stores stores. continued, made divestiture comments over closing in about potential in Have there particularly of possibly some exiting XX bidders or considering

Vivek Sankaran

see in got on focused business. front opportunity that excited We've of maniacally are our and so operating much us we we Bill, about. we're

where that's And our is. so focus

normal we because the that pace been on. me about business, much catching mentioned to of Sharon haven't right, same more couple we're to -- put the last let about the focused But the are to up store it of what earlier years. do What way, course related over able closures that's

time We having conversations not others. at this with are

William Kirk

about some are as follow-up, Maybe versus performing, you among things could product income different fresh, categories versus detail or frozen then a food like how different performance us fresh And cohorts. asked on Okay. the Mark give earlier that. like packaged

Vivek Sankaran

we -- of we -- bigger That's Yes, we a we to with. be are have fresh. assortment tend what lead

breadth just the not our fresh assortment, proposition to add we fresh for assortment. the our always value So -- but that our of that's value customer begins the with

I meals, exactly So our you I'm into walk ready what saying. stores, know say when if you'll

You'll customers us convenience. see that kind providing of

us. destinations that's So become for

we So the to and tend where Bill. center is how always lead. always we That's think do work more that's that that, work start we the helps, we proposition. if with about have do store, our to in And

William Kirk

Okay.

Sharon McCollam

this. what other It's to we'll to critical buyers, just add is say obvious, it. this only Vivek that, it's said but I'd about things Bill, transactions, that And question say like

shareholders. Our value means And if consider look job is transaction and will to we, at a strategic to for doorstep, of those that course, comes create the long-term things. that our

terminating, but at to versus company reactive this reactive any protracted this just going it and course, not we're described has had in point left Vivek because that Board up or our than this strategy, our -- time. we more not ended it sense is proactive as of value-creating be a merger a it's But within proactive. it

Operator

Our line from BMO with the Capital Bania Markets. questions come next of Kelly

Kelly Bania

e-commerce. on disclosures the Appreciate

maybe correctly, your XP I think it a comment I'm of that there correct wrong e-commerce if me I if XP, is there. was heard bigger the component than but

and as versus along of Media you with think the balancing But within about of implications was those areas curious think how X just those Collective e-commerce. opportunity of you that e-commerce XP, XP about different margin Albertsons particularly components growth the

Vivek Sankaran

than of that bigger right. the you AMC us and you're XP exactly us and and XP. that, The because gets our our that engagement said we do like And is inventory yes, gets Kelly, that XP, what faster it's growing digital than such. to

gives all customer, gives it data to the we right? a them other also us it platforms. the on the us to -- chance connect But And

our them business and navigate So I open pieces people, app, tell on engaged. the And know the is, always we get you'll want our laid app you entire want and app. out if to see our all what business to in the

of -- it, our first at the From by -- the at better and and which become speed way, but we from an better -- importantly, it. and the at better a so at both the and operating cost we've deliver party, from standpoint, economic

focused We that. products, at good And think really matters. at we've and which speed become their at speed customer the maniacally we've the gets

all like reasons. we business So the these for a Kelly, lot, XP

Sharon McCollam

add to business because And serving when and Thus, Kelly, just are where, the would us is that. our important is how want customer they XP be is that most what served. I choose there customers who important to

And platforms. both, due made in and XP the is fastest-growing far we is we digital those business, X by of support to but investments the piece that our

Vivek Sankaran

yes. said, Well

Kelly Bania

associated should largely pressure think XP we pickup? that? with that margin to that Is gross And the that. with a how margin the and on should the about follow-up associated expect picking a just gross And long pressure How we continue? labor long

Sharon McCollam

substantially. our digital grocery business to our shift, shared business that today with grow to total e-commerce expect is continue to remarks, our sales, Yes. in -- we grow. to Vivek that you X% We reported The mix of his we prepared up and expect he

grocery It's underpenetrated market. look if total at the you

that that to the in the the to expect you case. for I be creates foreseeable data So when collective, that future. the value we at continue look And media want the

Vivek Sankaran

And customer the to. that's where going is

Operator

Research. from the with Cerankosky Northcoast questions Chuck come next of line Our

Charles Cerankosky

XX% that off, about benefit, guidance tax and ex number First the in that think XX% that is rate? is tax being state used the next should the tax the rate for that year, we

Sharon McCollam

Yes.

Tax -- You the always Chuck. that can range. the little volatile, good a math but can do bit sounds is That's use a you math, good.

Charles Cerankosky

number do are point? then And what And to looking centers, are how the distribution you next this over automated at focusing the the of on at -- X automation are what many years? you

Vivek Sankaran

Chuck, this X opening early we -- are that have, or done, year. X X very X think, I

that. excited are about We drive continuing to

Board, it. from capital associated set of the that's approval with have a We

The team And think productivity it. very of at for and important is both driver we performance a better us. it's getting

So we're continue going roll to to it out.

Operator

Melius with question Aiken-Phillips Research. Our Jacob will come last from line of the

Jacob Aiken-Phillips

consumer. was So income you changes a that you but on any had little more on maybe kind provided understand on I or and just level. variations on I any wonky, the changes to color wanted of then XQ? see regional in if since detail December But more

Vivek Sankaran

lot whole a more. Not

weeks it if see or I that. was a longer think thing whether something December few we play how just need than the next out, to is December

color that. have more don't any I So on

price few than that they're more think, shopping a macro not from went behaving is consumers months into any know standpoint from are, are now I sensitive. more a think -- I they were in I differently consumer, pandemic. ago as We that they stores cautious. what where They before The said, the

So compete for the wallet. and changes of how of that share -- all we dynamic

different seeing are segments and try our consumers. win to least that's not of wallet, a We that really it the we We have they easy platforms. -- in consumers. anything things between make to do the we assortment we're and dramatically with from focused make -- that, that on -- we we business But change on at for When easy think between again, -- We to and our focus for different different of we we a few. try all serve. to engage gain we're try fresh share where them with And on.

Jacob Aiken-Phillips

a implies the on for upper and puts the then so -- guidance you end range what of takes and EPS. lower wide -- And some end give Right. EBITDA versus of kind for for the would Could XQ make comps, you hit that?

Sharon McCollam

in There that big happened the which up things your are ball games, in time go of into our our and in quarter Yes. big we in markets ball end which sorts things. -- several a the -- and is those December. But in fourth the in teams will and Remember, quarter. fourth the grocery starts

have We Valentine's Those us. for time. very Day important also are that holidays during

outcomes. We -- the so of some in are things the those variance drive that

Day, some Valentine's during et Christmas, mix There's Bowl As timing we the Super and saw again between year, cetera. shifts timing this shifts. there's

variability. are that create things So happened this quarter that those the during

Operator

That over does I hand conclude today's call question-and-answer session. Plaisance remarks. would like for back to closing to now Melissa the

Melissa Plaisance

look in you for participating everyone, today. Take And follow-ups. Thanks, we forward talking care. to with

Operator

We appreciate teleconference. today's conclude does This your participation.

time. this at lines Enjoy the your disconnect rest your may day. of You

Albertsons Companies (ACI) 8 Jan 252025 Q3 Earnings call transcript