ALBERTSONS REVEALS 2021 RESULTS WHICH INDICATE CONTINUED CONSUMER SPENDING DESPITE INFLATION

PUBLISHING DATE
April 20, 2022
CATEGORIES

Albertsons Companies Inc has released its latest sales report which shows strong shopper spending habits despite inflation.

The food retailer released figures for the fourth quarter of fiscal 2021, the full year fiscal 2021 which ended on February 26, and a fiscal 2022 outlook.

CEO Vivek Sankaran said: “We are pleased with our fourth quarter and full-year 2021 results and the continuing momentum we are seeing as we enter 2022.

“Our strategy is working, and we are executing well against industry-wide pressures. We want to recognise and thank all of our retail, distribution and manufacturing teams for their commitment and care of our customers and their communities.”

Highlights of Albertsons’ fourth quarter of fiscal 2021 include a 7.5% increase in identical sales, a 5% increase in digital sales and a net income of $455 million (€419.39m) or $0.79 per share.

Overall the company saw a decrease of 0.1% on identical sales while digital shoppers’ spending habits remained steadfast with a 5% increase in 2021.

Net income was $1,620 million or $2.70 per share.

Albertsons received $17.4 billion from net sales and other revenue during the 12 weeks ended February 26, 2022 compared to $15.8 billion during the 12 weeks ended February 27, 2021.

The rise was driven by Albertsons’ 7.5% boost in identical sales and higher fuel sales with retail price inflation contributing t the identical sales increase.

Gross margin rate fell to 28.7% during the fourth quarter of fiscal 2021 compared to 28.9% during the previous year.

Albertsons latest quarterly report
Credit: Tara Clark / Unsplash

Excluding the impact of fuel, gross margin rate was flat compared to the fourth quarter of fiscal 2020.

This was mainly due to productivity initiatives, improved pharmacy margins related to administering Covid-19 vaccines and favourable product mix, offset by lower gross margin rates across certain product categories due to the rate impact of increased product costs, higher supply chain costs and an increase in LIFO expense, all driven by the current inflationary environment.

Albertsons selling and administrative expenses

Meanwhile selling and administrative expenses decreased to 24.9% of net sales and other revenue during the fourth quarter of fiscal 2021 compared to 30.0% of net sales and other revenue during the fourth quarter of fiscal 2020.

Excluding the impacts of fuel and the combined plan withdrawal, selling and administrative expenses as a percentage of net sales and other revenue decreased 30 basis points.

The fall in selling and administrative expenses was primarily related to lower expenses surrounding Covid-19 and the execution of productivity initiatives. These were offset by higher employee costs, depreciation and other expenses related to Albertsons’ investments in its digital and omnichannel capabilities and other strategic priorities.

Additional labour was used to support the increase in fresh sales, market-driven wage rate increases, incremental front-line associate appreciation pay and higher equity-based compensation expense. This led to an increase in employee costs.

Regarding interest expense, net was $108.0 million during the fourth quarter of fiscal 2021 compared to $113.1 million during the fourth quarter of fiscal 2020.

For other income, net was $47.5 million during the fourth quarter compared to $107.2 million the previous year. The decrease in other income is primarily attributable to lower unrealised gains on non-operating investments in the fourth quarter of fiscal 2021 compared to the fourth quarter of fiscal 2020.

Income tax expense was $148.7 million, representing a 24.6% effective tax rate, during the fourth quarter of fiscal 2021. Albertsons saw an income tax benefit of $64.1 million, representing a 30.8% effective tax rate, which was the result of the loss before income taxes. This was driven by the $607.2 million combined plan withdrawal charge during the fourth quarter of fiscal 2020.

Net income was $455.1 million or $0.79 per share during the fourth quarter of fiscal 2021, which included the $78.7 million or $0.14 per share gain, net of tax, related to the combined plan withdrawal.

While net loss was $144.2 million or $0.37 per share during the fourth quarter of fiscal 2020, which included the $449.4 million or $0.97 per share charge, net of tax, related to the combined plan withdrawal.

Adjusted net income was $436.8 million, or $0.75 per share, during the fourth quarter of fiscal 2021 compared to $347.2 million, or $0.60 per share, the previous year.


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