Kelly Cloonan
Albertsons has pulled its full-year outlook as it looks to establish a turnaround plan to shore up sluggish results.
The move came as the grocery store chain reported lower second-quarter profit and sales. Chief Executive Susan Morris said that while the results were in line with Albertsons' previous outlook, they don't reflect the company's potential.
Albertsons is now starting a review of its business to speed up improvements in its performance, and "tackle even harder a cost structure we can no longer afford," Morris said.
The company said it expects to provide a refreshed financial framework, both short and long term, alongside a comprehensive turnaround plan by its fourth-quarter earnings call. It said it would complete its business review in its fourth quarter, with plans to look at its customer strategy, cost structure, operating model, portfolio of banners, markets assets and businesses, as well as capital allocation priorities, in particular.
Albertsons had cut its initial fiscal-year view back in July, citing pressure on its core grocery business due to a more cautious consumer.
Second-quarter profit came in at $51.5 million, or 11 cents a share, compared with $168.5 million, or 30 cents a share, a year earlier.
Adjusted earnings per share were 36 cents, compared with analyst estimates of 33 cents, according to FactSet.
Revenue ticked down 0.1% to $18.89 billion, compared with analyst estimates of $18.87 billion.
Identical sales--which encompasses in-store revenue, and excludes fuel sales--fell 0.8%. Analysts had expected a 0.9% decline.
The results come after Albertsons filed a lawsuit against its top rival Kroger seeking at least $8 billion after their grocery megadeal failed two years ago.
Albertsons accused Kroger leaders of making "lowball offers" to federal regulators to largely keep the most-profitable stores in the combined company, and hive off the weaker-performing ones, according to a court filing unsealed Monday. Kroger said Albertsons' arguments are flawed, and that both companies knew the deal faced high regulatory scrutiny.