The grocer's identical-store sales fell 0.8% and reported profit dropped by more than two-thirds. Management suspended its 2026 forecast pending a business review that will cover banners, markets and assets, days before its $8 billion trial against Kroger.
Albertsons told investors on Tuesday that it would stop giving them a forecast. The stock went up.
The owner of Safeway, Jewel-Osco and Acme reported second-quarter identical-store sales down 0.8%, while digital sales grew 11%. Net sales and other revenue slipped 0.1% to $18.89 billion. Adjusted earnings were 36 cents a share, down from 44 cents a year earlier but above the roughly 33 cents analysts had expected. Net income fell to $52 million, or 11 cents a share, from $169 million.
The company withdrew its fiscal 2026 outlook and said it will not issue a new one until a comprehensive business review is completed in the fourth quarter. It plans to present a refreshed financial framework and turnaround plan by its fourth-quarter earnings call and hold an investor day in spring 2027.
Shares were up about 2.9% at $12.91 in early afternoon trading.
The review
Chief Executive Susan Morris said the results "do not reflect the potential of the Company." The review, she said, will "tackle even harder a cost structure we can no longer afford."
Its scope reaches beyond costs. "We must also take a close look at our portfolio of banners, markets, assets and businesses, as well as potential strategic actions we can take to enhance shareholder value," Executive Chair Meg Whitman told analysts. She also said "everything should be on the table."
Ms. Whitman, who ran eBay and later Hewlett-Packard, took the chair's seat at Albertsons in September.
Pressure on the business
The quarter showed where costs are rising. Gross margin narrowed to 26.8% from 27.0%, as delivery costs for online orders and shrink increased. Interest expense rose to $125 million from $105 million on higher borrowings. Adjusted EBITDA fell to $784 million from $848 million. The company also booked $42 million of impairment and disposal losses, mostly on stores, and its expenses included higher costs from merger-related litigation.
Ms. Morris described a strained shopper. "The reality right now is that the economy is tough for many of our customers," she said. Her plan pairs lower overhead at headquarters with price cuts in the aisles.
Market implications
One reading is that investors welcome the possibility of asset sales or a breakup. A portfolio review led by an executive chair with a dealmaking background opens options a status-quo plan did not, and the stock trades near $13.
A second reading is that withdrawing guidance removes a floor. Same-store sales are falling, margins and adjusted profit are shrinking, borrowing costs are rising, and investors will have no company forecast for several months.
What to watch
The Delaware trial over the collapsed Kroger merger, in which Albertsons is seeking more than $8 billion in damages, is set to open Oct. 19. The outcome of the business review, due by the fourth-quarter report, will show whether any banners or assets are put up for sale.