Albertsons warns of softer grocery demand as consumers pull back

close video Louis Navellier predicts a 'good' upcoming quarter Louis Navellier provides his analysis on current market trends, including semiconductor and big tech performance, Q2 earnings expectations, the Fed's approach to inflation and interest rates, and investment opportunities in energy and materials. Albertsons lowered its fiscal 2026 sales and earnings outlook Thursday after weaker grocery demand and a more cautious consumer weighed on its first-quarter performance. The grocery chain now expects identical sales to decline between 0.5% and 1.5% for the full fiscal year, compared with its previous forecast of flat sales to 1% growth. Albertsons also cut its adjusted earnings forecast to between $1.75 and $1.85 per share, down from its prior range of $2.22 to $2.32. Adjusted EBITDA is now expected to range from $3.55 billion to $3.625 billion, compared with its earlier forecast of $3.85 billion to $3.925 billion. Identical sales fell 0.8% during the quarter ended June 20, while net sales and other revenue edged up 0.2% to $24.94 billion, helped by higher fuel sales. Digital sales increased 13%, although the company said its core grocery business faced mounting pressure from softer industry unit trends. MAJOR GROCERY CHAIN BEATS WALMART, ALDI IN PRICE WAR AS SHOPPERS HUNT FOR CHECKOUT RELIEF The grocery chain now expects identical sales to decline between 0.5% and 1.5% for the full fiscal year. (Ethan Miller/Getty Images) "In the first quarter, our digital and pharmacy businesses continued to deliver strong growth, while core grocery faced increasing pressure from softer industry unit trends and a more cautious consumer," CEO Susan Morris said in the company’s earnings release. Albertsons said it is accelerating investments aimed at strengthening its customer value proposition and improving the shopping experience before anticipated productivity benefits take hold. "We are choosing to accelerate investments in our customer value proposition and the customer experience ahead of expected productivity benefits because we believe these actions will improve our growth trajectory, strengthen our competitive position, and create long-term shareholder value," Morris said. Ticker Security Last Change Change % ACI ALBERTSONS COS INC 11.44 -3.16 -21.64% As part of that effort, Albertsons announced an operating realignment called ACI Edge. The company consolidated its 11 divisions into four regions and placed center-store merchandising under a single enterprise team. Albertsons said the restructuring is intended to accelerate decision-making, improve local execution and bring category management, supplier relationships and merchandising strategy under a more centralized structure. First-quarter net income fell to $84.7 million, or 17 cents per share, from $236.4 million, or 41 cents per share, a year earlier. Adjusted earnings declined to 42 cents per share from 55 cents. Albertsons also announced an operating realignment called ACI Edge. (Bridget Bennett/Bloomberg via Getty Images) Gross margin narrowed to 26.6% from 27.1%. Albertsons attributed some of the pressure to higher delivery and handling expenses associated with digital growth, along with higher fuel costs. Separately, Albertsons said Chief Financial Officer Sharon McCollam plans to retire later this year. McCollam will remain in her current role until a successor is named and will then serve in an advisory capacity through Feb. 27, 2027, to assist with the transition. CLICK HERE TO GET FOX BUSINESS ON THE GO Albertsons operated 2,240 stores across 35 states and the District of Columbia as of June 20.