ACI earnings analysis
What we found in ACI's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Albertsons delivered essentially flat first-quarter revenue of $24.942B, but identical sales declined 0.8% and GAAP diluted EPS fell from $0.41 to $0.17. Gross margin contracted to 26.6% and operating margin to 1.0%, reflecting digital fulfillment and fuel costs, customer-value investments, and higher S&A expenses; adjusted EBITDA fell 8.8% to $1.013B. Liquidity and calculated free cash flow improved, but debt increased to $9.163B and the company retains a $773.8M recorded opioid-settlement liability subject to unresolved final terms.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue held nearly flat on fuel and pharmacy
- Revenue increased $60.8M, or 0.2%, to $24.942B. Fuel revenue rose $234.0M and pharmacy rose $149.0M, offsetting declines of $266.0M in non-perishables and $103.7M in fresh.
- Digital growth offsets weaker core demand
- Digital sales grew 13%, while identical sales excluding fuel declined 0.8%, compared with 2.8% growth in the prior-year period. Management is accelerating targeted value investments to improve traffic, units and loyalty.
- Free cash flow improved despite investment
- Operating cash flow was $728.9M and capex was $522.1M, yielding calculated free cash flow of $206.8M, up from $169.8M a year earlier. Capex equaled 2.1% of $24.942B revenue and funded 15 remodels, four openings, and digital/technology investments.
- Liquidity increased and ABL capacity remains ample
- Cash and equivalents increased $94.8M from $198.6M at February 28 to $293.4M at June 20. The company reported $3.287B of ABL availability net of letters of credit and said it has significant cash sources for the next 12 months.
- Shareholder returns continued
- The board increased the quarterly dividend 13% to $0.17 per share. During the quarter, Albertsons returned $84.0M in dividends and repurchased 13.4M shares for $226.5M; $1.864B remained under authorization at June 20.
- Operating realignment targets execution gains
- ACI Edge consolidated 11 divisions into four regions and centralized center-store merchandising. Management expects the realignment and technology-enabled tools to improve enterprise consistency and execution.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Sharp margin and earnings compression
- GAAP operating income fell $185.7M to $263.6M and operating margin contracted 80 basis points to 1.0%. Gross margin declined 50 basis points to 26.6%, driven by digital delivery/handling costs and higher fuel costs, while selling and administrative expense rose 20 basis points to 25.6%.
- Profitability declined materially
- GAAP diluted EPS declined from $0.41 to $0.17 and net income dropped $151.7M to $84.7M. Adjusted EBITDA decreased $97.8M to $1.013B, with margin declining from 4.5% to 4.1%.
- Borrowing and interest burden increased
- Total debt increased $216.2M from $8.947B to $9.163B, including a $275.0M increase in ABL borrowings to $700.0M; net interest expense rose $24.9M to $166.7M. Current liabilities exceeded current assets by $1.289B at June 20, versus $1.108B at February 28.
- Large unresolved opioid-settlement exposure
- The opioid settlement framework contemplates up to $655.1M for participating states and subdivisions, $21.7M for tribes, and about $97.0M of fees and costs. Albertsons has recorded a $773.8M liability, including $273.1M current and $500.7M long-term, but says actual losses could differ materially and the framework is not final.
- Working-capital use and weaker operating cash flow
- Receivables rose $99.3M to $1.032B and inventories increased $18.7M to $5.193B since February 28. Cash flow from operations fell $25.5M year over year to $728.9M, principally from lower Adjusted EBITDA, higher interest paid, and higher merger-related and transformation costs.
- No formal risk-factor update; demand headwinds persist
- Item 1A states there were no material changes to risk factors from the February 28, 2026 10-K. However, the filing identifies a 0.8% identical-sales decline and notes pressure from value-conscious consumers, IRA headwinds in pharmacy, wage/union negotiations, tariffs, and competitive conditions.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.17
- Gross margin
- 26.6%
- Operating margin
- 1.0%
- Segment
- Single Retail reportable segment: retail sales $24.680B, up $35.2M year over year
- Segment
- Other revenue: $262.0M, up $25.6M year over year
- Segment
- Product revenue—Non-perishables: $11.876B, down $266.0M; Fresh: $7.883B, down $103.7M; Pharmacy: $3.304B, up $149.0M; Fuel: $1.464B, up $234.0M; Other: $414.9M, up $47.5M
What they said about what is next.
The 10-Q contains no explicit quantitative earnings or revenue outlook. Management says it expects ACI Edge to improve consistency and execution, and anticipates an additional $18.5M of pension/post-retirement contributions during the remainder of fiscal 2026; numeric outlook was deferred outside this filing.
The filing reads worse than the one before it.
What came before.
- 10-K · April 27, 2026
- Albertsons positions itself as a large, omnichannel U.S. food retailer executing a digital-first strategy built on four platforms (eCommerce, Loyalty, Pharmacy & Health and mobile app) and AI-enabled supply-chain and…
- 10-Q · January 7, 2026
- Albertsons reported Q3 net sales of $19,123.7 million, up $349.2 million versus the prior-year quarter, while diluted net income attributable to Class A common shareholders fell to $293.3 million (diluted EPS $0.55)…
- 10-K · April 21, 2025
- Albertsons positions itself as a large, locally-anchored national grocer with scale advantages (2,270 stores, #1/#2 share in 66% of 122 MSAs) and an omnichannel strategy (Drive Up & Go and delivery in >2,200 stores and…
- 10-Q · January 9, 2024
- Albertsons reported quarterly net sales of $18,557.3 million, up $402.4 million (+2.2%) versus the prior-year 12 weeks, with gross margin rising to $5,197.3 million. Operating income and net income were slightly down to…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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