Albertsons earnings fell sharply in the second quarter of fiscal 2026, with net income dropping to $51.5 million from $168.5 million a year earlier. The grocery retailer announced the results on October 13, 2026, and withdrew its full-year outlook while it conducts a comprehensive business review.
Key Takeaways
- Quarterly net income fell 69.4%, while revenue declined just 0.1%.
- Digital sales grew 11%, but delivery costs and higher shrink weighed on gross margin.
- Management expects to present a turnaround plan and refreshed financial framework by its fourth-quarter earnings call.
Table of Contents
- Albertsons earnings reflect pressure beyond flat sales
- Digital growth brings additional fulfillment costs
- Business review leaves fiscal 2026 outlook on hold
- Conclusion
Albertsons earnings reflect pressure beyond flat sales
Albertsons’ second-quarter results announcement showed net sales and other revenue of $18.895 billion for the 12 weeks ended September 12, 2026, compared with $18.916 billion in the comparable period ended September 6, 2025. Identical sales, which include direct-to-consumer digital sales but exclude fuel, decreased 0.8%. Higher fuel sales partially offset that decline.
Gross margin narrowed to 26.8% from 27.0%. Selling and administrative expenses rose to 25.6% of revenue from 25.4%, although the company described the dollar amount as relatively flat. Lower identical sales increased the expense burden relative to revenue, while productivity savings offset inflationary pressures and increased merger-related litigation costs.
Other expenses also weighed on profitability. Net property-disposition and impairment losses rose to $42.4 million from $4.4 million, primarily reflecting retail-store impairments and equipment disposals. Net interest expense increased to $125.0 million from $105.3 million because of higher average outstanding borrowings.
The much steeper decline in profit than in revenue shows that sales weakness alone did not explain the result: narrower margins, property-related losses and higher financing costs all contributed.
| Item | Details |
|---|---|
| Reported quarterly EPS | $0.11, compared with $0.30 a year earlier |
| Adjusted quarterly EPS | $0.36, compared with $0.44 a year earlier; non-GAAP |
| Adjusted quarterly EBITDA | $784.0 million, compared with $848.4 million; non-GAAP |
| First 28 weeks net income | $136.2 million, compared with $404.9 million a year earlier |
| First 28 weeks capital expenditures | $899.6 million, including 38 completed remodels, seven new stores and digital investments |
Digital growth brings additional fulfillment costs
Digital sales increased 11%, and pharmacy sales continued to grow. Those gains did not prevent overall identical sales from declining.
Albertsons attributed part of the gross-margin pressure to higher delivery and handling costs associated with digital growth, as well as higher shrink. Improved pharmacy margins provided a partial offset. The results highlight an important distinction: online sales growth can support revenue while also adding fulfillment costs.
The retailer operated 2,240 stores across 35 states and the District of Columbia at quarter-end, under banners including Albertsons, Safeway and Vons. Its network also included 22 dedicated distribution centers and 19 manufacturing facilities.
Business review leaves fiscal 2026 outlook on hold
Chief Executive Officer Susan Morris said the quarter met expectations in the company’s revised outlook but did not reflect its potential. Management is reviewing customer strategy, costs, the operating model, its portfolio of banners and businesses, and capital allocation.
The review builds on ACI Edge, an operating realignment announced on July 23, 2026. That initiative consolidated 11 divisions into four regions and centralized center-store merchandising under one enterprise team.
Albertsons is no longer providing a fiscal 2026 outlook and said it would not issue an updated forecast until the review is completed during its fourth quarter. It expects to provide a refreshed short- and long-term financial framework alongside a comprehensive turnaround plan by its fourth-quarter earnings call, and plans an investor day in spring 2027.
Conclusion
The next substantive milestone is the business review’s outcome. Albertsons expects its fourth-quarter earnings call to bring a turnaround plan and refreshed financial framework, providing a clearer basis for assessing management’s priorities and spending plans.
Read More News
Disclaimer
This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.
