(Reuters) -Albertsons raised its annual sales forecast after beating quarterly estimates on Tuesday, betting on steady demand for essentials at grocery stores and pharmacies as economic uncertainty squeezes household budgets.
Consumers, facing persistent inflationary pressures, have tightened their budgets and are sticking to necessities, such as grocery items and medicines, while avoiding higher-priced, non-essential purchases like electronics and apparel.
U.S. grocers, including Albertsons and Kroger, have gained an edge by attracting value-conscious shoppers with competitive pricing across a wide range of categories, at a time when the broader retail sector is undergoing a slump.
Albertsons’ identical sales for the quarter ended June 14 rose 2.8%, compared to a 1.4% increase a year ago, driven by strong growth in pharmacy sales.
The company expects annual identical sales to grow in the range of 2% to 2.75%, compared with its prior forecast of 1.5% to 2.5%.
However, shares of the company fell about 1% in premarket trading after it kept its fiscal 2025 adjusted profit outlook unchanged. Its stock has risen nearly 13% so far this year.
Several companies, including retail giant Walmart, have refrained from providing forecasts or pulled back in the light of rising tariff pressures.
The unpredictable trade policies of the Trump administration have increased pressure on businesses, disrupting their operations. Despite attempts to offset costs through price hikes, the uncertainty has further unsettled shoppers globally.
Albertsons posted quarterly sales of $24.88 billion, just ahead of analysts’ average estimate of $24.73 billion, as per data compiled by LSEG.
Its quarterly adjusted net income per share of 55 cents beat estimates of 53 cents per share.
The company’s gross margin rate decreased to 27.1% in the reported quarter, from 27.8% a year ago, due to increased investments in its customer value proposition as well as higher delivery and handling costs.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Tasim Zahid)
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