Albertsons Companies, Inc. — Second Quarter Fiscal 2026 Earnings Summary

Financial Performance

• Net sales and other revenue decreased 0.1% to $18,894.7 million for the 12 weeks ended September 12, 2026, compared to $18,915.8 million in the prior year period.
• Identical sales decreased 0.8% year-over-year.
• Digital sales increased 11% year-over-year.
• Gross margin rate decreased to 26.8% in Q2 2026 from 27.0% in Q2 2025; excluding fuel and LIFO expense, the rate decreased 17 basis points.
• Selling and administrative expenses increased to 25.6% of net sales in Q2 2026 from 25.4% in Q2 2025; excluding fuel, this increased 38 basis points.
• Net income was $51.5 million ($0.11 per share) for Q2 2026, down from $168.5 million ($0.30 per share) in Q2 2025.
• Adjusted net income was $179.0 million ($0.36 per share) for Q2 2026, down from $248.4 million ($0.44 per share) in Q2 2025.
• Adjusted EBITDA was $784.0 million (4.1% of net sales) for Q2 2026, down from $848.4 million (4.5% of net sales) in Q2 2025.
• Interest expense, net increased to $125.0 million in Q2 2026 from $105.3 million in Q2 2025.
• Loss on property dispositions and impairment losses was $42.4 million in Q2 2026 compared to $4.4 million in Q2 2025.
• Cash and cash equivalents were $282.0 million as of September 12, 2026, compared to $198.6 million as of February 28, 2026.
• Total debt (including finance leases) was $9,328.2 million as of September 12, 2026, compared to $8,126.5 million as of September 6, 2025.
• Net debt ratio was 2.42 as of September 12, 2026, compared to 2.02 as of September 6, 2025.
• Net cash provided by operating activities was $1,210.3 million for the 28 weeks ended September 12, 2026, compared to $1,282.0 million in the prior year period.
• Capital expenditures were $899.6 million for the first 28 weeks of fiscal 2026.

Guidance and Future Outlook

• The Company is no longer providing a fiscal 2026 outlook and will not provide an updated outlook until the comprehensive business review is completed during the fourth quarter.
• Management expects to provide a refreshed financial framework, both short and long-term, alongside its comprehensive turnaround plan by the fourth quarter earnings call.
• The Company plans to host an investor day in Spring 2027.

Business Segments and Product Lines

• Pharmacy sales continued to grow despite ongoing Inflation Reduction Act (IRA) headwinds.
• Digital sales growth drove increases in delivery and handling costs.
• Improvements in pharmacy margins were primarily related to the impact of the IRA.
• The Company completed 38 remodels and opened seven new stores during the first 28 weeks of fiscal 2026.
• The Company operates 2,240 retail stores with 1,709 in-store pharmacies and 408 associated fuel centers as of September 12, 2026.

Market and Competitive Landscape

• The Company views the ACI Edge operating structure realignment as a step to strengthen competitiveness and create greater long-term shareholder value.
• The Company operates under 22 well-known banners across 35 states and the District of Columbia.

Risks and Challenges

• Risks include changes in macroeconomic conditions, food price inflation, fuel and commodity prices, and macroeconomic uncertainty.
• Potential impacts from shifts in consumer behavior, state and federal assistance programs, and wage rates.
• Challenges related to labor union negotiations, including pending contracts.
• Risks associated with the ability to execute on the turnaround strategy and operating structure realignment.
• Potential impacts from cyber incidents, supply chain challenges, and changes in tax laws or rates.
• Ongoing merger-related litigation costs.

Management Commentary and Tone

• CEO Susan Morris stated that while second quarter performance was in-line with revised expectations, results do not reflect the full potential of the Company.
• Management announced a comprehensive business review to speed up improvements, simplify the organization, and tackle a cost structure they can no longer afford.
• The review aims to improve decision-making, reinvest savings in customer value, and boost long-term shareholder returns.
• The Company views the ACI Edge realignment as the first step in a broader turnaround.

Other Key Points

• On July 23, 2026, the Company announced ACI Edge, consolidating 11 divisions into four regions and centralizing center-store merchandising under a single enterprise team.
• The Company paid a quarterly dividend of $0.17 per share on August 7, 2026, and announced a subsequent quarterly dividend of $0.17 per share to be paid on November 6, 2026.
• During the first 28 weeks of fiscal 2026, the Company repurchased 26.0 million shares of common stock for $387.6 million.
• The Company is reviewing its customer strategy, cost structure, operating model, portfolio of banners, market assets, businesses, and capital allocation priorities.
• A conference call was held on October 13, 2026, hosted by CEO Susan Morris and Interim CFO Cody Perdue.