BOISE, Idaho — Albertsons Cos. reported mixed second-quarter fiscal 2026 results, with declining sales and profits prompting the grocery retailer to accelerate turnaround efforts and launch a comprehensive business review aimed at improving performance and reducing costs.
For the quarter ended Sept. 12, Albertsons posted net sales and revenue of $18.9 billion, essentially flat compared with the prior year. Identical sales fell 0.8%, reflecting continued pressure on core grocery operations. However, digital sales increased 11%, while pharmacy remained a key growth driver despite ongoing challenges related to the Inflation Reduction Act.
Net income dropped sharply to $51.5 million, or $0.11 per share, compared with $168.5 million, or $0.30 per share, a year earlier. Adjusted net income totaled $179 million, or $0.36 per share, down from $248.4 million, while adjusted EBITDA declined to $784 million from $848.4 million last year.
Chief executive officer Susan Morris said the company's results were in line with its revised expectations but fell short of Albertsons' potential.
“We are launching a comprehensive business review to speed up improvements in Albertsons’ performance and tackle a cost structure we can no longer afford,” Morris said. The review will focus on simplifying operations, improving decision-making, reinvesting savings into customer value and enhancing shareholder returns.
Profitability was pressured by rising costs tied to digital fulfillment, higher shrink levels and sales deleveraging. Gross margin fell to 26.8% from 27.0% a year earlier, while selling and administrative expenses rose to 25.6% of sales. Albertsons said disciplined productivity and cost-management initiatives helped offset some inflationary expense pressures.
The company also recorded $42.4 million in property impairment and disposition losses, up significantly from $4.4 million in the prior-year period. Higher borrowing costs pushed net interest expense to $125 million, compared with $105.3 million last year.
Albertsons continued to invest in its business during the first 28 weeks of fiscal 2026, spending nearly $900 million on capital projects. Investments included 38 store remodels, seven new store openings and ongoing enhancements to digital and technology platforms.
The retailer also continued returning cash to shareholders, repurchasing 26 million shares worth $387.6 million during the first half of the year. Albertsons declared another quarterly dividend of $0.17 per share, payable Nov. 6.
As part of its turnaround strategy, Albertsons recently launched ACI Edge, a companywide operating realignment that consolidates its 11 divisions into four regions and centralizes center-store merchandising. The company views the restructuring as the first step in a broader effort to improve execution, sharpen competitiveness and drive long-term growth.
Given the ongoing review, Albertsons withdrew its fiscal 2026 guidance and said it will provide an updated financial outlook and turnaround plan following completion of the review during its fourth quarter. The company also plans to host an investor day in spring 2027.
