Albertsons reports steady Q3 gains as consumers focus on value

BOISE, Idaho — Albertsons Companies announced a 1.9% rise in net sales and other revenue to $19.1 billion for the third quarter of fiscal 2025, mainly fueled by strong pharmacy results and ongoing growth in digital channels, the company said Wednesday.

Same-store sales increased by 2.4% during the quarter ending November 29, 2025, although results were slightly muted by an estimated 10 to 20 basis points due to delays in SNAP benefit distribution caused by last autumn’s federal government shutdown. Digital sales grew by 21%, while loyalty membership rose 12% year over year to nearly 49.8 million members.

Chief executive officer Susan Morris said shoppers across income levels became increasingly price-conscious during the quarter, with even higher-income households paying closer attention to value.

“Lower-income customers are buying fewer items per trip and prioritizing essentials, while middle-income households that had been relatively resilient are beginning to trade down in certain categories,” Morris said during the company’s earnings call. Higher-income shoppers remained stable, she added, but showed heightened sensitivity to pricing and promotions.

In response, Albertsons expanded personalized promotions and loyalty programs while tightening cost controls. The company continues to invest in private brands and expects its own-brand share to increase from 25% to 30% over time. Morris also highlighted the growing role of artificial intelligence in shaping customer engagement, noting that the retailer’s “Ask AI” search tool, introduced in 2025, has led to a 10% increase in basket size among users.

Online sales penetration reached about 9.5% during the quarter. President and CFO Sharon McCollam said the company expects its e-commerce business to become profitable by the end of the current fiscal year, excluding retail media revenue from that estimate.

Looking ahead, Albertsons cautioned about short-term challenges stemming from Medicare drug price cuts under the Inflation Reduction Act, which took effect January 1, 2026. McCollam mentioned that these changes are expected to decrease identical sales by about two-thirds of a percentage point in the fourth quarter and by 16 to 18 basis points for the entire fiscal year.

As a result, the company narrowed its fiscal 2025 guidance, now projecting consistent sales growth of 2.2% to 2.5%, down from its previous range of 2.2% to 2.75%. Adjusted EBITDA is expected to be between $3.825 billion and $3.875 billion for the year.

Net income for the quarter was $293 million, or $0.55 per share, down from $401 million, or $0.69 per share, a year earlier. Adjusted net income was $390 million, or $0.72 per share, and adjusted EBITDA hit $1.04 billion.

Despite Morris's description of solid execution and ongoing progress in digital and technology investments, she reaffirmed that the company believes its shares remain undervalued. Albertsons stock has dropped more than 10% since the company reported second-quarter results in October and declined further after Wednesday’s earnings release.