Grocery retailer Albertsons (NYSE: ACI) reported Q2 CY2026 results beating Wall Street’s revenue expectations, but sales were flat year on year at $24.94 billion. Its non-GAAP profit of $0.42 per share was 22% below analysts’ consensus estimates.
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Albertsons (ACI) Q2 CY2026 Highlights:
- Revenue: $24.94 billion vs analyst estimates of $24.8 billion (flat year on year, 0.6% beat)
- Adjusted EPS: $0.42 vs analyst expectations of $0.54 (22% miss)
- Adjusted EBITDA: $1.01 billion vs analyst estimates of $1.08 billion (4.1% margin, 6.2% miss)
- Management lowered its full-year Adjusted EPS guidance to $1.80 at the midpoint, a 20.7% decrease
- EBITDA guidance for the full year is $3.59 billion at the midpoint, below analyst estimates of $3.89 billion
- Operating Margin: 1.1%, in line with the same quarter last year
- Free Cash Flow Margin: 0.8%, similar to the same quarter last year
- Locations: 2,240 at quarter end, down from 2,264 in the same quarter last year
- Same-Store Sales were flat year on year (2.8% in the same quarter last year)
- Market Capitalization: $7.15 billion
"In the first quarter, our digital and pharmacy businesses continued to deliver strong growth, while core grocery faced increasing pressure from softer industry unit trends and a more cautious consumer," said Susan Morris, Chief Executive Officer.
Company Overview
With over 20 well-known grocery banners spanning 34 states, Albertsons (NYSE: ACI) operates food and drug retail stores across the US, offering groceries, pharmacy services, and own-brand products under banners like Safeway, Jewel-Osco, and Vons.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years.
With $83.23 billion in revenue over the past 12 months, Albertsons is a behemoth in the consumer retail sector and benefits from economies of scale, giving it an edge in distribution. This also enables it to gain more leverage on its fixed costs than smaller competitors and the flexibility to offer lower prices. However, its scale is a double-edged sword because it’s harder to find incremental growth when you’ve penetrated most of the market. For Albertsons to boost its sales, it likely needs to adjust its prices or lean into foreign markets.
As you can see below, Albertsons grew its sales at a sluggish 2% compounded annual growth rate over the last three years as its store footprint remained unchanged and it barely increased sales at existing, established locations.
This quarter, Albertsons’s $24.94 billion of revenue was flat year on year but beat Wall Street’s estimates by 0.6%.
Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a slight deceleration versus the last three years. This projection is underwhelming and suggests its products will face some demand challenges.
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Store Performance
Number of Stores
The number of stores a retailer operates is a critical driver of how quickly company-level sales can grow.
Albertsons operated 2,240 locations in the latest quarter, and over the last two years, has kept its store count flat while other consumer retail businesses have opted for growth.
When a retailer keeps its store footprint steady, it usually means demand is stable and it’s focusing on operational efficiency to increase profitability.
Same-Store Sales
A company’s store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales gives us insight into this topic because it measures organic growth for a retailer’s e-commerce platform and brick-and-mortar shops that have existed for at least a year.
Albertsons’s demand within its existing locations has been relatively stable over the last two years but was below most retailers. On average, the company’s same-store sales have grown by 1.8% per year. Given its flat store base over the same period, this performance stems from a mixture of increased foot traffic at existing locations and higher e-commerce sales as demand shifts from in-store to online.
In the latest quarter, Albertsons’s year on year same-store sales were flat. This was a meaningful deceleration from its historical levels. We’ll be watching closely to see if Albertsons can reaccelerate growth.
Key Takeaways from Albertsons’s Q2 Results
It was good to see Albertsons narrowly top analysts’ revenue expectations this quarter. On the other hand, its full-year EBITDA guidance missed and its EBITDA fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 14.4% to $12.50 immediately following the results.
The latest quarter from Albertsons’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
