Albertsons Third-Quarter Results: What to Expect

Albertsons Cos. is scheduled to release its third-quarter financial results on Tuesday. Here's a preview of what to watch for:

Net Income

Analysts are expecting the Boise, Idaho-based grocery store chain to report a profit of $310.7 million, down from $375.5 million compared to the previous year.

Revenue

Albertsons' revenue for the quarter ended December 2 is projected to increase to $18.4 billion from $18.2 billion in the same period last year.

Adjusted Earnings

The consensus among analysts is that the company will achieve an adjusted profit of 65 cents per share.

During the quarter, Albertsons shares were down 7%, trading recently at $22.90.

Key Factors to Watch

Deflation Concerns

Food-sellers and retailers have sent mixed signals regarding deflation. Walmart CEO Doug McMillon warned of a potential period of deflation, while Kroger stated that they do not expect disinflation to lead to falling prices. Albertsons' results will provide insight into the direction of prices.

Consumer Pressure

In the previous quarter, Albertsons highlighted that consumers were feeling the pinch due to interest rates and reduced government assistance. The company attributed an increase in identical sales to retail price inflation. The upcoming results will indicate whether consumers responded positively during the holiday season.

Pharmacy Business Growth

While Albertsons' pharmacy business experienced strong growth in the second quarter, this sector typically operates with lower margins. Without the benefit of food inflation, the company may face additional margin declines, which could impact overall earnings.