Grocery giant Albertsons Companies Inc. tallied $24.3 billion in net sales and other revenue in its Q1 2024 earnings on Tuesday. The total beat predictions, rising less than 1% from the same period a year earlier as digital sales increased 23%.

The Boise, Idaho-based company reported an adjusted net income of $392 million for the first quarter, which ended June 15. Stores under the Albertsons Companies Inc. umbrella include:

• Safeway
• Albertsons
• Shaw’s
• ACME
• Jewel-Osco
• Randalls
• Vons

In total, the chain operates 2,269 retail food and drug stores with 1,725 pharmacies.

Albertsons is No. 24 in the Top 1000, Digital Commerce 360’s database ranking of North America’s leading retailers by online sales. It is classified as a Food & Beverage retailer. Digital Commerce 360 projects that Albertsons total web sales in 2024 will reach $5.52 billion.

Albertsons web sales by year

Albertsons Q1 earnings results

In a released statement, Albertsons CEO Vivek Sankara lauded the company’s performance. However, he also cautioned that there are potential impediments to earnings ahead.

“As we look ahead to the balance of fiscal 2024, we expect to see continuing headwinds related to investments in associate wages and benefits, an increasing mix of our pharmacy and digital businesses which carry lower margins, and the cycling of prior year food inflation,” Sankara said, adding that some of the turbulence will be offset by other actions the company is taking.

“We expect these headwinds to be partially offset by ongoing productivity initiatives,” Sankara said.

Albertsons Q1 earnings came just two days before the grocery agreed to pause its proposed merger with Kroger. Regulators are suing to block the $24.6 billion deal, which already led to the companies proposing a list of almost 600 stores that they would sell if the merger closes. Both companies agreed to an injunction, eliminating the need for another hearing before the case — which was filed in Colorado — proceeds to trial on Sept. 30.

Albertsons digital sales soared in Q1

The 23% growth in Albertsons online ordering business reflected ongoing investments it is making to build out capabilities.

“In the first quarter of fiscal 2024, we continued to invest in our Customers for Life strategy and the digital and omnichannel capabilities necessary to support it,” Sankaran said. “Our Customers for Life strategy is placing the customer at the center of everything we do, and we continued to drive strong year-over-year growth in loyalty members as we launched our new simplified ‘for U’ loyalty program.”

The loyalty program, rebranded recently as “for U,” offers a more streamlined experience and digital deals to reward customers.

In Albertsons’ fiscal first quarter, its growth occurred as the company expanded its network of grocery delivery partners to include Grubhub, in addition to Doordash and Instacart. Albertsons began revamping its digital strategy during the pandemic as more customers shifted their shopping online.

“Speed and convenience are becoming just as important as cost savings,” Chris Rupp, Albertsons chief customer and digital officer, told the U.S. Chamber of Commerce in 2022.

Kevin Dunn, vice president of retail and consumer packaged goods sales at Liveramp, a data collaboration platform, attributes earnings results at Albertsons to its robust customer data collection program.

“Albertsons positive quarterly earnings results are a testament to the power of first-party data,” Dunn said.

That data is used not only to identify what Albertsons customers want, but also to power its retail media network capabilities.

“Leveraging its media network, the Albertsons Media Collective, the retailer has built powerful, data-driven partnerships with its brands and suppliers that deliver the real-time insights needed to bridge the online and offline customer experience,” Dunn explained.

Other details

Albertsons explicitly highlighted risks related to the proposed merger with Kroger. Those risks include the “ability to close the transactions contemplated by the Merger Agreement, and the impact of the costs related to the Merger,” according to Albertsons. Other concerns mentioned were:

• “Erosion of consumer confidence”
• “Restrictions on our ability to operate”
• “Challenges in retaining and motivating our associates until the closing of the Merger”
• “Litigation related to the transactions contemplated by the Merger Agreement”

Additional first-quarter highlights include:

• Identical sales increased 1.4%.
• Loyalty members increased 15% to 41.4 million.
• Net income of $241 million, or $0.41 per share.
• Adjusted net income of $392 million, or $0.66 per share.
• Adjusted EBITDA of $1,184 million.
• Total net debt of $7.57 billion as of June 15, 2024.
• Net debt ratio of 1.81.

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