{"id":15599,"date":"2026-07-25T00:58:15","date_gmt":"2026-07-25T00:58:15","guid":{"rendered":"https:\/\/tradinginsightsdaily.com\/index.php\/2026\/07\/25\/albertsons-stock-in-hot-water-after-sobering-reveal\/"},"modified":"2026-07-25T00:58:15","modified_gmt":"2026-07-25T00:58:15","slug":"albertsons-stock-in-hot-water-after-sobering-reveal","status":"publish","type":"post","link":"https:\/\/tradinginsightsdaily.com\/index.php\/2026\/07\/25\/albertsons-stock-in-hot-water-after-sobering-reveal\/","title":{"rendered":"Albertsons stock in hot water after sobering reveal"},"content":{"rendered":"<p><strong>Albertsons Companies<\/strong> (<a href=\"https:\/\/www.thestreet.com\/quote\/ACI\" rel=\"nofollow\">ACI<\/a>) opened Thursday, July 23, at <strong>$12.50<\/strong>, more than $2 below Wednesday&#8217;s close of <strong>$14.60<\/strong>.\u00a0<\/p>\n<p>By midday, the stock traded near <strong>$11.38<\/strong>, <strong>down about 22%<\/strong> and sitting on a <strong>fresh 52-week low of<\/strong><strong>$11.02<\/strong>.<\/p>\n<p>Grocery stocks are supposed to be the boring ones. People eat in good times and bad, which is why the sector gets treated as a place to hide when the economy wobbles.<\/p>\n<p>Thursday broke that assumption.<\/p>\n<p>The company that runs Safeway, Vons, Jewel-Osco, and 19 other banners told investors its <strong>shoppers are pulling back<\/strong>, and it <strong>cut its profit forecast by roughly 21%<\/strong>.<\/p>\n<h2>What Albertsons actually reported in the first quarter<\/h2>\n<p>According to <a href=\"https:\/\/www.albertsonscompanies.com\/newsroom\/press-releases\/news-details\/2026\/Albertsons-Companies-Inc--Reports-First-Quarter-Fiscal-2026-Results\/default.aspx\">Albertsons<\/a>&#8216; earnings release, the company <strong>earned $84.7 million<\/strong>, or <strong>17 cents per share<\/strong>, in the 16 weeks that ended on <strong>June 20<\/strong>.\u00a0<\/p>\n<p>That&#8217;s <strong>down from $236.4 million and 41 cents<\/strong> a year earlier.<\/p>\n<p>Adjusted earnings came in at <strong>42 cents per share<\/strong> against <strong>55 cents<\/strong> last year.<\/p>\n<p>Revenue barely moved, <strong>rising 0.2% to $24.94 billion<\/strong>, and the increase came from <strong>fuel sales<\/strong> rather than groceries.<\/p>\n<p>Identical sales, which track stores open in both periods, <strong>fell 0.8%<\/strong>.<\/p>\n<p>That identical sales figure is the one that stung, because it means the <strong>same stores sold less food to the same shoppers<\/strong>.<\/p>\n<figure><figcaption>Albertsons said lower-income shoppers are trading down to private label and cheaper proteins, pressuring both units and basket sizes.<\/p>\n<p><a href=\"https:\/\/www.gettyimages.com\/detail\/2286862623\">Cheng Xin &amp;sol; Getty Images<\/a><\/p>\n<\/figcaption><\/figure>\n<h2>Why the guidance cut hit harder than the earnings miss<\/h2>\n<p>Albertsons now expects adjusted earnings of <strong>$1.75 to $1.85 per share<\/strong> for fiscal 2026, <strong>down from $2.22 to $2.32<\/strong>.<\/p>\n<p>The <strong>midpoint of $1.80<\/strong> lands <strong>well below the $2.27<\/strong> analysts had predicted, <a href=\"https:\/\/finance.yahoo.com\/markets\/stocks\/articles\/albertsons-tumbles-earnings-miss-slashed-121750413.html\">Yahoo Finance<\/a> reported.<\/p>\n<p>Adjusted EBITDA guidance dropped to a range of <strong>$3.55 billion to $3.625 billion<\/strong> from <strong>$3.85 billion to $3.925 billion<\/strong>.<\/p>\n<p>Identical sales guidance flipped from <strong>growth of 0% to 1%<\/strong> into a <strong>decline of 0.5% to 1.5%<\/strong>.<\/p>\n<p>A missed quarter is simply one bad report, but a guidance cut of this size tells investors the company expects the pressure to last through February.<\/p>\n<h2>The consumer signal buried in the numbers<\/h2>\n<p>Albertsons Chief Financial Officer <a href=\"https:\/\/www.albertsonscompanies.com\/investors\/governance\/board-of-directors\/person-details\/default.aspx?ItemId=5afec593-12d9-48e9-bada-b024a0c33dbc\">Sharon McCollam<\/a> gave the detail that matters most on the <a href=\"https:\/\/www.thestreet.com\/dictionary\/e\/earnings-call\" rel=\"nofollow\">earnings call<\/a>.<\/p>\n<p>She said the sales decline was sharpest among <strong>lower-income customers<\/strong>.\u00a0<\/p>\n<p>Albertsons saw weakness in both the number of items bought and the size of the basket, <a href=\"https:\/\/finance.yahoo.com\/markets\/stocks\/articles\/albertsons-companies-q1-earnings-call-150723368.html\">Yahoo Finance<\/a> reported.<\/p>\n<p><strong>More Retail Stocks:<\/strong><\/p>\n<ul>\n<li><a href=\"https:\/\/www.thestreet.com\/retail\/kroger-giant-eagle-deal-acquisition-stock-reaction\"><strong>Kroger just shook up the supermarket landscape<\/strong><\/a><\/li>\n<li><a href=\"https:\/\/www.thestreet.com\/retail\/kroger-stock-slide-reveals-bigger-grocery-problem\"><strong>Kroger stock slide reveals bigger grocery problem<\/strong><\/a><\/li>\n<li><a href=\"https:\/\/www.thestreet.com\/economy\/kraft-heinz-inflation-peak-bet-july-4-cookout\"><strong>Kraft Heinz bet inflation peaked, but your cookout bill disagrees<\/strong><\/a><\/li>\n<\/ul>\n<p>Chief Executive <a href=\"https:\/\/www.albertsonscompanies.com\/investors\/governance\/board-of-directors\/person-details\/default.aspx?ItemId=68edffb9-9cb0-4888-89c6-a79aaf70d7d7\">Susan Morris<\/a> added that those shoppers are moving to private label, value packaging, and cheaper proteins.\u00a0<\/p>\n<p>She also said Albertsons is losing them mainly to <strong>Walmart <\/strong>(<a href=\"https:\/\/www.thestreet.com\/quote\/WMT\" rel=\"nofollow\">WMT<\/a>), <strong>Amazon<\/strong> (<a href=\"https:\/\/www.thestreet.com\/quote\/AMZN\" rel=\"nofollow\">AMZN<\/a>), and <strong>Aldi<\/strong>.<\/p>\n<p>That is a <strong>market-share problem<\/strong> dressed up as a macro problem.<\/p>\n<p>Two adjustments soften the headline figure.\u00a0<\/p>\n<p>Pharmacy pricing tied to the <strong>Inflation Reduction Act<\/strong> cost about <strong>100 basis points<\/strong>, and <strong>egg <a href=\"https:\/\/www.thestreet.com\/dictionary\/d\/deflation\" rel=\"nofollow\">deflation<\/a><\/strong> cost another <strong>50 basis points<\/strong>.<\/p>\n<p>Strip those out, and identical sales <strong>rose about 0.7%<\/strong>.<\/p>\n<p>The stock still fell 22%, which tells you <a href=\"https:\/\/www.thestreet.com\/dictionary\/w\/wall-street\" rel=\"nofollow\">Wall Street<\/a> cared more about the trajectory than the adjustments.<\/p>\n<h2>Albertsons is rebuilding its operating structure mid-slump<\/h2>\n<p>Alongside the results, Albertsons announced <strong>ACI Edge<\/strong>, a restructuring that <strong>collapses 11 operating divisions into four regions<\/strong> covering California, the West, the South, and the East.<\/p>\n<p><strong>Center-store merchandising<\/strong>, which is the packaged goods that fill the middle aisles, moves under a <strong>single enterprise team<\/strong>.<\/p>\n<p align=\"center\"><strong><a href=\"https:\/\/www.thestreet.com\/retail\/kroger-quietly-makes-a-major-loyalty-program-change\">Related: Kroger changed its loyalty rewards program, but shoppers need to be wary<\/a><\/strong><\/p>\n<p>The company expects <strong>roughly $200 million<\/strong> in <strong>annual run-rate benefits<\/strong>, with most arriving in 2027 and <strong>about $50 million<\/strong><strong>in transition costs<\/strong> spread across two years.<\/p>\n<p>Morris said the savings will fund price investments rather than flow to the bottom line.<\/p>\n<p>She was also specific about what those investments are not.\u00a0<\/p>\n<p>Albertsons is <strong>not shifting to everyday low pricing<\/strong> and is <strong>not running broad discounts<\/strong>.<\/p>\n<p>Instead, the company is targeting particular markets and categories where shoppers compare prices closely.<\/p>\n<h2>The CFO exit that complicated the earnings release<\/h2>\n<p>Albertsons disclosed on the same day that McCollam, who joined in 2021 and serves as president and CFO, plans to retire later this year.<\/p>\n<p>Morris said Albertsons is searching for her successor and will consider both internal and external candidates.<\/p>\n<p>Announcing a turnaround plan, a guidance cut, and a CFO departure in one press release forces investors to consider all three at once. <strong>The market&#8217;s response was selling.<\/strong><\/p>\n<h2>What is actually working inside the business<\/h2>\n<p>The quarter was not entirely weak, and three areas grew.<\/p>\n<ul>\n<li><strong>Digital sales rose 13%<\/strong>, with digital penetration reaching nearly 10.5% of the business.<\/li>\n<li><strong>E-commerce <\/strong>turned profitable in the quarter, including both first-party and third-party operations.<\/li>\n<li><strong>Pharmacy<\/strong> is profitable on a stand-alone basis, with growth in scripts, immunizations, and clinical services.<\/li>\n<\/ul>\n<p><strong>Retail media revenue<\/strong> also grew, helped by new display placements and sponsored product listings inside AI-powered search.<\/p>\n<p>The catch is that e-commerce carries a <strong>lower gross margin rate<\/strong> than in-store grocery, so growth there dilutes company margins, even while adding profit dollars.\u00a0<\/p>\n<p>Gross margin <strong>fell to 26.6% from 27.1%<\/strong>, driven largely by <strong>delivery and handling costs<\/strong>.<\/p>\n<h2>Where Wall Street stood going into the report<\/h2>\n<p>Analysts were already cautious. Before Thursday, eight analysts carried an <a href=\"https:\/\/www.thestreet.com\/quote\/ACI\">average target<\/a> of <strong>$17.43<\/strong>.<\/p>\n<p>Morgan Stanley&#8217;s <a href=\"https:\/\/www.tipranks.com\/experts\/analysts\/simeon-gutman\">Simeon Gutman<\/a> held a <strong>sell rating<\/strong> with a <strong>$14 target<\/strong> as of July 16, while Telsey Advisory&#8217;s <a href=\"https:\/\/www.tipranks.com\/experts\/analysts\/joe-feldman\">Joe Feldman<\/a> maintained a <strong>buy<\/strong> with a <strong>$22 target<\/strong> on July 17.<\/p>\n<p><strong>JP Morgan<\/strong> trimmed its target to <strong>$20<\/strong><strong>from $22<\/strong> on June 30 while keeping an <strong>overweight rating<\/strong>, <a href=\"https:\/\/www.gurufocus.com\/news\/8939112\/aci-maintained-by-jp-morgan-price-target-lowered-to-2000\">GuruFocus<\/a> noted.<\/p>\n<p>Every one of those targets was set against guidance that no longer exists, so expect revisions in the coming days.<\/p>\n<h2>What investors should watch from here<\/h2>\n<p>ACI now trades <strong>below every published analyst target<\/strong>, including Morgan Stanley&#8217;s Street-low $14.\u00a0<\/p>\n<p>However, that does not make it cheap, because the earnings base underneath it just moved.<\/p>\n<h3><strong>4 things need to happen before the Albertsons bullish case works<\/strong>:<\/h3>\n<ul>\n<li>Identical sales turn positive on a reported basis, not just after adjusting for pharmacy and eggs.<\/li>\n<li>The $200 million in ACI Edge savings shows up on schedule in 2027.<\/li>\n<li>Price investments win back lower-income traffic, rather than simply lowering margins.<\/li>\n<li>A permanent CFO is named who can defend the new guidance.<\/li>\n<\/ul>\n<p>Albertsons will pay its next quarterly dividend of 17 cents per share on <strong>Aug. 7<\/strong>. The company also <strong>bought back<\/strong><strong>13.4 million shares for $226.5 million<\/strong> during the quarter, part of a <strong>$2.0 billion buyback plan<\/strong>.<\/p>\n<p>Those returns are funded from a shrinking profit base, and the <strong>net debt ratio<\/strong> has climbed to <strong>2.33 from 1.96<\/strong> a year ago.<\/p>\n<p>For shoppers, the price cuts Albertsons described should show up on shelves in specific categories over the coming months.\u00a0<\/p>\n<p>For investors, the next real test is the second-quarter report, when management has to show whether shoppers keep buying cheaper options or start spending normally again.<\/p>\n<p align=\"center\"><strong><a href=\"https:\/\/www.thestreet.com\/retail\/walmart-shares-its-quiet-plan-to-take-down-amazon\">Related: Amazon has one weakness Walmart is quietly using against it<\/a><\/strong><\/p>\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Albertsons Companies (ACI) opened Thursday, July 23, at $12.50, more than $2 below Wednesday&#8217;s close of $14.60.\u00a0 By midday, the stock traded near $11.38, down about 22% and sitting on a fresh 52-week low of$11.02. Grocery stocks are supposed to be the boring ones. People eat in good times and bad, which is why the <\/p>\n","protected":false},"author":1,"featured_media":15600,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[],"class_list":["post-15599","post","type-post","status-publish","format-standard","has-post-thumbnail","category-world-news"],"_links":{"self":[{"href":"https:\/\/tradinginsightsdaily.com\/index.php\/wp-json\/wp\/v2\/posts\/15599","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tradinginsightsdaily.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tradinginsightsdaily.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tradinginsightsdaily.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tradinginsightsdaily.com\/index.php\/wp-json\/wp\/v2\/comments?post=15599"}],"version-history":[{"count":0,"href":"https:\/\/tradinginsightsdaily.com\/index.php\/wp-json\/wp\/v2\/posts\/15599\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tradinginsightsdaily.com\/index.php\/wp-json\/wp\/v2\/media\/15600"}],"wp:attachment":[{"href":"https:\/\/tradinginsightsdaily.com\/index.php\/wp-json\/wp\/v2\/media?parent=15599"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tradinginsightsdaily.com\/index.php\/wp-json\/wp\/v2\/categories?post=15599"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tradinginsightsdaily.com\/index.php\/wp-json\/wp\/v2\/tags?post=15599"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}