Updated 4 - US supermarket chain Albertsons withdraws annual performance outlook, accelerates business restructuring

Paragraph 15 adds analyst commentary

Sanskriti Shekhar

Reuters, October 13 - Albertsons (ACI.N) on Tuesday withdrew its fiscal 2026 performance forecast and launched a business review aimed at cutting costs, reducing prices, and reversing sluggish sales.

As food and fuel costs rise, the US supermarket chain has faced challenges with more cautious consumer spending, especially among low-income groups, while also ceding market share to Walmart WMT.O, discount chains, and private labels.

The business review builds on a restructuring plan announced in July and is expected to be completed in the fourth quarter ending February 2027.

At that time, Albertsons also plans to announce new short- and long-term financial targets and launch a “comprehensive turnaround plan.”

“We have to turn things around,” former eBay and HP CEO Meg Whitman said on the earnings call. She was appointed executive chair last month—a new position aimed at helping the grocer “optimize strategy and strengthen execution.”

She said the company needs to move faster with cost cuts, and most of the savings will be reinvested in lowering prices and improving store experience.

CEO Susan Morris said Albertsons has long accumulated too many initiatives, processes, and layers of complexity, which have slowed organizational operations and added costs.

“We are not satisfied with our current performance and business trajectory,” she said.

This expanded restructuring comes nearly two years after Albertsons’ $24.6 billion plan to merge with Kroger KR.N was blocked by a federal court (link) on anti-trust grounds. Albertsons subsequently terminated the deal.

On Tuesday, the company’s stock rose 2%, reversing pre-market declines. Year to date, its shares are down 27%.

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“They are struggling to compete on price because major retailers like Walmart use fresh groceries as a traffic driver, while relying on higher-margin segments like apparel to offset low-margin food sales,” said independent retail consultant Bruce Winder.

In July, Albertsons (link) outlined its plan to expand its private label portfolio and boost e-commerce, while restructuring its 11 business divisions into four regions and centralizing merchandising.

On Tuesday, Albertsons described these changes as the first step in its broader transformation plan.

“We will exit underperforming business areas,” Morris said Tuesday.

In July, Albertsons forecast its fiscal 2026 adjusted earnings per share in the range of $1.75 to $1.85, and after lowering annual targets, expected annual same-store sales to fall 0.5% to 1.5%.

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The supermarket chain on Tuesday reported a 0.8% decline in same-store sales for the second quarter ended September 12.

However, according to data compiled by LSEG, adjusted profit of $0.36 per share beat expectations of $0.33.

(To assist non-native English speakers, Reuters has automated the translation of its report into several other languages. Since automated translation may contain errors, or may not capture necessary context, Reuters does not guarantee the accuracy of the automated translation and provides it only for the convenience of readers. Reuters accepts no liability for any damage or loss caused by use of the automated translation feature.)