Albertsons Boasts E-Commerce Growth as it Heads Toward Rite Aid Merger

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Mon. July 16th, 2018 - by Robert Schaulis

BOISE, ID - Albertsons Companies reported significant growth in its burgeoning e-commerce business this week; as the retailer nears the summation of its blockbuster brick-and-mortar merger with Rite Aid, the company reported its first quarter fiscal 2018 results—with significant dividends coming from the company’s investments in e-commerce and its Own Brands.

Bob Miller, Chairman and CEO, Albertsons"We are pleased with our first quarter results as both identical sales and Adjusted EBITDA increased for the second consecutive quarter," said Bob Miller, Chairman and CEO, in a press release. "We continue to roll out unique options for our customers as we strive to differentiate through our best in class Own Brands and rapidly expanding e-commerce offerings. We are also reaffirming our fiscal 2018 guidance today and remain on track to deliver annual Adjusted EBITDA of $2.7 billion and complete the store conversions related to the Safeway integration by September, which we expect to allow us to further grow and enhance our operating performance."

Highlights from the quarter included:

  • Identical sales increase of 0.2%
  • Adjusted EBITDA of $815.8 million, an increase of $44.1 million or 5.7%
  • Gross profit margin, excluding fuel, improved 60 basis points
  • Fiscal 2018 outlook reaffirmed including 1.5% to 2.0% identical sales growth and Adjusted EBITDA of $2.7 billion
  • Expanded Own Brands to include over 400 new items
  • Increased Own Brands sales penetration by 56 basis points to 24.0%
  • E-commerce sales, including sales of Plated meal kits, grew 108%
  • Converted 243 stores; on track with the Safeway integration efforts, with all store conversions to be completed by September 2018.

Albertsons' E-Commerce is booming as the company heads towards its merger with Rite-Aid

Speaking specifically about the Rite Aid merger, President and COO Jim Donald said the company anticipates several billion dollars in synergies to take effect upon completion of the deal.

Jim Donald, President and Chief Operating Officer, Albertsons"We are also looking forward to our merger with Rite Aid," added Donald. "Together we will be a differentiated leader in Food, Health and Wellness. We expect to realize $375 million in annual run-rate cost synergies within three years, and have the opportunity to generate $3.6 billion in annual sales synergies to fuel our future growth."

Rite Aid stockholders have scheduled a meeting for August 9, 2018 to vote on the proposed merger—with some investors rallying to stop the deal.

Will Albertsons’ continue to thrive with the successful acquisition of Rite Aid? AndNowUKnow will continue to report.