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Albertsons Companies Inc Class A - Stock Quote ACI

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Morningstar's Albertsons Companies Inc Class A Stock Analysis

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Is it the right time to buy or sell?

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Albertsons Should Manage Through Inflation Successfully, but Competition Limits Long-Term Margins

Zain Akbari, CFA Equity Analyst

Business Strategy and Outlook

| Zain Akbari, CFA |

Although the pandemic has provided a financial respite, we remain convinced that the long-term environment for the grocery sector will feature intense price competition, high customer expectations, and more costly fulfillment (particularly delivery). With Walmart battling Amazon for national supremacy, traditional grocery leader Kroger building a highly automated delivery fulfillment network with Ocado, and the hard discounters boosting their presence, we believe Albertsons will be hard-pressed to defend its returns on invested capital (14% on average in fiscal 2020-21, but only 7% on average in fiscal 2018-19; includes goodwill).

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Albertsons Companies Inc Class A's Company Profile

Business Description

Albertsons is the second-largest traditional grocer in America, operating 2,276 stores under 24 banners in 34 states (as of the end of fiscal 2021). Around 75% of stores have pharmacies, while nearly 20% also sell fuel. Albertsons has a significant private-label operation, accounting for around 20% of sales (excluding fuel). While its own brand assortment is mainly manufactured by third parties, Albertsons operates 20 food production plants (as of the end of fiscal 2021). Albertsons is a top-two grocer in two thirds of its major markets (as of early 2022, according to company data), and virtually all of its sales come from the United States.

250 Parkcenter Boulevard
Boise, ID, 83706
T +1 208 395-6200
Sector Consumer Defensive
Industry Grocery Stores
Most Recent Earnings Feb 28, 2022
Fiscal Year End Feb 25, 2023
Stock Type Classic Growth
Employees 290,000