Albertsons Companies Inc reported adjusted earnings of $0.36 per share for the second quarter of fiscal 2026, beating the analyst estimate of $0.33. Despite the earnings beat, shares traded higher Tuesday as management withdrew its fiscal year outlook amid a comprehensive business review.

Revenue and margin trends

Net sales and other revenue fell 0.1% year over year to $18.895 billion, slightly exceeding the consensus estimate of $18.867 billion. Identical sales declined 0.8%, while digital sales rose 11%. GAAP net income dropped to $51.5 million, or $0.11 per share, from $168.5 million, or $0.30 per share, in the prior year period. Adjusted net income declined to $179 million from $248.4 million.

Cost pressures and balance sheet

Gross margin narrowed to 26.8% from 27% a year earlier. Excluding fuel and LIFO expense, gross margin declined 17 bps due to higher digital fulfillment costs and inventory shrink. Selling and administrative expenses increased to 25.6% of revenue from 25.4%. The company recorded $42.4 million in property disposition and impairment losses, compared with $4.4 million a year earlier. Net interest expense rose to $125 million from $105.3 million due to higher average borrowings.

Total debt, including finance leases, reached $9.328 billion, while cash and cash equivalents stood at $282 million. The net debt ratio increased to 2.42 from 2.02 a year earlier.

Strategic review and leadership commentary

Albertsons withdrew its fiscal 2026 outlook as management conducts a comprehensive review covering pricing, customer strategy, costs, operations, store banners, assets, and capital allocation. As part of the ACI Edge initiative, the company consolidated 11 divisions into four regions and centralized center-store merchandising.

Executive Chair Meg Whitman stated that "dramatic improvement is needed now," acknowledging that sales growth, earnings, and market share have fallen short of expectations. She called for faster cost reductions, lower prices, and better store operations. CEO Susan Morris noted that lower-income consumers remain under pressure, seeking discounts and trading down to private-label brands.

What the numbers show

The divergence between the adjusted EPS beat and the sharp decline in GAAP net income highlights significant non-operational headwinds. While operational performance pressured margins, the $42.4 million in property disposition and impairment losses, up from $4.4 million a year earlier, contributed heavily to the drop in GAAP profitability. Additionally, the rise in the net debt ratio to 2.42 reflects increased leverage amidst rising interest expenses, signaling tighter financial flexibility as the company undertakes its turnaround plan.

Albertsons Companies (NYSE: ACI) appointed Cody Perdue as interim Chief Financial Officer, effective immediately. The move follows the retirement of Sharon McCollam, who previously served as President and CFO.

Perdue, currently Senior Vice President of Treasury, Investor Relations and Risk Management, will continue overseeing those functions while serving in the interim role. The company confirmed that the search for a permanent Chief Financial Officer is underway.

Transition details

McCollam will remain with Albertsons in an advisory capacity through the end of the fiscal year on February 27, 2027. This arrangement aims to support a seamless transition of financial leadership duties.

Susan Morris, CEO of Albertsons Companies, highlighted Perdue’s deep understanding of the company and his record in guiding financial strategy. She noted his experience across treasury, investor relations, financial reporting and risk management makes him well suited to lead the finance function during this period.

Leadership background

Perdue joined Albertsons in 2013 and has served as Senior Vice President of Treasury, Investor Relations and Risk Management since 2025. Prior to this role, he served as Group Vice President of Treasury and Investor Relations, alongside various finance and accounting leadership positions.

Before joining Albertsons, Perdue worked at Deloitte and Touche LLP. He holds a Master of Science in Accountancy from the University of Notre Dame and a Bachelor of Business Administration in Accounting from Boise State University.

Sharon McCollam described Perdue as a trusted partner to the leadership team, noting his central role in the company’s significant strategic and financial transactions. She emphasized his disciplined judgment and expressed confidence in working with him to ensure continuity.

The company operates 2,240 retail stores across 35 states and the District of Columbia under banners including Albertsons, Safeway and Vons.