By Sanskriti Shekhar
Oct 13 (Reuters) - Albertsons withdrew its fiscal 2026 forecasts on Tuesday as the grocer launched a broad review of its business aimed at cutting costs, lowering prices and reversing sluggish sales.
The company has been facing cautious consumer spending, particularly by lower-income shoppers, as food and fuel costs climb, as well as market share losses to mass retailers including Walmart, discount chains and private-label brands.
The review builds on a restructuring, announced
in July, and is expected to finish during the fourth quarter ending February 2027.
Albertsons plans to provide refreshed short- and long-term financial targets alongside a "comprehensive turnaround plan" by its fourth-quarter earnings call.
Executive Chair Meg Whitman said Albertsons' market-share trends had lagged and that despite individual successes across the business, the company was not delivering results consistent with the quality of its assets.
"We must turn things around," Whitman said on a post-earnings call, adding that the grocer needed to move faster to cut costs and reinvest much of those savings to lower prices and improve store experience.
Whitman, the former eBay and Hewlett-Packard CEO, was named Albertsons' executive chair last month in a newly created role aimed at helping the grocer "sharpen its strategy and strengthen execution."
CEO Susan Morris said Albertsons had accumulated too many initiatives, processes and layers of complexity over time, slowing the organization and increasing costs.
"Simply put, we're not satisfied with the results and the current trajectory of our business," she said.
The expanded turnaround effort comes nearly two years after Albertsons' proposed $24.6 billion merger with Kroger collapsed after a federal court blockedthe deal in December 2024 on antitrust grounds. Albertsons subsequently terminated the agreement.
Shares rose 2% on Tuesday, reversing premarket losses. They had fallen 27% this year as of last close.
In July, Albertsons outlined plans to expand private-label offerings and improve e-commerce, while restructuring its 11 divisions into four regions and centralizing merchandising. Albertsons now describes those changes as the first step in its broader turnaround.
"We'll exit areas that are underperforming," Morris said on Tuesday.
Albertsons had slashed its annual target prior quarter, forecast fiscal 2026 adjusted earnings per share in the range of $1.75 to $1.85 and said it expected annual identical sales to decline in the range of 0.5% to 1.5%.
Michael Gunther, an analyst at Consumer Edge, said that the research firm's credit and debit card data shows that "traditional supermarkets, including Albertsons, have continued losing grocery market share to specialty and discount format."
The grocer on Tuesday reported that its same-store sales in the second quarter ended September 12 fell 0.8%.
But it posted second-quarter adjusted profit of 36 cents per share, beating estimates of 33 cents per share, according to data compiled by LSEG.
(Reporting by Sanskriti Shekhar in Bengaluru; Editing by Sahal Muhammed)
