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Albertsons' Digital Sales Triple as Grocer Beats Wall Street's Forecast

By Rich Duprey – Oct 20, 2020 at 11:22AM

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The pandemic continues to cause consumers to cook more dinners at home.

Supermarket chain Albertsons (ACI 0.23%) saw revenue jump 11% to $15.76 billion in the second quarter as the coronavirus pandemic keeps consumers out of restaurants and in their own kitchens cooking dinner.

The recently public grocer said same-store sales soared 13.8% and its digital sales rocketed 243% higher from the year-ago period. Analysts had expected Albertsons to generate $15.6 billion in sales.

Woman in the produce aisle of a supermarket, with apples displayed in the foreground

Image source: Getty Images.

Express lane of growth

With more than 2,250 supermarkets in 34 states operating under various banners including Albertsons, Acme, and Safeway, Albertsons is the second-largest pure-play grocery specialist behind Kroger, which operates over 2,750 stores.

The chain continues to see the investments it made in its digital platform pay off, helped along by increased demand driven by the COVID-19 outbreak. Albertsons' momentum hasn't really eased up all that much from the first quarter, when sales were up 21% on a 26% increase in comps as digital sales surged 271%.

While the supermarket giant's stock is rallying this morning, shares are still modestly below the $16 offer price from its June IPO. The stock trades at a fraction of its sales and earnings growth rate, even though Albertsons' full-year earnings forecast of $2.75 to $2.85 per share is well ahead of Wall Street's $2.23-per-share consensus estimate.

Albertsons is confident in its financial stability, though, as it recently declared it would begin paying a quarterly dividend of $0.10 per share beginning in Q3.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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