The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

This ranking evaluates how Fortune 500 companies are deploying AI, and how technology leaders value those investments relative to industry peers.

Fortune AIQ 50

The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500-2023-053-Albertsons

The Boise-based grocery giant, which owns Albertsons, Safeway, and Vons, fell one spot on this year’s list. 
<ul> 
 	<li>For the 2022 fiscal year, Albertsons earned $71.9 billion in revenue and net income of $1.6 billion.</li> 
 	<li>In October 2022 rival Kroger announced that it would buy Albertsons in a deal that values the company at more than $20 billion. Politicians and labor unions have pushed back against the proposed acquisition, arguing it will eliminate jobs, reduce wages, and raise food prices.</li> 
 	<li>The companies have said regulatory approval of the deal won’t happen until early 2024 and will likely require the sale or spinoff of hundreds of stores.</li> 
 	<li>A combined Kroger-Albertsons would earn $200 billion in revenue and operate 5,000 stores.</li> 
</ul>

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

F500 2022-Albertsons

The Idaho-based Albertsons grocery empire encompasses more than a quarter of a million employees and over 2,250 stores. The company owns popular grocery store chains such as Acme and Safeway, giving it the heft to compete with Fortune 500 mainstays Walmart and Kroger. In 2021, Albertsons named Sharon McCollam, a former Best Buy and Williams-Sonoma executive, as the company’s president and chief financial officer. Revenue and profits both rose sharply in its most recent fiscal year, as consumers continued to prioritize home cooking during the ongoing pandemic.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

G500 133 Albertsons

The grocer, based in Boise, Idaho, has more than 2,250 stores and more than 250,000 employees, making it the second-largest supermarket chain in North America, after Kroger. Albertsons rose three spots in the Fortune 500 over the past year, partially buoyed by COVID-19-fueled buying, as more consumers cooked and ate at home rather than at restaurants during the pandemic.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-52-Albertsons

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-174-Albertsons

Based in Boise, Idaho, Albertsons is the second-largest supermarket chain in North America after Kroger, with more than 2,200 stores and some 270,000 employees. The latter number has grown in recent months as the company has staffed up to meet the COVID-19-related spike in demand, hiring about 55,000 people since March. Albertsons had a strong spring as consumers turned to home cooking in the face of the pandemic; sales were up 34% on an annual basis in March and April. The company went public in June amid a tumultuous market, but so far investors seem satisfied with the grocer's performance, with the stock now hovering close to the IPO price of $16.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-055-Albertons

The privately held grocer, based in Boise, Idaho, has 2,200 stores and more than 250,000 employees, making it the second-largest supermarket chain in North America after Kroger. Earlier this year, Albertsons filed for an IPO, and despite the economic turmoil, it remains committed to going public. The timing certainly seems good: Profits almost tripled in its most recent fiscal year, reaching $466 million in the 53 weeks ending Feb. 29, up 256% year-over-year. Partially buoyed by COVID-19-fueled buying, March and April sales rose by 34% on an annual basis, and the company has hired 55,000 people since March.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

Key Financials (last Fiscal Year)

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Albertsons, through its subsidiaries, operates food and drug stores in the United States. The company’s food and drug retail stores offer grocery products, general merchandise, health and beauty care products, pharmacy products, fuel, and other items and services. It operates stores under various brand names, including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw’s, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Markets, and Balducci’s Food Lovers Market. In October 2022 Albertsons announced intentions to merge with Kroger in a $24.6 billion deal, but various unions and lawmakers mounted anticompetitive objections and the deal was ultimately blocked. Albertsons traces its roots back to 1860, the founding date of its Shaw’s brand; Albertsons currently operates as a subsidiary of Albertsons Investor Holdings LLC.

Q1 2027

Q4 2026

Q3 2025

Q1 2025

Q4 2025

Q3 2024

Albertsons (ACI): Company Profile, Stock Price, News, Rankings

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Albertsons

albertsons

Welcome to the Albertsons Company's Third Quarter 2024 Earnings Conference Call, and thank you for standing by. All participants will be in a listen only mode until the Q and A session. This call is being recorded. The call will last approximately 1 hour. I would like to hand the call over to Melissa Plaisance, SVP, Investor Relations, Treasury and Risk Management.

Good morning, and thank you for joining us for The Albertsons Company's Q3 2024 Earnings Conference Call. With me today from the company are Vivek Shankaran, our CEO and Sharon McCollum, our President and CFO. Today, Vivek will provide an update on what we have been working on since the merger was announced and give you an early view of our strategic priorities going forward. Then Sharon will provide an overview of our Q3 2024 financial results and fiscal 2024 outlook before handing it back over to Vivek for some closing remarks. After management comments, we will conduct a Q and A session.

I'd like to remind you that management may make statements during this call that are or could include forward looking statements within the meaning of the federal securities laws. Forward looking statements are not limited to historical facts, but contain information about future operating or financial performance. Forward looking statements are based on our current expectations and assumptions and involve risks and uncertainties that could cause actual results or events to be materially different from those anticipated. Additional information concerning factors that could cause actual results to differ materially from those in the forward looking statements are and will be contained from time to time in our SEC filings, including on Forms 10Q, 10 ks and 8 ks. Any forward looking statements we make today are only as of today's date, and we undertake no obligation to update or revise any such statements as a result of new information, future events or otherwise.

Please keep in mind that included in the financial statements and management's prepared remarks are certain non GAAP measures, and the historical financial information includes a reconciliation of net income to adjusted net income and adjusted EBITDA. And with that, I'll hand the call over to Vivek.

Thanks, Melissa. Good morning, everyone, and thanks for joining us today. First, let me say how wonderful it is to be back hosting all of you on today's call. While we are disappointed that the merger was terminated, we never stopped investing in our business or driving our customers for life strategy. I'd like to use my time with you today to provide an update on what we have been working on since the merger was announced and give you an early view of our strategic priorities moving forward.

Over the last 2 years, we have continued to drive and evolve 4 priorities: 1, driving customer growth and engagement through digital connection 2, enhancing the customer value proposition 3, modernizing capabilities through technology and 4, driving transformational productivity. To engage customers, we have continued to invest in growth through 4 digital platforms. These platforms are designed to drive increased sales, more deeply engage our most loyal customers, increase customer lifetime value and generate digital space and robust data for the Albertsons Media Collective. The first of these platforms is e commerce. We run our e commerce business out of our stores, so our inventory is close to our customers and we can offer full access to our merchandise assortment.

Our investments in e commerce have driven sales penetration to over 7% of grocery revenue, with our top performing market over 9%. This growth, which is higher in our 1st party versus our 3rd party business, has been driven by the development of new capabilities in our fully integrated mobile app and improvements in quality, speed and convenience of drive up and go and in home delivery. While we have grown this business significantly and faster than the market, it is still underpenetrated compared to industry benchmarks and is one of our biggest growth customer acquisition and customer retention opportunities. To capture these opportunities, we are rolling out a store based 5 star certification program to ensure we are delivering a consistent and elevated level of customer service as well as a series of targeted marketing initiatives to grow sales and penetration. The second of these digital growth platforms is loyalty.

Our loyalty program is integrated into our mobile app and is a key engagement tool for our business. It is the entry point for digital and personalized marketing and a primary contributor of data to our retail media collective. In April of 2024, we launched a simplified and enriched program to make it easier for our customers to earn points and redeem coupons, fuel and grocery rewards. For the first time, it also allows customers to simply redeem points for dollars off their grocery bill. Since the launch, we've seen more frequent engagement, higher retention and increased customer spend.

Going forward, we expect to continue to see increased adoption and we will leverage strategic partnerships to provide our members with even more ways to get rewarded. The 3rd of these digital platforms is pharmacy and health. Our investments in pharmacy have driven sales penetration to over 11% of total annual revenue. This penetration has been driven by industry leading core script growth, including GLP-1s, excellence in immunization and best in class service. It has also been driven by the integration of pharmacy offerings into our mobile app through the launch of sincerely Health.

Sincerely Health is a high engagement value added wellness and rewards platform with over 1,000,000 lives. Although the pharmacy business is financially dilutive, cross shoppers between grocery and pharmacy are exceptionally valuable customers, spending 3 times more and engaging across all service offerings. Going forward, we see Sincerely Health growing as a top loyalty driver and a catalyst for introducing immunization and pharmacist administered treatments. We also expect to capitalize on continued script and immunization growth from traditional pharmacy store closures. The 4th of these digital platforms is integration of the mobile app for use in our stores, which is supported by the excellence in store level execution.

When our customers are in our stores, we want them to engage with us digitally. To enable this, we launched an in store geo located mobile feature that delivers real time coupons, help shoppers locate products and plan meals and assist customers with their shopping lists. By the end of 2024, we expect over 8,000,000 of our customers to have used this in store feature. Going forward, we expect to see continued increases in customer utilization with this feature and are planning to launch additional capabilities to drive even deeper engagement over time. All these platforms working together are generating eyeballs, digital inventory and data for the Albertsons Media Collective or AMC, which we brought in house in fiscal 2022.

Since then, we have invested significantly in building industry leading technologies to deliver an easy to use, dynamic and transparent measurement platform, which is improving endemic and non endemic brand reach. We've also improved our ability to define shopper audiences, run targeted media campaigns, enhance product offerings and achieve parity in campaign measurement. With these capabilities, while on a small base, AMC is currently growing faster than the market. Looking forward, we will continue to invest in delivering consistent omni execution for brand campaigns across our digital and physical assets. In addition, we expect to build new partnerships that add even more eyeballs digital inventory and capabilities to our platform.

AMC continues to be one of the largest opportunities we have to fuel reinvestment into our business. I'll now discuss our initiatives to enhance our customer value proposition, which includes not only price, but also the ease of the value added services we provide to customers both in store and online. To date, loyalty memberships, digitally engaged customers, omni channel households and transaction counts are all growing because our customers for life strategy places the customer at the center of everything we do. So as our customers' needs for value evolve due to inflationary pressures, so are our strategies to address these needs. These strategies to drive better value for customers in addition to increasing total category growth include working with our vendor partners to strategically invest in price in certain categories and markets and increasing on brands penetration.

To deliver this, we will source products that customers trust and need at a better value to drive profitable unit growth and increase share of wallet from existing customers. In owned brands, we will also offer products at an attractive entry price point, so that customers always have an accessible alternative and more prominently feature existing owned brands offerings. Our 3rd priority is the modernization of our capabilities through technology. Our North Star has been to use technology in everything we do. Over the last few years, we have invested strategically to make technology the key enabler of all major future growth and productivity initiatives.

These investments include migration to the cloud, the launch of our end to end e commerce capabilities, the digitization of pharmacy and health, state of the art tools for pricing and promotion, the enablement of self checkout, co productivity tools to manage replenishment, shrink and labor, new supply chain systems and an industry leading retail media platform. These investments have created long term capabilities that will continue to allow us to accelerate the transformation of our operating model going forward. They also position us well to take advantage of the evolution of AI and machine learning to elevate our core business processes. The final priority is driving transformational productivity. We have continued to develop our productivity engine, designed to systematically improve the efficiency of our business and improve costs.

Over the next 3 years, we plan to deliver $1,500,000,000 in savings to invest in our customer value proposition and growth initiatives as well as to offset inflationary headwinds. To achieve this, we are leveraging our recent investments in technology and the latest innovations and business best practices to build industry leading capabilities and reduce costs. The first of these initiatives is leveraging our consolidated scale to buy goods for resale. The next is transforming our ways of working, including rebalancing our onshore and offshore activities. In our supply chain, we are continuing to make significant progress on automation and the rollout of our new warehouse management system or WMS.

By the end of 2025, we expect 30% of our distribution volume to be automated and our WMS to be fully implemented company wide. These supply chain initiatives improve in stock conditions, differentiate our fresh quality, lower our cost to serve and improve our end to end data analytics capabilities. And finally, in store operations, we are leveraging a more robust technology platform to drive enhanced efficiency, improved customer experience and deeper associate engagement. For example, we've implemented AI technologies that provide a prompt for missed scans, which is reducing inventory shrinkage and improving the customer and associate experience. We're also expanding the utilization of technology in our produce departments, which is driving increased sales, reduced inventory shrinkage, improved quality and enhanced labor productivity.

I will now hand it over to Sharon for an overview of our Q3 and an update on our 2024 financial outlook.

Thank you, Vivek, and good morning, everyone. It's great to be here with you today. We are pleased with our Q3 results and the operational benefits we are seeing from the investments we have made in our business. We are a stronger company today than pre merger and the initiatives that have driven these results affirm our confidence in our future. We delivered solid operating and financial performance during the quarter across all key metrics in an environment where the consumer remains cautious.

The financial highlights of the quarter included an identical sales increase of 2%, a digital sales increase of 23%, adjusted EBITDA of 1,065,000,000 dollars and adjusted EPS of $0.71 per share. Loyalty members increased 15% to $44,300,000 and we increased our quarterly dividend by 25% to $0.15 per share. I'll now provide additional color on the financial details that drove these results. The ID sales increase of 2% was primarily driven by a 13% increase in pharmacy and a 23% increase in digital sales. The digital sales increase was primarily driven by strong growth in first party sales fueled by continued innovation in our digital offerings and improved service levels.

Our Q3 2024 gross margin was 27.9%. Excluding fuel and LIFO expense, the gross margin decreased by 27 basis points compared to Q3 last year. Strong growth in pharmacy sales, which carries an overall lower gross margin rate and increases in picking and delivery costs related to the continued growth in our digital sales drove this decrease, but was partially offset by the benefits from our productivity initiatives. Our selling and administrative expense rate was 25.1% this quarter. Excluding fuel, the SG and A rate increased 6 basis points compared to last year.

This increase was primarily driven by merger related costs and an increase in occupancy related expenses, including third party store security services, partially offset by the leveraging of employee costs and benefits from our productivity initiatives. Interest expense decreased $7,000,000 to $109,000,000 during Q3 2024. This reduction was primarily driven by lower outstanding debt. Income tax expense in the 3rd quarter was $14,500,000 a 3.5 percent effective tax rate compared to 20.8 percent effective tax rate in Q3 last year. This decrease was primarily driven by the recognition of an $81,000,000 discrete state income tax benefit related to audit settlements.

Excluding this discrete benefit, the effective income tax rate would have been approximately 23%. And as mentioned in the highlights, Q3, twenty twenty four adjusted EBITDA was $1,065,000,000 compared to $1,107,000,000 last year and adjusted EPS was $0.71 per diluted share compared to $0.79 in Q3 'twenty three. Turning now to the Q3 balance sheet and cash flow. Capital expenditures of $494,000,000 were driven primarily by investments in the modernization of our store fleet and our digital and technology platforms. We also returned approximately $70,000,000 to our shareholders through common stock dividends.

Net debt leverage at the end of the Q3 was 1.9 times and the balance sheet remains strong. I'd now like to discuss our 2024 outlook. As we look forward to the balance of fiscal 2024, we do so with continued confidence in our customers for life strategy and our operational execution. We are engaging customers in our digital platforms, driving traffic to our stores and leveraging the investments we have made to drive efficiency in our operations. So with that is our backdrop and our Q3 results behind us.

ID sales are now expected in the range of 1.8% to 2% versus 1.8% to 2.2% and adjusted EBITDA in the increased range of $3,950,000,000 to 3,990,000,000 versus $3,090,000,000 to $3,980,000,000 This increase in adjusted EBITDA is driven by the ongoing benefits of increased productivity. We are also increasing our adjusted EPS range to $2.25 to $2.31 per diluted share to reflect the corresponding increase in adjusted EBITDA. Additionally, due to the $81,000,000 discrete state income tax benefit recognized this year in Q3, we expect our full year tax rate to be in the range of 15% to 16%. Our capital expenditures remain in the range of $1,800,000,000 to $1,900,000,000 Before I hand it back to Vivek for some closing comments, I would like to spend a minute on how we are thinking about capital allocation over the longer term. 1st and foremost, we will continue investing in our business to drive long term sustainable growth.

We also plan to maintain our quarterly dividend and seek to grow it over time, as demonstrated by the 25% increase that we declared this morning. And finally, we plan to opportunistically return excess cash to shareholders by repurchasing shares under our recently announced $2,000,000,000 share repurchase authorization. Our balance sheet is strong and it provides flexibility as we drive our business forward and seek to generate long term sustainable shareholder value. Consistent with our previous cadence, we will provide our outlook for fiscal 2025 and our Q4 conference call in April. I will now turn the call back over to Vivek for closing remarks.

Thank you, Sharon. As we look forward, we start this next chapter in strong financial condition with a track record of positive business performance. Over the last 2 years, we have invested heavily in our core business, developed new sources of revenue and strengthened our capabilities through the rollout of new technologies. We have retained our best talent and even added and strengthened talent in critical positions. Our customers for life strategy is working.

We've added loyalty members, digitally engaged customers, omni channel households and increased transaction counts. Our stores are operating more effectively and efficiently as our new technologies take hold. And we are proactively managing our costs. Our productivity programs both old and new are creating fuel for investments and are an offset to inflationary headwinds. We believe all of this puts us in a strong position to continue to transform the business and adapt to an ever changing consumer landscape.

We also know that we must elevate our performance to compete with the very best in our industry. We are energized by that challenge and see a path to doing so. We are confident in our ability to execute against these opportunities. We will share more of our long term plans at the end of the fiscal year. I would like to thank our 285,000 associates for their loyalty and dedication to our customers and communities.

We are so proud of the difference they make. In December, we published our latest Recipe For Change report and highlighted the role that our associates play in fighting food insecurity and helping reduce the impact of our operations in the environment. They are the ones who make all of this possible and I want to applaud them for their hard work and dedication. We will now take your questions.

Thank you. We will now be conducting a question and answer Our first questions come from the line of Ken Goldman with JPMorgan. Please proceed with your question.

Hi, good morning. Thank you. I wanted to ask about guidance and the adjustments that were made, particularly on the top line. It's great to see, of course, EPS and EBITDA, the outlook coming up. Could you talk a little bit about the decision to maybe trim the top line or the top end rather of IDs ex fuel?

What you're seeing as the Q4 started and any specifics around that? Thank you.

Hey, good morning, Ken. It's Vivek here. Ken, December has been kind of a little wonky in that our 4 week market share performance improved very materially in December. But what we're seeing, it looks like as the data is coming in, the food and beverage sector overall sequentially slowed down in December and it's tough to get back a Christmas holiday. So we're just reflecting that slowdown, which we experienced too.

So you believe it's more of a macro. I know you're not promising this, but just based on your data, more of a macro than a company specific pressure point?

That is correct, because the data we're seeing is food and beverage sector slowed down broadly. And there's a I recognize too that the calendar was different, Ken, right? We had a shorter window. And so and it was an important holiday, so it's really hard to recover it. So we just wanted to be cautious about that.

you for that. Of the $1,500,000,000 you're talking about in terms of efficiencies, do you have any kind of rough idea at this time how much of that will be reinvested versus drop to the bottom line?

Ken, we haven't provided an outlook on that and we'll be providing an outlook on 2025 in our Q4 conference call in April.

Thank you. Our next question comes from the line of John Heinbockel with Guggenheim Partners. Please proceed with your questions.

Hey, Vivek, I wanted to start with, when you think about all the new customers, right, that you've picked up over the last 2 years, How do you size or think about wallet share, right? Because they come on the system, their wallet share is not as high as households that have been around a while. How big is that opportunity? And how long does that take to move them up to where your more mature households are?

Hey, good morning, John. Great question. I think that's why we talk about the 4 different platforms that we have. And what we see is that when they engage in any one of those platforms, you might see, let's say, a 2x or 3x. When they engage in a second or third platform, that number goes up, right, maybe even 4x, 5x.

And our challenge then is first to get them engaged on any one of those platforms and then to get them on multiple platforms. And what we do know is that in each of these there's a certain ramp up curve, right? And I'm not going to give you the specifics on how what those ramps are, but we work very deliberately on these ramps. And that's why we're excited and we start with that notion of engaging people on these platforms because that drives share of wallet. What we need to do is to get more people into that, but also make sure that we maintain the base.

And that's some of the things that we're doing that we talked about correcting the value proposition and so on, so that we also maintain the base while getting them into these platforms. And that's going to be part of the planning that we bring, John, as we come back at the end of the fiscal.

Maybe as a follow-up to that, right? So if you think about food volumes, right? I think if we take pharmacy and inflation out, and this is not just for you, I think it's for others, food volumes are still in negative territory. When do you think that flips to positive? And then in your secular algo of 2% plus, what do you think the food volumes are?

Is it half that? Is it 1% or is it less or where does that shake out?

Typically, John, we've thought of that as maybe think of inflation as about at 1% to 1.25%. That's how we plan it. Think about 50 bps of food volume growth. That's the long term algorithm is how we think about. And then there are some share gains that come with it.

And the share gains come by doing the things that I talked about addressing your last question. But 50 bps would be kind of what would be typical food volumes in our country. It's hard to predict when we're going to get back to that. I think we're all trying to search for that answer.

Thank you. Our next questions come from the line of Edward Kelly with Wells Fargo. Please proceed with your questions.

Hi, good morning everyone and thanks for the update. I wanted to start with just a question around investment. I mean, it's good to hear the sizable productivity initiatives. I think there's been a little bit of concern that Albertsons might require more significant upfront investment coming out of deal break. The press release kind of suggests that productivity pays for investment.

But I'm just curious about the timing of that as we think about next year, because I think investors are maybe a little bit concerned around there being some near term pressure and maybe some mismatch of productivity and investment. Could you just maybe provide a little bit more color around how you're thinking about all of that?

Yes. Ed, consistent with the previous cadence that we've had, we're going to provide our outlook for fiscal 2025 in April and we'll be able to talk more about that. We're looking at the cadence of the productivity along with the investments and we will have a lot to share in April. Obviously, there's we need to see where we are at the end of the year, etcetera. So we're going to stay with that cadence at this point.

Yes. Annette, I'll just reinforce though that what investors should not be concerned about is that the investments that we've made in the company in building capabilities and ensuring that our assets are at their best, right? So we've done that. We talked to you about all the technologies that we put in there. We never throttled any of those.

In fact, in those investments, we just became more and more productive. We're getting more for every capital dollar we're putting in.

And then maybe just a follow-up. I mean, you have a lot of opportunity, whether it's the media, all of the cost saves, including central buying, private label, etcetera. How quickly do you think you can ramp those initiatives whereas they become a more meaningful contributor to the P and L?

They're all different and they'll go at different rates. So as an example, when we think about we talked about offshoring, onshoring, there are elements of that that can go quickly only because it's we are not we are late to that game. There's what's exciting is you go there and you see these companies that have established great capability. So there's aspects of it that will move quickly. And then there are aspects so some have put that in the we can move faster bucket.

In buying, there's aspects of what we can buy that we can move quickly. Some of those we want to move with caution because we also know companies who have done it and got it wrong. And so we want to make sure we move with caution. But I think you'll see if I was to simplify it, I think you'll see a steady drumbeat of productivity coming from all of these things over the timeframe that Sharon pointed out, 3 year timeframe.

Thank you. Our next question has come from the line of Rupesh Parikh with Oppenheimer. Please proceed with your question.

Good morning and thanks for taking my question. So going back to your earlier commentary about the industry slowed in December, just any thoughts in terms of what could be driving that slowdown?

Rupesh, honestly, I don't know. The only thing is different about December is that we had a much shorter window between the holidays, right? And that is a material especially in an environment where the consumer is being so cautious, consumers being price sensitive. I think we'll all know more as data comes out, but that's the only thing I can think of that could have contributed to it.

Great. And then maybe my follow-up question. So Sharon, just on the gross margin line. So we did see sequential improvement on gross margins, Q3 decline versus Q2. Just curious how you're thinking about it for Q4?

We haven't provided an outlook for Q4, but we are going to have the same drivers in the margin. We do expect growth in pharmacy sales and we absolutely expect to see continued momentum in our e commerce business. So both of those are going to create the same mix shift impacts. And when you look at what those were offset by, it was productivity. Our productivity engine continues to run well.

So I think that when you look at it, it's going to be similar. The other area that we're seeing benefits is shrink and we will continue to put initiatives forward. We've invested technology. We already we talked to you guys about that when we saw you a couple of weeks ago. And we expect that technology to pay dividends as it learns its AI technology and some of our self checkout and it continues to learn.

Thank you. Our next questions come from the line of Simeon Gutman with Morgan Stanley. Please proceed with your questions.

Hi, good morning, everyone. So in the last couple of years since we spoke, I wanted to hear about market share through your lens. You have better market level information than we do. And specifically excluding pharmacy, curious what your assessment is? Where do you stand?

Obviously, Vivek, you made the comment that you're aspiring to get stronger. I don't know if that's a market share comment or just an overall growth level. But can you assess where you are, especially where you landed through the Q3?

Yes. Simeon, good morning. When we think about market share, I'll tell you 2 things that are very, very clear to us. We have a mass retailer and a club retailer that are growing much faster than us. And no matter what anybody thinks they're real competitors to us, okay?

And we know that to win in the marketplace, we've got to compete with them. And until we compete with them, we can feel comfortable about market share in certain segments of our retail, but we've got to get to better performance to gain market share overall. And that's what I was reflecting on the notion of getting stronger is that we've got to accelerate our growth rates to compete with the very, very best in the industry, Simeon.

My follow-up, I want to talk about the volume growth and Vivek you mentioned we're not sure when we'll get there. In the I guess across the chain, you have information on pharmacy, especially GLP-one. Do you think there is a direct correlation between the GLP-one usage and then unit consumption? Is that part of the ingredients right now?

That could be, Simeon. It's just hard to the amount of growth we're seeing in GLP-1s and I think that you're seeing across the industry, it's hard for me having been in food and beverage now for 15 plus years to completely ignore that, because of the amount of reduction in calories that it has. And I always think about if 10% of the people eat 10% less, going back to the earlier question, instead of 50 bps of volume, that's 100 bps of negative volume, right? So it's hard for I can't conclude that it is a problem, but we are certainly looking at it.

Thank you. Our next questions come from the line of Mark Carter with UBS. Please proceed with your questions.

Good morning. Thanks so much for taking the questions. So to start another follow-up on pharmacy. Just when you look at that business overall, how much of it do you think is being driven in terms of the growth by sales capture from competitor closures versus your own initiatives? And then you talked about GLP-1s being a positive, just how its contribution trended relative to what you've seen in recent quarters?

Hey, good morning. Yes, so I think it's a combination of both. 1, during the 2 years of COVID, we spent a lot of energy getting our pharmacy entire pharmacy platform on our phone, so on the app. We made it really easy for people to schedule. They get constant updates.

We've launched this notion of this application called sincerely help, where you get into the world of pharmacy and it gives you so much more to navigate. So we want to make you stickier in the world of pharmacy and you're stickier on our app. So we've done a lot of things. Our execution in our stores is better. Our NPS is better.

So we've done a lot of things to elevate the experience in pharmacy. In addition, we are seeing a lot of competitive closure. So it's a combination of both that is getting customers into us. By the way, it's new customers to the franchise, but also a lot of customers who are just shopping grocery with us now engaging with pharmacy. So we have both of those.

With respect to GLP-1s, GLP-1 contributions are negative. So it's not I mean, they just it's growing. But again, the GLP-1 customer is an important customer, right? We over time, we imagine those economics will change, but it is negative.

Great. And then just looking when looking at your overall core grocery comp, are you seeing any shifts in performance by income cohort?

Not a whole lot. We serve a lot of different segments. We're not seeing anything material, from a change in the income cohorts. I think what we're seeing is that customers in a cautious environment tend to shop more retailers. And so we're seeing that across the board.

And so I think the monies are getting distributed differently from say a year ago or 2 years ago.

Great. Thanks so much guys and good luck.

Thank you. Our next questions come from the line of Leah Jordan with Goldman Sachs. Please proceed with your questions.

Good morning. Thank you for taking my question. First, Justine, if you could comment on how you view your store footprint today? I know you've opened some new stores and done remodels this year, but what other opportunities do you see for further optimization from

As we look forward, Leah, we think two things. I'll talk first about the opportunity. We have opened several stores this year and we have had some exceptionally strong store openings. And we are have increased our data analytics capability in real estate and we are really being able to identify markets where we work well and can drive a great experience for our customers. So there are some opening opportunities in markets.

I don't want to speak to which markets because it's very competitive, of course. On the other side of it, over the last several years from a rationalization of our footprint, I'm talking about general hygiene of the real estate portfolio, We have been unable in some ways to really do that during the merger period. So we will start seeing that. You'll see some more store openings. What we don't want is that read into an indication of some problem, but there could be more closures over the next couple of years than you've seen previously just because of hygiene.

Okay, great. That's helpful color. Thank you. And then for my follow-up, I just wanted to go back and dig into retail media a bit more. Just seeing if you could provide more detail on the opportunity you see there and just how you view your competitive position in the marketplace, recognizing some peers are a little bit further along?

And then just also more detail on how the when you think this could be a meaningful driver to profitability?

Julia, the Retail Media business, we took it in house in 2022. We've spent a lot of energy building the technology platform to do that. We are growing fast from a smaller base though. So we do think it will become very material in the next 3 year horizon. And the fact that we are starting later doesn't mean we cannot build a great business because we still have our customers in many of our markets.

We do have a strong presence. And our ability to provide our customer the clients, if I can call it, who are spending the money on a 360 solution, executing in stores executing digitally, I think will make a difference. So we're excited about it. We've got everything we need and now we're just focused on building the business, in the sense, selling the business rather than just building the platform to do the business.

And when you look at Vivek's prepared remarks, what we've been working on, what we've been building and where we're seeing success, it's within the growth in those 4 digital platforms. That is what was necessary in order to create the robust inventory that we need for the Albertsons Media Collective and we have invested heavily in those over the last several years, especially in the last 2 years. So we are now prepared to step up and to really be able to start capturing our fair share of that market.

Albertsons (ACI) Q3 2024 Earnings Call Transcript

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