Albertsons Slashes Full-Year Forecast as Cautious Consumers Cut Spending; Shares Plunge

Albertsons Companies (ACI) sharply cut its full-year sales and profit forecasts on Thursday, signaling that persistent inflation is forcing consumers to pull back on spending. The grocer’s revised outlook prompted a significant sell-off, with its shares tumbling 20% in premarket trading.

Revised Annual Guidance

The company announced a substantial downgrade to its financial expectations for the year, reflecting a more challenging operating environment. The new guidance points to a contraction in key performance metrics.

• Identical Sales: Now projected to decline between 0.5% and 1.5%, a stark reversal from the previous forecast of flat to 1% growth.
• Adjusted Earnings Per Share (EPS): Expected to land in a range of $1.75 to $1.85, down from the prior target of $2.22 to $2.32.

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Consumer Headwinds

Albertsons attributed the lowered forecast to a clear shift in shopper behavior. In a statement, CEO Susan Morris said that while the digital and pharmacy businesses remained steady, the company's "core grocery faced increasing pressure from softer industry unit trends and a more cautious consumer."

This trend highlights the impact of sustained high food and gas prices on household budgets. Consumers, particularly in the middle- and lower-income brackets, are increasingly "trading down" by opting for cheaper brands and shifting their shopping to discount grocers like Aldi and mass retailers such as Walmart. This dynamic is squeezing sales and margins for traditional supermarkets like Albertsons.