Here’s a plot twist nobody saw coming: Albertsons reported solid earnings, beat revenue estimates, and somehow managed to tank 8% anyway. Welcome to the grocery store drama nobody asked for.
The company posted fourth-quarter results that looked pretty decent on paper. Revenue hit $18.8 billion—beating the $18.6 billion estimate. Digital sales jumped 24%, loyalty members climbed 15% to 45.6 million, and same-store sales grew 2.3%. CEO Vivek Sankaran was basically doing a victory lap, talking about “positive momentum” and their “Customers for Life” strategy. Adjusted earnings came in at 46 cents per share, beating the 41-cent estimate. So… why did the stock get absolutely hammered?
The answer: outlook. Investors don’t care about yesterday’s wins—they care about tomorrow’s profits. And Albertsons’ 2025 forecast basically said “yeah, things are gonna be tougher.”
The company expects identical sales growth between 1.5% and 2.5%—below what analysts were hoping for. Adjusted EBITDA is projected at $3.8-$3.9 billion, down from $4.0 billion last year. And earnings per share guidance of $2.03-$2.16 falls short of both last year’s $2.34 and analyst expectations. That’s the kind of guidance that makes investors reach for the sell button.
Timing matters too. Incoming CEO Susan Morris takes over May 1st, replacing the retiring Vivek Sankaran. She’s inheriting a company that just watched its Kroger merger get nuked by the FTC in December—a deal that would’ve been a game-changer. Now Albertsons is suing Kroger, claiming they didn’t try hard enough to make the merger work. Fun times.
Morris is calling 2025 an “investment year,” which is corporate speak for “we’re spending money now, profits later.” Capital expenditures are projected at $1.7-$1.9 billion. But here’s the silver lining: she’s already promising that starting in 2026, they’ll drive growth consistent with their “long-term algorithm” of 2%+ identical sales growth. Translation: the pain is temporary.
One thing working in Albertsons’ favor? Tariffs. The company sources over 90% of products domestically, so they’re way less exposed than competitors getting hammered by import duties. They’ve even set up a task force to manage tariff impacts. Smart move.
So is this a buying opportunity? Maybe. The stock is trading at a P/E of 12 and forward P/E of 9—solid value territory. Analysts have set a $23.50 median price target, suggesting 18% upside from the post-earnings dip. As a consumer staple, Albertsons should hold up reasonably well in a choppy market. People still need groceries, even when the economy gets weird.
The real question: can Morris execute on that 2026 turnaround promise? If she can, today’s selloff looks like a gift. If she can’t, well, you’ll have plenty of company in the grocery store aisle wondering what went wrong.
