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Inflation is a boon to Albertson's inventory

The stock of grocery chain operator Albertsons (NYSE: ACI) hit an all-time high thanks to spike in food inflation.

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18, 2021

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This story originally appeared on MarketBeat

Operator of a grocery chain Albertsons (NYSE: ACI) The stock hit an all-time high thanks to spike in food inflation. The company is growing with five new stores and 33 modernized, remodeled projects. Albertsons also added 320 new Drive Up & Go (DUG) locations in the first quarter of 2021, bringing a total of 1,740 locations up 75% year over year. The goal is 1,950 locations by the end of the second quarter of 2021. The pandemic has forced Albertsons to use the digital channel, sustainable food trends and incorporate digital innovations that are paying off enormously. The company also expects to realize gross savings of $ 1.5 billion by the end of fiscal 2022. The pharmacy has given over six million COVID vaccinations. The rise in food inflation should increase margins in its 2,278 grocery and drug stores in 34 states and Washington DC under 20 different brands including Albertsons, Safeway, Vons, Shaw & # 39; s, Acme, Tom Thumb, Randalls, United Supermarkets, Carrs , Kings Food Markets and Balduccis. Prudent investors looking for exposure to capitalize on food inflation can look for opportunistic setbacks in Albertsons stock to gain a position.

Earnings release for the first quarter of 2021

On July 29, 2021, Kroger published the results of the first fiscal quarter 2021 for the quarter ending May 2021. The company reported earnings per share (EPS) of $ 0.89 excluding one-time items versus consensus analyst estimates for earnings of $ 0.61, a blow of $ 0.28. Revenue fell (-6.4%) YoY to $ 21.3 billion, beating analyst estimates of $ 20.51 million. Identical sales decreased (-10%) on a two year stack basis, identical sales growth was 16.5%. The ongoing digital sales level on a two year batch basis was 276% year over year. Vivek Sankaran, Albertsons CEO commented, “Our performance is clear evidence of the structural improvements we have made to our business, as well as our ability to maintain market share compared to pre-pandemic levels. We are closer to our customers than ever and are well positioned for continued success as we execute our strategic priorities and leverage our strengths in fresh private labels and our accelerated digital transformation. "

Upside instructions

Albertsons raised its full-year EPS forecast to $ 2.20-2.30, up from the previous forecast of $ 1.95-2.05 versus analysts' consensus estimates of $ 1.95 Dollar. The company sees identical sales in the range of (-5%) to (-6%) for the 2021 financial year, which corresponds to a two-year growth rate of 10.9% to 11.9% from 9.4% to 10.9% previously .

Take away conference calls

CEO Sankaran set the tone, "Our ID sales grew 16.5% on a two-year basis, and we continue to gain market share in annual groceries and MULO, which includes the majority of groceries, medicines, bulk, clubs and dollars, and military on a two year basis. Additionally, we achieved EBITDA of – Adjusted EBITDA of $ 1.3 billion and adjusted earnings per share of $ 0.89 per share, above our expectations. With over 200% growth in each quarter of FY2020, our digital initiatives continued to resonate with our customers and we have maintained the level of revenue we achieved last year, with digital revenue in the first quarter and a . The two-year growth in ID sales of 276% remained almost unchanged compared to the previous year. With all our options, we achieved 95% customer coverage with e-commerce and customer loyalty was strong. At the same time, we've seen an increase in in-store transactions compared to Q1 2020, and many of those incremental in-store shopping trips are focused on fresh ones. At the end of the first quarter of 2021, we had 3.6 times as many omnichannel households as we had two years ago in 2019. We found that when customers switched to omnichannel, they also increased their spend in our stores with net growth of 17% per household for the quarter and a total spend rate twice that of an in-store shopper. ”The company increased active customers by 13% with a retention rate of 94% year over year. “Remember, actively engaged customers have spent four times more on us. In summary, our strategy of building lasting customer relationships through a combination of digital engagement and engagement in business is driving our sales. Overall, our strategy focuses on four priorities: excellence in business, accelerating our digital and omnichannel capabilities, increasing productivity, and strengthening our talent and culture. "

ACI Opportunistic Pullback Levels

Using the rifle charts on the weekly and daily charts can provide a short-term perspective of the playing field for ACI stocks. The weekly rifle chart formed an explosive breakout that peaked at $ 30.37 Fibonacci (fib) level. The weekly 5-Period Moving Average (MA) is $ 23.23 with the Upper Bollinger Bands (BBs) at $ 27.01. The weekly 15-period MA increases to $ 20.85. The weekly stochastics increases by the 80 band. The uptrend on the daily rifle chart shows a rising 5 period MA at $ 28.37 with top BBs at $ 31.90. The daily Low market structure (MSL) Buy triggered above the $ 20.37 level. The daily 15-period MA is also rising as trailing support at $ 24.16. Prudent investors can look for opportunistic pullback levels at $ 26.44, $ 25.38, $ 25.03, $ 24.32, $ 22.81, and $ 21.55, respectively Keeping an eye out. The upward curves range from $ 32.29 fib all the way to $ 38.35 fib.

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