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Albertsons Cos. Inc. stock rose nearly 1% in Monday premarket trading after the grocer reported first-quarter earnings that beat expectations. This is Albertsons’ first earnings announcement since going public in June.
Albertsons Companies is a leading food and drug retailer in the United States. As of June 20, 2020, the Company operated 2,252 retail food and drug stores with 1,726 pharmacies, 402 associated fuel centres, 23 dedicated distribution centres and 20 manufacturing facilities. The Company operates stores across 34 states and the District of Columbia under 20 well-known banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen and Carrs. The Company is committed to helping people across the country live better lives by making a meaningful difference.
Since the beginning of fiscal 2020, the Company has experienced significant increases in product demand and overall basket size in stores and in our eCommerce business as customers responded to the circumstances around COVID-19.
Sales and other revenue increased 21.4% to $22.8 billion during the 16 weeks ended June 20, 2020 (“first quarter of fiscal 2020”) compared to $18.7 billion during the 16 weeks ended June 15, 2019 (“first quarter of fiscal 2019”). The increase was driven by the Company’s 26.5% increase in identical sales, partially offset by a reduction in sales related to store closures and lower fuel sales. Identical sales benefited from our 276% growth in digital sales and an increase in in-store sales, both largely driven by the COVID-19 pandemic.
Gross profit margin increased to 29.8% during the first quarter of fiscal 2020 compared to 28.0% during the first quarter of fiscal 2019. Excluding the impact of fuel, gross profit margin increased 80 basis points compared to the first quarter of fiscal 2019, primarily due to a reduction in shrink expense as a percent of sales.
Net income was $586.2 million during the first quarter of fiscal 2020 compared to net income of $49.0 million during the first quarter of fiscal 2019.
Adjusted EBITDA was $1,691.0 million, or 7.4% of sales, during the first quarter of fiscal 2020 compared to $876.8 million, or 4.7% of sales, during the first quarter of fiscal 2019.
On the technical front, the RSI is at 50.98% and suggests that the market can move in an upward direction. The current price is trading above all the moving averages.
Overall Bias is Positive and Short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion—ALBERTSONS COMPANIES—BUY at $15.63 Take Profit at $16.06 Stop Loss at $15.40