Albertsons officials are expecting identical-store sales—which only recently turned positive—to continue growing in its new fiscal year.
The Boise, Idaho-based retailer said it is forecasting same-store sales growth of 1.5% to 2% in fiscal 2018, which began Feb. 25. Albertsons’ ID sales in fiscal 2017 declined by 1.3% overall, although the most recent fourth quarter saw a 0.6% comp increase.
Albertsons released its financials Wednesday, but had provided preliminary results previously in a federal filing related to its forthcoming merger with Rite Aid.
Albertsons' 2018 forecast does not include effects of that merger. In addition to the positive comps, the retailer expects improvements in operating income of approximately $280 million to $320 million resulting in adjusted EBITDA of approximately $2.7 billion, which will be sparked by improved ID sales; expanded digital, loyalty and private brand offerings; synergies from the Safeway acquisition; and other cost reductions.
In 2017, adjusted EBITDA was $2.4 billion. The company said its figures improved in the fourth quarter as it realized benefits of inflation and promotional spending.
“We are very encouraged by the trends in our business as we returned to positive identical-store sales and saw operating income and adjusted EBITDA improvements during the fourth quarter,” Chairman and CEO Bob Miller said in a statement. “We expect to continue the positive momentum into fiscal 2018 with identical-store sales growth, as we continue to build and expand our digital offerings to enhance loyalty in-store and online—including the recent announcement of a new digital marketplace, which is being launched to expand selection for our customers later this year.”
Albertsons said it anticipated making $1.2 billion in capital expenditures this year. That figure is down from more than $1.5 billion last year, when it used the funds for 20 new store openings, including five acquired stores, 166 remodels and continued investment in digital and e-commerce technology.
Albertsons posted sales of $59.9 billion in fiscal 2017, a 0.5% increase.