Large pension payments lead to losses for Albertsons.Pandemic relief money for rescue

In the most recent quarter to February 27, pandemic spending boosted Albertsons sales again.

Same-store sales increased 11.8% from $ 15.4 billion in the year-ago quarter to $ 15.8 billion, surpassing the company’s 10.6% growth forecast for the fourth quarter of fiscal year 2020-21.

Still, Albertsons’ share price fell 4.9% to $ 18.24 on Monday after the company reported a net loss of $ 144.2 million. This loss was due to a $ 449.4 million payment to the company’s pension plan. Without payment, Albertsons posted a quarterly net profit of $ 347 million, up from $ 194 million in the previous year.

The company’s chief financial officer, Bob Diamond, said that of Albertsons’ $ 4.7 billion underfunding multi-employee program, more than 90% of Albertsons’ share is the latest federal coronavirus rescue package. He said he thinks it will be covered by.

CEO Vivek Sankaran said the company’s performance is positive, but growth could slow after the coronavirus pandemic is over.

“By the end of 2020, about 11 million households have shopped in stores since 2019, which gives us an idea of ​​the categories we buy for the first time and how often we return to buybacks,” Sankaran said at the meeting. Call the analyst.

He said many customers are still working from home, but instead of going to restaurants, they continue to prepare their meals there. Sales of meat, seafood, agricultural products, eggs, breakfast cereals and fine wines continue to be sold in larger quantities than other products, he said.

“But, as expected, there were some categories below the pandemic level, such as soups, pasta, and pasta sauces,” he said. “I think we’re looking at what’s loaded in the pantry.”

Albertsons can easily withstand inflation of 3% to 4%, but higher ones will be much tougher, Sankaran said.

“If you go beyond that, you’ll have difficult conversations up and down the supply chain,” he said.

Sankaran also explained why the company decided to discontinue its courier service at the end of last year and use a third-party driver for services such as DoorDash. In its final earnings announcement in January, Albertsons said it wouldn’t use its employees to deliver groceries, but didn’t say why.

Reason? The grocery delivery business is not profitable.

“Due to the difficulty of collecting shipping charges, we are shifting to places where we use third parties and are on the road to improving that aspect of our business,” says Sankaran.

DoorDash announced last week Plan to open a small warehouse Later this year, in Garden City, the driver will use it to deliver groceries, handy items and packaged restaurant desserts to customers in the Boise region. The West Chinden Boulevard warehouse will be ready between July and September.

The company’s revenue is driven by a drive-up and go program where customers order groceries online and bring them to a car parked in a dedicated space near the store entrance. The clerk takes out the products from the shelves in the store and brings them to the customer.

“This was the fastest growing segment of e-business last year,” said Diamond.

Digital sales increased by more than 200% in each quarter of the 2020-21 fiscal year ending February 27.

“Drive Up & Go increased by more than 1,000% in the fourth quarter and 865% during the fiscal year,” said Sankaran.

That year, Albertsons added a store pick-up service to 343 stores, with a total of 1,420 stores offering Drive Up & Go. From 2021 to the end of 2010, the company will serve 2,000 stores, reaching 98% of the stores.

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