Albertsons® Companies, Inc. Reports Second Quarter Fiscal 2025 Results

Announces $750 million Accelerated Share Repurchase Agreement

Increases Fiscal 2025 Adjusted EPS Outlook

Albertsons® Companies, Inc. (NYSE:ACI) (the "Company") today reported results for the second quarter of fiscal 2025, which ended September 6, 2025.

Second Quarter of Fiscal 2025 Highlights

• Identical sales increased 2.2%, as adjusted (1)
• Digital sales increased 23%
• Loyalty members increased 13% to 48.7 million
• Net income of $169 million, or $0.30 per share
• Adjusted net income of $248 million, or $0.44 per share
• Adjusted EBITDA of $848 million

"In the second quarter, we delivered solid operating and financial results while continuing to invest in our core business and elevate the customer experience," said Susan Morris, Chief Executive Officer. "Strong performance against our strategic priorities fueled deeper engagement across our digital platforms, resulting in outsized growth in digital sales, pharmacy, and loyalty membership. Our productivity engine continued to offset inflationary pressures and fund investments in areas that matter most to our customers, including fresh categories and omnichannel convenience."

Morris added, "As we look ahead to the balance of fiscal 2025 and beyond, it is a new day at Albertsons. We're operating from a position of strength, taking bold action, and leading transformative change with confidence. We're investing with purpose, modernizing capabilities through scalable technology, and advancing ongoing productivity initiatives to fuel long-term growth. The $750 million accelerated share repurchase we announced today underscores our conviction in the value of our business and our commitment to delivering shareholder returns."

Second Quarter of Fiscal 2025 Results

Net sales and other revenue increased 2.0% to $18,915.8 million for the 12 weeks ended September 6, 2025 ("second quarter of fiscal 2025") from $18,551.5 million during the 12 weeks ended September 7, 2024 ("second quarter of fiscal 2024"). This increase was driven by a 2.2% increase in identical sales, with strong growth in pharmacy sales being the primary driver of the identical sales increase. We also continued to grow our digital sales with a 23% increase during the second quarter of fiscal 2025. These increases in Net sales and other revenue were partially offset by lower fuel sales.

Gross margin rate decreased to 27.0% during the second quarter of fiscal 2025 compared to 27.6% during the second quarter of fiscal 2024. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 63 basis points compared to the second quarter of fiscal 2024. This decrease in gross margin rate was driven by strong growth in pharmacy sales, which carries an overall lower gross margin rate, and increases in delivery and handling costs related to the continued growth in our digital sales. We also made incremental investments in our customer value proposition which were funded by the benefits from our productivity initiatives.

Selling and administrative expenses decreased to 25.4% of Net sales and other revenue during the second quarter of fiscal 2025 compared to 25.8% during the second quarter of fiscal 2024. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue decreased 50 basis points. This decrease in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to the leveraging of employee costs and lower merger-related costs, partially offset by increases in business transformation costs. The benefits from our productivity initiatives continue to help offset increasing wage rates and other inflationary pressures on our operating expenses.

Net loss on property dispositions and impairment losses was $4.4 million during the second quarter of fiscal 2025 compared to $43.9 million during the second quarter of fiscal 2024. The net loss on impairment during the second quarter of fiscal 2024 was primarily due to impairment losses of $39.8 million primarily related to equipment from the closing of our micro-fulfillment centers and $13.5 million of retail store impairment losses, partially offset by $9.4 million of gains from the sale of real estate assets.

Interest expense, net was $105.3 million during the second quarter of fiscal 2025 compared to $103.6 million during the second quarter of fiscal 2024.

Other income, net was $29.7 million during the second quarter of fiscal 2025 compared to other expense, net of $1.9 million during the second quarter of fiscal 2024.

Income tax expense was $51.2 million during the second quarter of fiscal 2025, representing a 23.3% effective tax rate, compared to $41.0 million during the second quarter of fiscal 2024, representing a 22.0% effective tax rate.

Net income was $168.5 million, or $0.30 per share, during the second quarter of fiscal 2025, compared to $145.5 million, or $0.25 per share, during the second quarter of fiscal 2024.

Adjusted net income was $248.4 million, or $0.44 per share, during the second quarter of fiscal 2025, compared to $301.0 million, or $0.51 per share, during the second quarter of fiscal 2024.

Adjusted EBITDA was $848.4 million, or 4.5% of Net sales and other revenue, during the second quarter of fiscal 2025 compared to $900.6 million, or 4.9% of Net sales and other revenue, during the second quarter of fiscal 2024.

Capital Allocation and Common Stock Repurchase Program

During the first 28 weeks of fiscal 2025, capital expenditures were $950.5 million, which primarily included the completion of 51 remodels, the opening of three new stores and continued investment in our digital and technology platforms. During the second quarter of fiscal 2025, the Company paid its quarterly dividend of $0.15 per share on August 8, 2025 to stockholders of record as of July 25, 2025. On October 14, 2025, the Company announced the next quarterly dividend payment of $0.15 per share to be paid on November 7, 2025 to stockholders of record as of the close of business on October 24, 2025.

During the first 28 weeks of fiscal 2025, the Company repurchased 25.7 million shares of common stock for a total of $550.1 million pursuant to the existing multi-year $2.0 billion repurchase authorization.

On October 14, 2025, subsequent to the end of the second quarter of fiscal 2025, the Company entered into an accelerated share repurchase agreement (the "ASR Agreement") with JPMorgan Chase Bank, National Association to repurchase $750 million of shares of the Company's common stock. Also on October 14, 2025, the Company announced that the Board of Directors has authorized an increase to the share repurchase program from $2.0 billion to $2.75 billion, inclusive of the ASR Agreement.

Fiscal 2025 Outlook

The Company is providing an updated fiscal 2025 outlook and expects its financial results to be as follows:

• Identical sales growth in the range of 2.2% to 2.75% (previously 2.0% to 2.75%)
• Adjusted EBITDA in the range of $3.8 billion to $3.9 billion, including approximately $65 million related to the Company's 53rd week (unchanged)
• Adjusted net income per Class A common share in the range of $2.06 to $2.19 per share (previously $2.03 to $2.16)
• Effective income tax rate in the range of 23.5% to 24.5% (unchanged)
• Capital expenditures in the range of $1.8 billion to $1.9 billion (previously $1.7 billion to $1.9 billion)

The Company is unable to provide a full reconciliation of the GAAP and Non-GAAP Measures (as defined below) used in the updated fiscal 2025 outlook without unreasonable effort because it is not possible to predict certain of the adjustment items with a reasonable degree of certainty. This information is dependent upon future events and may be outside of the Company's control and could have a significant impact on its GAAP financial results for fiscal 2025. The expected effective tax rate does not reflect potential future rate adjustments for the resolution of tax audits or potential changes in tax laws, which cannot be predicted with reasonable certainty.

Conference Call

The Company will hold a conference call today at 8:30 a.m. Eastern Time, which will be hosted by Susan Morris, CEO, and Sharon McCollam, President & CFO. The call will be webcast and can be accessed at https://albertsonscompanies.com/investors/events-and-presentations. A replay of the webcast will be available for at least two weeks following the completion of the call.

About Albertsons Companies

Albertsons Companies is a leading food and drug retailer in the United States. As of September 6, 2025, the Company operated 2,257 retail stores with 1,720 in-store pharmacies, 405 associated fuel centers, 22 dedicated distribution centers and 19 manufacturing facilities. The Company operates stores across 35 states and the District of Columbia under 22 well known banners including Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, ACME, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs, Kings Food Markets and Balducci's Food Lovers Market. The Company is committed to helping people across the country live better lives by making a meaningful difference, neighborhood by neighborhood. In 2024, along with the Albertsons Companies Foundation, the Company contributed more than $435 million in food and financial support, including more than $40 million through our Nourishing Neighbors Program to ensure those living in our communities and those impacted by disasters have enough to eat.

Albertsons, Safeway, Vons, Jewel-Osco, Tom Thumb, Randalls, United Supermarkets, Pavilions, Haggen and Balducci's Food Lovers Market are registered trademarks of Albertsons Companies Inc. or its subsidiaries. ACME, Carrs, Kings Food Markets, Shaw's, and Star Market are trademarks of Albertsons Companies Inc. or its subsidiaries. Albertsons associated logos, product names and services are trademarks of Albertsons Companies, Inc. All other trademarks are the property of their respective owners.

Forward-Looking Statements and Factors That Impact Our Operating Results and Trends

This press release includes "forward-looking statements" within the meaning of the federal securities laws. The "forward-looking statements" include our current expectations, assumptions, estimates and projections about our business and our industry. They include statements relating to our future operating or financial performance which the Company believes to be reasonable at this time. You can identify forward-looking statements by the use of words such as "outlook," "may," "should," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future" and "intends" and similar expressions which are intended to identify forward-looking statements.

These statements are not guarantees of future performance and are subject to numerous risks and uncertainties which are beyond our control and difficult to predict and could cause actual results to differ materially from the results expressed or implied by the statements. Risks and uncertainties that could cause actual results to differ materially from such statements and may adversely impact our financial condition and results of operations include:

• changes in macroeconomic conditions such as rates of food price inflation or deflation, fuel and commodity prices and macroeconomic uncertainty, including in international trade and current and potential future tariffs;
• changes in consumer behavior and spending patterns resulting from macroeconomic conditions, including shifts in state and federal assistance programs;
• changes in wage rates and our ability to negotiate acceptable contracts with labor unions, including the outcome of pending union negotiations;
• changes in price of goods sold in our stores and cost of goods used in our food products, as well as limitations in our ability to provide certain services, due to changes in various state and federal government legislation, regulation and executive orders;
• uncertainty regarding the geopolitical environment;
• our inability to execute on our standalone business and value-creating strategies following the termination of the merger agreement with Kroger due to prolonged uncertainties and restrictions on our business during the pendency of the merger;
• litigation in connection with the previously pending merger and the termination of the merger agreement, resulting in ongoing costs that we may be required to pay in connection with the lawsuit against Kroger, or our inability to collect the $600 million termination fee from Kroger, and negative reactions from the financial markets and our suppliers, customers, and associates as a result of the litigation;
• our ability to recruit and retain qualified or specialized associates who are critical to the success of our Customers for Life strategy;
• failure to achieve productivity initiatives, unexpected changes in our objectives and plans, inability to implement our strategies, plans, programs and initiatives, or enter into strategic transactions, investments or partnerships in the future on terms acceptable to us, or at all;
• challenges with our supply chain;
• operational and financial effects resulting from cyber incidents at the Company or at a third party, including outages in the cloud environment and the effectiveness of business continuity plans during a ransomware or other cyber incident; and
• changes in tax rates, tax laws, and regulations that directly impact our business or our customers.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements and risk factors. Forward-looking statements contained in this press release reflect our view only as of the date of this press release. We undertake no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

In evaluating our financial results and forward-looking statements, you should carefully consider the risks and uncertainties more fully described in the "Risk Factors" section or other sections in our reports filed with the SEC including the most recent annual report on Form 10-K and any subsequent periodic reports on Form 10-Q and current reports on Form 8-K.

Non-GAAP Measures and Identical Sales

Non-GAAP Measures. EBITDA, Adjusted EBITDA, Adjusted net income, Adjusted net income per Class A common share and Net debt ratio (collectively, the "Non-GAAP Measures") are performance measures that provide supplemental information the Company believes is useful to analysts and investors to evaluate its ongoing results of operations, when considered alongside other GAAP measures such as net income, operating income, gross margin, and net income per Class A common share. These Non-GAAP Measures exclude the financial impact of items management does not consider in assessing the Company's ongoing core operating performance, and thereby provide useful measures to analysts and investors of its operating performance on a period-to-period basis. Other companies may have different definitions of Non-GAAP Measures and provide for different adjustments, and comparability to the Company's results of operations may be impacted by such differences. The Company also uses Adjusted EBITDA and Net debt ratio for board of director and bank compliance reporting. The Company's presentation of Non-GAAP Measures should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items.

Identical Sales. As used in this earnings release, the term "identical sales" includes stores operating during the same period in both the current fiscal year and the prior fiscal year, comparing sales on a daily basis. Direct to consumer digital sales are included in identical sales, and fuel sales are excluded from identical sales.

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