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Albertsons Companies, Inc. (NYSE: ACI) (the "Company") today reported results for the third quarter of fiscal 2021, which ended December 4, 2021.
Third Quarter of Fiscal 2021 Highlights
•Identical sales increased 5.2%; on a two-year stacked basis identical sales growth was 17.5%
•Digital sales increased 9%; on a two-year stacked basis digital sales growth was 234%
•Net income of $425 million, or $0.74 per Class A common share
•Adjusted net income of $457 million, or $0.79 per Class A common share
•Adjusted EBITDA of $1,051 million
"We are pleased with our third quarter results as we continue to execute against our transformation strategy. A favorable economic backdrop together with the heroic performance of our frontline retail, distribution, and manufacturing teams contributed to these better-than-expected results," said Vivek Sankaran, CEO. "Also driving these results was our continued focus on in-store excellence, acceleration of our digital and omnichannel capabilities, and delivery of our productivity initiatives. During the quarter, we continued to gain market share in both units and dollars and saw ongoing improvement in both the in-store and online customer experience."
Third Quarter of Fiscal 2021 Results Compared to Third Quarter of Fiscal 2020
Net sales and other revenue was $16.7 billion during the 12 weeks ended December 4, 2021 ("third quarter of fiscal 2021") compared to $15.4 billion during the 12 weeks ended December 5, 2020 ("third quarter of fiscal 2020"). The increase was driven by the Company's 5.2% increase in identical sales, as well as higher fuel sales and sales related to stores acquired and opened since the third quarter of fiscal 2020. Retail price inflation and incremental sales related to administering COVID-19 vaccines contributed to the 5.2% identical sales increase.
Gross margin rate decreased to 28.9% during the third quarter of fiscal 2021 compared to 29.3% during the third quarter of fiscal 2020. Excluding the impact of fuel, gross margin rate increased 10 basis points compared to the third quarter of fiscal 2020. The increase in gross margin rate was primarily due to productivity initiatives, improved pharmacy margins related to administering COVID-19 vaccines and favorable product mix, largely offset by lower gross margin rates across certain product categories due to the rate impact of increased product costs driven by the current inflationary environment, as well as higher supply chain costs.
Selling and administrative expenses decreased to 25.4% of net sales and other revenue during the third quarter of fiscal 2021 compared to 28.0% during the third quarter of fiscal 2020. Excluding the impact of fuel and the $285.7 million charge related to the withdrawal from the United Food and Commercial Workers International Union ("UFCW") Union-Industry Pension Fund ("National Fund") during the third quarter of fiscal 2020, selling and administrative expenses as a percentage of net sales and other revenue decreased 20 basis points. The decrease in selling and administrative expenses was primarily attributable to lower COVID-19 related expenses and the execution of productivity initiatives, which were offset by higher employee costs, depreciation and other expenses