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(Bloomberg) -- Albertsons Cos. raised its adjusted earnings outlook for the full year, a positive sign for the grocer seeking to pave a new path after its proposed deal with Kroger Co. fell apart.
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The nation’s second-largest supermarket operator now expects adjusted earnings per share in the range of $2.25 to $2.31, up from as much as $2.30 previously.
Albertsons is hosting a call with analysts Wednesday morning, the company’s first in more than two years when it agreed to combine with Kroger. That $24.6 billion deal ended late last year after a federal judge blocked it.
Shares rose 0.2% at 9:52 a.m. on Wednesday in New York. Albertsons stock fell 14% last year while the Russell 1000 index gained 24%.
The grocer is seeking growth as a standalone company at a time when price-sensitive consumers are prioritizing groceries and other necessities. Inflation has stabilized in recent months, but people’s budgets remain stretched.
“We are a stronger company today than pre-merger,” Chief Financial Officer Shannon McCollam said on a call with analysts. Albertsons has invested in its core business over the past two years and will continue to pursue growth initiatives such as automation and advertising to compete against better-performing retailers, executives said.
The company said it’s not having conversations with other bidders at this time and will focus on operating its business.
Adjusted EPS for the quarter ending Nov. 30 was 71 cents, higher than what Wall Street analysts were forecasting. Still, costs associated with online orders weighed on profit margins. The company’s comparable sales growth slightly missed expectations. Fuel sales weighed on operations, though pharmacy and digital fueled the rise.
Consumers continue to feel financial pressure, and Albertsons will seek to further cut prices on some products, Chief Executive Officer Vivek Sankaran said. The company continues to study the impact of GLP-1 weight-loss drugs on consumption.
Albertsons also announced a 25% raise to its quarterly dividend.
Kroger Deal
The Boise, Idaho-based grocer runs over 2,200 stores across the US under names like Safeway and Vons. After acquiring Safeway in 2015, it had tried to go public but canceled its plans twice before successfully doing so during the pandemic. Just about two years later, it agreed to be acquired by its bigger rival Kroger in October.