Albertsons Companies reported results for the second quarter of fiscal 2023 which ended September 9, 2023.
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Net sales and other revenue was $18.3 billion during the 12 weeks ended September 9, 2023 ("second quarter of fiscal 2023") compared to $17.9 billion during the 12 weeks ended September 10, 2022 ("second quarter of fiscal 2022").
The increase was driven by the Company's 2.9% increase in identical sales, with strong growth in pharmacy sales, a 19% increase in digital sales, and retail price inflation across most categories being the primary contributors to the identical sales increase.
The increase in Net sales and other revenue was partially offset by lower fuel sales.
Gross margin rate decreased to 27.6% during the second quarter of fiscal 2023 compared to 27.9% during the second quarter of fiscal 2022.
Excluding the impact of fuel and LIFO expense, gross margin rate decreased 37 basis points compared to the second quarter of fiscal 2022.
The strong growth in pharmacy operations, which carries an overall lower gross margin rate, and increases in shrink were the primary drivers of the decrease, partially offset by our procurement and sourcing productivity initiatives.
The rate decrease related to pharmacy operations was primarily due to growth in pharmacy sales and fewer COVID-19 vaccines in the second quarter of fiscal 2023.
In addition, the benefits from our productivity initiatives allowed us to continue to provide incremental price investments to our customers during the second quarter of fiscal 2023.
Net income was $266.9 million, or $0.46 per share, during the second quarter of fiscal 2023.
Net income was $342.7 million, or $0.59 per share, during the second quarter of fiscal 2022.
Adjusted net income was $367.7 million, or $0.63 per share, during the second quarter of fiscal 2023 compared to $418.3 million, or $0.72 per share, during the second quarter of fiscal 2022.
Adjusted EBITDA was $976.9 million, or 5.3% of Net sales and other revenue, during the second quarter of fiscal 2023 compared to $1,048.5 million, or 5.9% of Net sales and other revenue, during the second quarter of fiscal 2022.
The decrease in Adjusted EBITDA in the second quarter of fiscal 2023 was primarily due to a decrease in gross margin contribution from our fuel business and fewer COVID-19 vaccinations.
We expect a continued decline in demand for COVID-19 vaccinations and at-home test kits, resulting in an approximate $75 million headwind to Adjusted EBITDA for the remaining two quarters of fiscal 2023. ■