Benzinga | Jul 29, 2021 03:19PM EDT

Albertsons Companies Stock Gains On Strong Q1 Earnings, Raised FY21 Outlook

* Albertsons Companies Inc (NYSE:ACI) reported a first-quarter FY21 sales decline of 6.5% to $21.27 billion, beating the analyst consensus of $20.3 billion.

* Identical sales decreased 10.0%; on a two-year stacked basis, Identical sales growth was 16.5%.

* Gross profit decreased 8.6% Y/Y to $6.2 billion. Gross profit margin contracted 70 bps to 29.1%.

* Selling and administrative expenses fell 4.6% Y/Y to $5.5 billion and were 25.9% of sales.

* The operating margin was 3.2%, and operating income for the quarter declined 29.3% Y/Y to $687.1 million.

* Net cash provided by operating activities declined 49.4% Y/Y to $1.1 billion. The company held $2.2 billion in cash and equivalents as of June 19, 2021.

* Adjusted EPS of $0.89 beat the analyst consensus of $0.67.

* "Our performance is clear evidence of the structural enhancements we have made to our business, as well as our ability to retain market share gains compared to pre-pandemic levels," said CEO Vivek Sankaran.

* Outlook: Albertsons sees FY21 Identical sales to decline (5%) - (6%), versus the prior view of decline (6%) - (7.5%), representing two-year stacked growth of 10.9% - 11.9%, previously 9.4% - 10.9%.

* The company raised the adjusted EPS outlook to $2.20 - $2.30 from $1.95 - $2.05, compared to the consensus of $1.98.

* Adjusted EBITDA outlook raised to $3.7 billion - $3.8 billion from $3.5 billion - $3.6 billion.

* Price action: ACI shares are trading higher by 4.39% at $21.63 on the last check Thursday.