Albertsons (NYSE: ACI) Q1 sales $24,941.6 million, EPS $0.17
Rhea-AI Filing Summary
Albertsons Companies, Inc. reported first-quarter fiscal 2026 Net sales and other revenue of $24,941.6 million, essentially flat year over year, while identical sales excluding fuel declined 0.8%. Digital sales grew 13%, with continued strength in eCommerce, loyalty and media initiatives.
Net income fell to $84.7 million from $236.4 million, and diluted EPS declined to $0.17 from $0.41, driven by lower gross margin, higher selling and administrative expenses and increased interest expense. Adjusted net income was $210.3 million (Adjusted EPS $0.42) versus $318.9 million ($0.55) and Adjusted EBITDA was $1,013.2 million versus $1,111.0 million.
Operating cash flow was strong at $728.9 million. The company invested $522.1 million in capital expenditures, including remodels, new stores and technology, paid $84.0 million in dividends and repurchased 13.4 million shares for $226.5 million. Total debt was $9,162.8 million, including $700.0 million outstanding under the ABL Facility. Albertsons also detailed an opioid-related settlement framework with a previously recorded loss of $773.8 million and related liabilities of $273.1 million current and $500.7 million long term as of June 20, 2026.
Positive
- None.
Negative
- Profitability declined materially: Net income dropped to $84.7 million from $236.4 million, diluted EPS to $0.17 from $0.41, and Adjusted EBITDA to $1,013.2 million from $1,111.0 million, alongside a 0.8% decline in identical sales excluding fuel.
- Significant opioid-related settlement burden: A loss of $773.8 million related to an opioid-claim settlement framework has been recorded, with $273.1 million classified as current and $500.7 million as long-term liabilities, implying sizable cash outflows over the coming nine years.
Filing Explained
The opioid framework is unfinished and the Kroger fee remains disputed, while June 20 disclosures show $1,864.3 million of repurchase capacity.
Albertsons has not completed the opioid settlement framework described in this quarterly filing, so the related payment obligation remains conditional rather than a finalized settlement.
A Form 10-Q provides interim financial statements and updates on liquidity and risks. This filing covers the 16 weeks ended
The first planned payment of
As of
Key Figures
Net sales and other revenue: $24,941.6 million
Net income: $84.7 million
Diluted EPS: $0.17 per Class A common share
+5 more
8 metrics
Net sales and other revenue
$24,941.6 million
16 weeks ended June 20, 2026
Net income
$84.7 million
16 weeks ended June 20, 2026
Diluted EPS
$0.17 per Class A common share
16 weeks ended June 20, 2026
Adjusted net income
$210.3 million
Non-GAAP measure for first quarter fiscal 2026
Adjusted EBITDA
$1,013.2 million
First quarter fiscal 2026, 4.1% of Net sales and other revenue
Net cash from operating activities
$728.9 million
16 weeks ended June 20, 2026
Total debt
$9,162.8 million
As of June 20, 2026, including ABL Facility borrowings
Identical sales change (ex fuel)
-0.8%
16 weeks ended June 20, 2026 versus prior-year period
Key Terms
Adjusted EBITDA, asset-based loan facility, last-in, first-out ("LIFO"), False Claims Act, +1 more
5 terms
Adjusted EBITDA financial
"The CODM evaluates performance and allocates resources using Retail segment EBITDA, defined as earnings..."
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
asset-based loan facility financial
"As of June 20, 2026, there was $700.0 million outstanding under the asset-based loan facility..."
last-in, first-out ("LIFO") financial
"Interim LIFO inventory costs are based on management's estimates of expected year-end inventory levels..."
False Claims Act regulatory
"Two qui tam actions ... under the False Claims Act ("FCA") have been filed against the Company..."
A False Claims Act is a law that lets the government and private whistleblowers sue companies that knowingly submit false bills or statements to obtain government money or benefits. For investors it matters because such lawsuits can trigger large fines, settlements or reputational damage—similar to a leak in a ship that can force expensive repairs and slow operations—potentially reducing cash flow, increasing legal costs, and harming stock value.
Opioid Settlement Framework regulatory
"The Company announced that it reached a settlement framework ... (the "Opioid Settlement Framework")."
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Albertsons (ACI) perform financially in Q1 fiscal 2026?
Albertsons generated $24,941.6 million in Net sales and other revenue and $84.7 million in net income, for diluted EPS of $0.17. Adjusted net income was $210.3 million (Adjusted EPS $0.42) and Adjusted EBITDA was $1,013.2 million, down from $1,111.0 million a year earlier.
What were Albertsons (ACI) identical and digital sales trends in Q1 2026?
Identical sales excluding fuel decreased 0.8% in the first quarter of fiscal 2026. By contrast, digital sales increased 13% versus the first quarter of fiscal 2025, reflecting growth in Drive Up & Go curbside pickup, home delivery and broader digital engagement.
How are Albertsons (ACI) margins and expenses trending in Q1 2026?
Gross margin rate declined to 26.6% from 27.1%, pressured by higher delivery and fuel-related costs. Selling and administrative expenses rose to 25.6% of sales from 25.4%, driven by rent, business transformation and merger-related litigation costs, partly offset by lower employee costs.
What is Albertsons (ACI)'s debt and liquidity position as of June 20, 2026?
Total debt was $9,162.8 million, including $7,232.7 million of senior unsecured notes and $700.0 million drawn on the ABL Facility. The company reported ABL availability of $3,287.4 million and estimated liquidity needs of $6.0–$6.7 billion over the next 12 months.
How many stores does Albertsons (ACI) operate and what changed in Q1 2026?
Albertsons operated 2,240 stores as of June 20, 2026. During the quarter, it acquired 2 stores, opened 4 new stores and closed 10, and completed 15 remodels, while continuing to emphasize larger-format locations over 50,000 square feet.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
For the quarterly period ended June 20, 2026
OR
For the transition period from _____ to _____
Commission File Number: 001-39350
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices and zip code)
(208 ) 395-6200
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | |||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||||||||
| Emerging growth company | |||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of July 24, 2026, the registrant had 485,325,683 shares of Class A common stock, par value $0.01 per share, outstanding.
Albertsons Companies, Inc. and Subsidiaries
PART I - FINANCIAL INFORMATION | Page | |||||||
Item 1 - Condensed Consolidated Financial Statements (unaudited) | ||||||||
Condensed Consolidated Balance Sheets | 3 | |||||||
Condensed Consolidated Statements of Operations and Comprehensive Income | 4 | |||||||
Condensed Consolidated Statements of Cash Flows | 5 | |||||||
Condensed Consolidated Statements of Stockholders' Equity | 6 | |||||||
Notes to Condensed Consolidated Financial Statements | 7 | |||||||
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations | 19 | |||||||
Item 3 - Quantitative and Qualitative Disclosures About Market Risk | 31 | |||||||
Item 4 - Controls and Procedures | 31 | |||||||
PART II - OTHER INFORMATION | ||||||||
Item 1 - Legal Proceedings | 32 | |||||||
Item 1A - Risk Factors | 32 | |||||||
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds | 32 | |||||||
Item 3 - Defaults Upon Senior Securities | 33 | |||||||
Item 4 - Mine Safety Disclosures | 33 | |||||||
Item 5 - Other Information | 33 | |||||||
Item 6 - Exhibits | 33 | |||||||
SIGNATURES | 35 | |||||||
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1 - Condensed Consolidated Financial Statements (unaudited)
Albertsons Companies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions, except share data)
(unaudited)
| June 20, 2026 | February 28, 2026 | |||||||||||||
| ASSETS | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Receivables, net | ||||||||||||||
| Inventories, net | ||||||||||||||
| Other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Property and equipment, net | ||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||
| Intangible assets, net | ||||||||||||||
| Goodwill | ||||||||||||||
| Other assets | ||||||||||||||
| TOTAL ASSETS | $ | $ | ||||||||||||
| LIABILITIES | ||||||||||||||
| Current liabilities | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Accrued salaries and wages | ||||||||||||||
| Current maturities of long-term debt and finance lease obligations | ||||||||||||||
| Current operating lease obligations | ||||||||||||||
| Other current liabilities | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Long-term debt and finance lease obligations | ||||||||||||||
| Long-term operating lease obligations | ||||||||||||||
| Deferred income taxes | ||||||||||||||
| Other long-term liabilities | ||||||||||||||
| Commitments and contingencies | ||||||||||||||
| STOCKHOLDERS' EQUITY | ||||||||||||||
Class A common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
Treasury stock, at cost, | ( | ( | ||||||||||||
| Accumulated other comprehensive income | ||||||||||||||
| Retained earnings | ||||||||||||||
| Total stockholders' equity | ||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | ||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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Albertsons Companies, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Income
(in millions, except per share data)
(unaudited)
| 16 weeks ended | |||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||
| Net sales and other revenue | $ | $ | |||||||||
| Cost of sales | |||||||||||
| Gross margin | |||||||||||
| Selling and administrative expenses | |||||||||||
| Gain on property dispositions and impairment losses, net | ( | ( | |||||||||
| Operating income | |||||||||||
| Interest expense, net | |||||||||||
| Other income, net | ( | ( | |||||||||
| Income before income taxes | |||||||||||
| Income tax expense | |||||||||||
| Net income | $ | $ | |||||||||
| Other comprehensive income (loss), net of tax | |||||||||||
| Recognition of pension loss | ( | ( | |||||||||
| Other | ( | ||||||||||
| Other comprehensive loss | $ | ( | $ | ( | |||||||
| Comprehensive income | $ | $ | |||||||||
| Net income per Class A common share | |||||||||||
| Basic net income per Class A common share | $ | $ | |||||||||
| Diluted net income per Class A common share | |||||||||||
| Weighted average Class A common shares outstanding | |||||||||||
| Basic | |||||||||||
| Diluted | |||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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Albertsons Companies, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in millions)
(unaudited)
| 16 weeks ended | |||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Gain on property dispositions and impairment losses, net | ( | ( | |||||||||
| Depreciation and amortization | |||||||||||
| Operating lease right-of-use assets amortization | |||||||||||
| LIFO expense | |||||||||||
| Deferred income tax | ( | ||||||||||
| Contributions to pension and post-retirement benefit plans, net of expense (income) | ( | ( | |||||||||
| Deferred financing costs | |||||||||||
| Equity-based compensation expense | |||||||||||
| Other operating activities | ( | ||||||||||
| Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
| Receivables, net | ( | ( | |||||||||
| Inventories, net | ( | ( | |||||||||
| Accounts payable, accrued salaries and wages and other accrued liabilities | ( | ( | |||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Self-insurance assets and liabilities | ( | ||||||||||
| Other operating assets and liabilities | |||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Payments for property, equipment and intangibles, including lease buyouts | ( | ( | |||||||||
| Proceeds from sale of assets | |||||||||||
| Business acquisitions, net of cash acquired | ( | ||||||||||
| Other investing activities | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from issuance of long-term debt, including ABL facility | |||||||||||
| Payments on long-term borrowings, including ABL facility | ( | ( | |||||||||
| Payments of obligations under finance leases | ( | ( | |||||||||
| Dividends paid on common stock | ( | ( | |||||||||
| Treasury stock purchase, at cost | ( | ( | |||||||||
| Employee tax withholding on vesting of restricted stock units | ( | ( | |||||||||
| Other financing activities | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Net increase (decrease) in cash and cash equivalents and restricted cash | ( | ||||||||||
| Cash and cash equivalents and restricted cash at beginning of period | |||||||||||
| Cash and cash equivalents and restricted cash at end of period | $ | $ | |||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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Albertsons Companies, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders' Equity
(in millions, except share data)
(unaudited)
| Class A Common Stock | Additional paid-in capital | Treasury Stock | Accumulated other comprehensive income | Retained earnings | Total stockholders' equity | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of February 28, 2026 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Shares issued and employee tax withholding on vesting of restricted stock units | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other activity | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Balance as of June 20, 2026 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | Additional paid-in capital | Treasury Stock | Accumulated other comprehensive income | Retained earnings | Total stockholders' equity | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of February 22, 2025 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Shares issued and employee tax withholding on vesting of restricted stock units | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other activity | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 14, 2025 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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Albertsons Companies, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Significant Accounting Policies
Use of estimates: The preparation of the Company's Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting periods presented. Certain estimates require difficult, subjective or complex judgments about matters that are inherently uncertain, including legal contingencies, self-insurance liabilities and impairments of long-lived assets and goodwill. Actual results could differ from those estimates.
Acquisitions: On April 29, 2026, the Company acquired certain retail operations from Hames Corporation ("Hames"). The purchase price was $28.0 million, and the transaction was accounted for under the acquisition method of accounting. The purchase price was allocated to the fair values of the identifiable assets and liabilities. Net assets acquired primarily consisted of fixed assets, intangibles and inventory, valued at $19.2 million, $7.3 million and $2.2 million, respectively. Intangible assets acquired primarily consisted of tradenames. Pro forma results are not presented as the acquisition was not considered material to the Company. Third-party acquisition-related costs were immaterial for the 16 weeks ended June 20, 2026 and were expensed as incurred as a component of Selling and administrative expenses.
Convertible Common Stock and Preferred Stock: The Company's certificate of incorporation authorizes 150,000,000 0.01 100,000,000 0.01 1,750,000 1,410,000
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stock. As of June 20, 2026 and February 28, 2026, no no
Income taxes: Income tax expense was $29.0 million for the 16 weeks ended June 20, 2026, representing a 25.5 % effective tax rate. Income tax expense was $75.0 million for the 16 weeks ended June 14, 2025, representing a 24.1 % effective tax rate. The Company's effective tax rate for both the 16 weeks ended June 20, 2026 and June 14, 2025 differs from the federal income tax statutory rate of 21% primarily due to state income taxes.
Disaggregated Revenues
The following table represents Net sales and other revenue by product type (dollars in millions):
| 16 weeks ended | |||||||||||||||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||||||||||||||
| Amount (1) | % of Total | Amount (1) | % of Total | ||||||||||||||||||||
| Non-perishables (2) | $ | % | $ | % | |||||||||||||||||||
| Fresh (3) | |||||||||||||||||||||||
| Pharmacy | |||||||||||||||||||||||
| Fuel | |||||||||||||||||||||||
| Other (4) | |||||||||||||||||||||||
| Net sales and other revenue | $ | % | $ | % | |||||||||||||||||||
(1) Digital related sales are included in the categories to which the revenue pertains.
(2) Consists primarily of general merchandise, grocery, dairy and frozen foods.
(3) Consists primarily of produce, meat, deli and prepared foods, bakery, floral and seafood.
(4) Consists primarily of wholesale sales to third parties, commissions, rental income, media advertising revenue and other miscellaneous revenue.
Recently issued accounting standards: In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses." The ASU requires disclosures about specific types of expenses, including purchases of inventory, employee compensation,
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depreciation and amortization. The amendments in this ASU are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements and related disclosures.
In September 2025, the FASB issued ASU 2025-06, "Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software." The ASU removes all references to prescriptive and sequential software development stages. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements and related disclosures.
NOTE 2 - FAIR VALUE MEASUREMENTS
The accounting guidance for fair value established a framework for measuring fair value and established a three-level valuation hierarchy for disclosure of fair value measurement. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability at the measurement date. The three levels are defined as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities;
Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and
Level 3 - Unobservable inputs in which little or no market activity exists, requiring an entity to develop its own assumptions that market participants would use to value the asset or liability.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The following table presents certain assets which were measured at fair value on a recurring basis as of June 20, 2026 (in millions):
| Fair Value Measurements | ||||||||||||||||||||||||||
| Total | Quoted prices in active markets for identical assets (Level 1) | Significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | |||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Short-term investments (1) | $ | $ | $ | $ | ||||||||||||||||||||||
| Non-current investments (2) | ||||||||||||||||||||||||||
| Derivative contracts (3) | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
(1) Primarily relates to Mutual Funds (Level 1) and Certificates of Deposit (Level 2). Included in Other current assets.
(2) Primarily relates to investments in Exchange-Traded Funds (Level 1) and certain equity investments, U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets.
(3) Primarily relates to energy derivative contracts. Included in Other assets.
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The following table presents certain assets and liabilities which were measured at fair value on a recurring basis as of February 28, 2026 (in millions):
| Fair Value Measurements | ||||||||||||||||||||||||||
| Total | Quoted prices in active markets for identical assets (Level 1) | Significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | |||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Short-term investments (1) | $ | $ | $ | $ | ||||||||||||||||||||||
| Non-current investments (2) | ||||||||||||||||||||||||||
| Derivative contracts (3) | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| Derivative contracts (3) | $ | $ | $ | $ | ||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
(1) Primarily relates to Mutual Funds (Level 1) and Certificates of Deposit (Level 2). Included in Other current assets.
(2) Primarily relates to investments in Exchange-Traded Funds (Level 1) and certain equity investments, U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets.
(3) Primarily relates to energy derivative contracts. Included in Other assets or Other current liabilities.
The Company records cash and cash equivalents, restricted cash, accounts receivable and accounts payable at cost. The recorded values of these financial instruments approximate fair value based on their short-term nature.
The estimated fair value of the Company's debt, including current maturities, was based on Level 2 inputs, being market quotes or values for similar instruments, and interest rates currently available to the Company for the issuance of debt with similar terms and remaining maturities as a discount rate for the remaining principal payments. As of June 20, 2026, the fair value of total debt was $8,648.7 million compared to the carrying value of $8,842.2 million, excluding debt discounts and deferred financing costs. As of February 28, 2026, the fair value of total debt was $8,649.9 million compared to the carrying value of $8,626.8 million, excluding debt discounts and deferred financing costs.
Assets Measured at Fair Value on a Non-Recurring Basis
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NOTE 3 - LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS
The Company's long-term debt and finance lease obligations as of June 20, 2026 and February 28, 2026, net of unamortized debt discounts of $35.4 million and $37.9 million, respectively, and deferred financing costs of $52.1 million and $55.2 million, respectively, consisted of the following (in millions):
| June 20, 2026 | February 28, 2026 | ||||||||||
Senior Unsecured Notes due 2028 to 2034, interest rate range of | $ | $ | |||||||||
New Albertsons L.P. Notes due 2027 to 2031, interest rate range of | |||||||||||
Safeway Inc. Notes due 2027 to 2031, interest rate range of | |||||||||||
| ABL Facility | |||||||||||
| Other financing obligations | |||||||||||
| Finance lease obligations | |||||||||||
| Total debt | |||||||||||
| Less current maturities | ( | ( | |||||||||
| Long-term portion | $ | $ | |||||||||
ABL Facility
As of June 20, 2026, there was $700.0 million outstanding under the asset-based loan facility (the "ABL Facility"), and letters of credit ("LOC") issued under the LOC sub-facility were $12.6 million. As of February 28, 2026, there was $425.0 million outstanding under the ABL Facility, and LOC issued under the LOC sub-facility were $12.7 million.
New Albertsons L.P. Notes
NOTE 4 - EMPLOYEE BENEFIT PLANS
Pension and Other Post-Retirement Benefits
The following table provides the components of net pension and post-retirement expense (income) (in millions):
| 16 weeks ended | |||||||||||||||||||||||
| Pension | Other post-retirement benefits | ||||||||||||||||||||||
| June 20, 2026 | June 14, 2025 | June 20, 2026 | June 14, 2025 | ||||||||||||||||||||
| Estimated return on plan assets | $ | ( | $ | ( | $ | $ | |||||||||||||||||
| Service cost | |||||||||||||||||||||||
| Interest cost | |||||||||||||||||||||||
| Amortization of prior service cost | |||||||||||||||||||||||
| Amortization of net actuarial gain | ( | ( | ( | ( | |||||||||||||||||||
| Income, net | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
The Company contributed $31.7 million and $42.9 million to its defined pension plans and post-retirement benefit plans during the 16 weeks ended June 20, 2026 and June 14, 2025, respectively. At the Company's discretion, additional funds may be contributed to the defined benefit pension plans that are determined to be beneficial to the
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Company. The Company currently anticipates contributing an additional $18.5 million to these plans for the remainder of fiscal 2026.
NOTE 5 - COMMITMENTS AND CONTINGENCIES AND OFF BALANCE SHEET ARRANGEMENTS
Guarantees
Lease Guarantees: The Company may have liability under certain operating leases that were assigned to third parties. If any of these third parties fail to perform their obligations under the leases, the Company could be responsible for the lease obligation. Because of the wide dispersion among third parties and the variety of remedies available, the Company believes that if an assignee became insolvent, it would not have a material effect on the Company's financial condition, results of operations or cash flows.
The Company also provides guarantees, indemnifications and assurances to others in the ordinary course of its business.
Legal Proceedings
The Company is subject from time to time to various claims and lawsuits, including matters involving trade, business and operational practices, personnel and employment issues, lawsuits alleging violations of state and/or federal wage and hour laws, real estate disputes, personal injury, antitrust claims, packaging or product claims, claims related to the sale of drug or pharmacy products, such as opioids, intellectual property claims and other proceedings arising in or outside of the ordinary course of business. The Company is also subject, from time to time, to government investigations, subpoenas, audits, reviews, claims enforcement actions and litigation. These can include routine, regular and special investigations, audits, civil or criminal subpoenas, civil investigative demands ("CIDs") and reviews by various governmental authorities. Some of these claims or suits purport or may be determined to be class actions and/or seek substantial damages. It is the opinion of the Company's management that although the amount of liability with respect to certain of the matters described herein cannot be ascertained at this time, any resulting liability of these and other matters, including any punitive damages, will not have a material adverse effect on the Company's business or overall financial condition.
The Company continually evaluates its exposure to loss contingencies arising from pending or threatened litigation and believes it has made provisions where the loss contingency is probable and can be reasonably estimated. Nonetheless, assessing and predicting the outcomes of these matters involves substantial uncertainties. While management currently believes that the aggregate estimated liabilities currently recorded are reasonable, it is reasonably possible that differences in actual outcomes or changes in management's evaluation or predictions could arise that could be material to the Company's results of operations or cash flows.
False Claims Act: Two qui tam actions alleging violations of the False Claims Act ("FCA") have been filed against the Company and its subsidiaries. Violations of the FCA are subject to treble damages and penalties of up to a specified dollar amount per false claim.
In United States ex rel. Proctor v. Safeway, filed in the United States District Court for the Central District of Illinois, the relator alleges that Safeway overcharged federal government healthcare programs by not providing the federal government, as part of its usual and customary prices, the benefit of discounts given to customers in pharmacy membership discount and price-matching programs. The relator filed his complaint under seal on November 11, 2011, and the complaint was unsealed on August 26, 2015. The relator amended the complaint on March 31, 2016. On June 12, 2020, the District Court granted Safeway's motion for summary judgment, holding that the relator could not prove that Safeway acted with the intent required under the FCA, and judgment was issued on June 15, 2020. On July 10, 2020, the relator filed a motion to alter or amend the judgment and to supplement the record, which Safeway opposed. On November 13, 2020, the District Court denied relator's motion, and on
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December 11, 2020, relator filed a notice of appeal. The Seventh Circuit Court of Appeals affirmed the judgment in the Company's favor on April 5, 2022. On August 3, 2022, relators filed a petition seeking review by the U.S. Supreme Court.
In United States ex rel. Schutte and Yarberry v. SuperValu, New Albertson's, Inc., et al., also filed in the Central District of Illinois, the relators allege that defendants (including various subsidiaries of the Company) overcharged federal government healthcare programs by not providing the federal government, as a part of usual and customary prices, the benefit of discounts given to customers who requested that defendants match competitor prices. The complaint was originally filed under seal and amended on November 30, 2015. On August 5, 2019, the District Court granted relators' motion for partial summary judgment, holding that price-matched prices are the usual and customary prices for those drugs. On July 1, 2020, the District Court granted the defendants' motions for summary judgment and dismissed the case, holding that the relator could not prove that defendants acted with the intent required under the FCA. Judgment was issued on July 2, 2020. On July 9, 2020, the relators filed a notice of appeal. On August 12, 2021, the Court of Appeals for the Seventh Circuit affirmed the grant of summary judgment in the Company's favor. On September 23, 2021, the relators filed a petition for rehearing en banc with the Seventh Circuit. On December 3, 2021, the Seventh Circuit denied relators' petition. On April 1, 2022, relators filed a petition seeking review by the U.S. Supreme Court.
The U.S. Supreme Court decided to hear the appeals filed by the relators in Proctor and Schutte. The Supreme Court consolidated the two cases for the purpose of hearing the appeal. The Supreme Court heard oral arguments on April 18, 2023. On June 1, 2023, the Supreme Court issued an opinion adverse to the Company, reversing the lower court's rulings. On July 3, 2023, the Supreme Court issued the order remanding both cases back to the Court of Appeals for the Seventh Circuit for further review. On July 27, 2023, the Court of Appeals remanded both cases back to the U.S. District Court for the Central District of Illinois.
On August 22, 2023, the District Court - as to Schutte - set a pretrial conference for March 4, 2024, and a trial date of April 29, 2024. At the same July 27 hearing, the District Court also gave the defendants leave to file motions for summary judgment on a schedule to be agreed upon. On October 11, 2023, the Company and co-defendant filed a motion for summary judgment. On the same day, the relators filed motions for partial summary judgment. On February 16, 2024, the Company and co-defendant filed a motion to reconsider a prior grant of partial summary judgment against the defendants, and also a motion to continue the trial. On February 27, 2024, the District Court granted the motion to continue and vacated the April 29, 2024 trial date. On April 26, 2024, the District Court denied the motion for reconsideration of partial summary judgment. On May 20, 2024, the District Court heard oral argument on the pending motions for summary judgment. On September 30, 2024, the District Court denied both parties' motions for summary judgment on scienter and granted relators' motion for summary judgment on materiality. On November 18, 2024, the District Court denied a motion by the Company to reconsider the materiality ruling or certify that ruling for an interlocutory appeal. The Schutte trial began on February 10, 2025. On March 4, 2025, the Company prevailed at trial and the District Court entered judgment in favor of the Company on March 12, 2025. On April 1, 2025, the relators filed a motion to amend the judgment and grant a new trial on damages. On October 31, 2025, the Court denied this motion, and the relators have appealed the denial of the motion. Oral argument on the appeal is set for November 10, 2026.
The Company requested a stay in Proctor while Schutte is on appeal. In response, the Court vacated all dates in Proctor and ordered the parties to attend a settlement conference. The case has not settled and the Court has stayed Proctor pending the Schutte appeal.
In both of the above cases, the federal government previously investigated the relators' allegations and declined to intervene. The relators elected to pursue their respective cases on their own and in each case have alleged FCA damages in excess of $100.0 million before trebling and excluding penalties. The Company is vigorously defending each of these matters. The Company has recorded an estimated liability for these matters.
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Pharmacy Benefit Manager (PBM) Litigation: The Company (including its subsidiary, Safeway Inc.) is a defendant in a lawsuit filed on January 21, 2021, in Minnesota state court, captioned Health Care Service Corp. et al. v. Albertsons Companies, LLC, et al. The action challenges certain prescription-drug prices reported by the Company to a pharmacy benefit manager, Prime Therapeutics LLC ("Prime"), which in turn contracted with the health-insurer plaintiffs to adjudicate and process prescription-drug reimbursement claims.
On December 7, 2021, the Company filed a motion to dismiss the complaint. On January 14, 2022, the court denied the Company's motion to dismiss as to all but one count, plaintiffs' claim of negligent misrepresentation. On January 21, 2022, the Company and co-defendant SUPERVALU, Inc. ("SUPERVALU") filed a third-party complaint against Prime, asserting various claims, including: indemnification, fraud and unjust enrichment. On February 17, 2022, the Company filed in the Minnesota Court of Appeals an interlocutory appeal of the denial of their motion to dismiss on personal jurisdiction grounds (the "Jurisdictional Appeal"). On February 24, 2022, the Company and SUPERVALU filed in the trial court an unopposed motion to stay proceedings, pending the resolution of the Jurisdictional Appeal. The parties agreed on March 6, 2022, to an interim stay in the trial court pending a ruling on the unopposed motion to stay proceedings. On September 6, 2022, the Minnesota Court of Appeals denied the Jurisdictional Appeal and affirmed the trial court’s denial of the Company’s motion to dismiss. On October 6, 2022, the Company and SUPERVALU filed a petition seeking review by the Minnesota Supreme Court. On November 23, 2022, the Minnesota Supreme Court denied that petition. The Company and co-defendant SUPERVALU filed an answer to the complaint on January 23, 2023. On March 9, 2023, Prime moved to dismiss the third-party complaint filed by the Company and SUPERVALU. The court heard oral arguments on the motion on May 11, 2023. On August 9, 2023, the court denied Prime's motion as to 16 of the 17 counts in the third-party complaint, and dismissed one count without prejudice. On September 18, 2023, the Company and SUPERVALU filed an amended third-party complaint, which repleaded the one count that had been dismissed (in addition to the other claims asserted in the initial third-party complaint). On October 2, 2023, Prime filed an answer to the amended third-party complaint. The proceedings were stayed through September 29, 2025 to facilitate settlement discussions. The case is currently scheduled to be ready for trial on or after April 19, 2027. On October 9, 2025, the Company, SUPERVALU, and Prime filed a stipulated motion requesting the dismissal of Prime from the litigation, which was approved by the Court on October 10, 2025, thus dismissing Prime.
The Company is vigorously defending the claims filed against it. The Company has recorded an estimated liability for this matter.
Opioid Litigation: The Company is one of dozens of companies that have been named as defendants in lawsuits filed by various plaintiffs, including states, counties, cities, Native American tribes, and hospitals, alleging that defendants contributed to the national opioid epidemic. At present, the Company is a named defendant in approximately 81 suits pending in various state and federal courts including the United States District Court for the Northern District of Ohio, where over 2,000 cases against various defendants have been consolidated as Multi-District Litigation ("MDL") pursuant to 28 U.S.C. §1407. All of the MDL cases naming the Company have been stayed except for two so called "bellwether" actions in Tarrant County (Texas) and Monterey County (California). Discovery has been completed on Tarrant County's liability claim and the matter has been remanded to the Northern District of Texas for trial. On July 25, 2025, the Company filed a motion with the Court seeking to certify for interlocutory appeal an order denying its Motion for Summary Judgment, which is fully briefed and pending before the Court. Discovery in Monterey County (California) is ongoing. The County of Monterey matter is stayed by agreement of the parties. The relief sought by the various plaintiffs in these matters includes compensatory damages, abatement and punitive damages as well as injunctive relief. On July 30, 2024, multiple plaintiffs filed an Omnibus Motion for Leave to Amend complaints, seeking leave from the MDL court to add the Company to over 150 additional lawsuits. The Company filed its response to the Omnibus Motion on January 16, 2025. In the reply filed by the plaintiffs on July 2, 2025, the number of additional lawsuits was reduced to approximately 108 suits. The Motion remains pending before the Court.
Prior to the start of a state-court trial that was scheduled for September 6, 2022, the Company reached an agreement to settle with the State of New Mexico. The New Mexico counties and municipal entities that filed 14 additional
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lawsuits, including Santa Fe County, agreed to the terms of the settlement. Thus, all 15 cases filed by New Mexico entities have been dismissed as a result of the settlement. The Company executed an agreement to settle three matters that were filed in Nevada. The Company recorded a liability of $21.5 million for the settlements of the cases in New Mexico and Nevada which was paid by its insurers in the fourth quarter of fiscal 2022. With respect to the three active state court claims, those matters are in Dallas County (Texas), the State of Washington and the City of Philadelphia (Pennsylvania). On July 13, 2026, trial began for the State of Washington matter. The Company requested an interlocutory appeal with the City of Philadelphia matter, which was granted on November 26, 2024. The City of Philadelphia appeal was heard on July 15, 2025, and the Company awaits the Court's ruling. The Dallas County matter has a trial-ready date of September 8, 2026. Following the denial of its preliminary objections, the Company sought interlocutory review with the Superior Court. The Superior Court affirmed the denial of the Company's preliminary objections. The Company has filed an application for re-argument. The Company believes that it has substantial factual and legal defenses to these claims, and is vigorously defending these matters.
On April 14, 2026, the Company announced that it reached a settlement framework to resolve substantially all of the opioid-related claims that have been or may be asserted against the Company by participating states, political subdivisions, and Native American tribes (the "Opioid Settlement Framework"). Subject to the completion of certain non‑monetary terms that are currently under negotiation, the Company has agreed to make remediation payments of up to $655.1 million to participating states and political subdivisions and $21.7 million to participating Native American tribes for abatement‑related initiatives, and approximately $97.0 million for attorneys’ fees and costs. Participating states, political subdivisions, and Native American tribes will have an opportunity to opt into the Opioid Settlement Framework. The Company retains discretion to determine whether participation levels are sufficient for the settlement framework to become effective. The Opioid Settlement Framework, subject to the completion of all required terms and conditions, would provide for the resolution of all claims asserted by participating states, political subdivisions, and Native American tribes and is being entered into without any admission of liability or wrongdoing by the Company.
As a result of the Opioid Settlement Framework, the Company concluded that a loss related to the settlement of opioid‑related claims was probable and for which the related loss was reasonably estimable. Accordingly, in the fourth quarter of fiscal 2025, the Company recorded a loss of $773.8 million ($599.8 million, net of tax) related to the Opioid Settlement Framework, included as a component of Selling and administrative expenses. These related payments are expected to be made over a period of nine years , with slightly more than one-third of the total amount payable within the first two years and the remainder payable over the following seven years . The first payment of $136.6 million is segregated in an interest bearing account recorded in Cash and cash equivalents as of June 20, 2026 and will be paid upon reaching a final settlement agreement. As of June 20, 2026, the Company recorded $273.1 million and $500.7 million of the estimated liability in Other current liabilities and Other long-term liabilities, respectively, in the Consolidated Balance Sheets. As of February 28, 2026, the Company recorded $136.6 million and $637.2 million of the estimated liability in Other current liabilities and Other long-term liabilities, respectively, in the Consolidated Balance Sheets.
Loss contingencies are inherently uncertain and require significant judgment, and unfavorable developments may occur. The Opioid Settlement Framework remains in its early stages, and there is no assurance that the required parties will reach a definitive agreement or satisfy any related conditions. Accordingly, actual losses may differ materially from the Company’s estimated liability.
The Opioid Settlement Framework does not include the State of Washington. The Company continues to vigorously defend this matter and believes that it has substantial factual and legal defenses. At this stage in the proceedings, the Company is unable to determine the probability of the outcome of this matter or the range of reasonably possible loss.
The Company has also received subpoenas, Civil Investigative Demands and other requests for documents and information from the U.S. Department of Justice ("DOJ") and certain state Attorneys General, and has had preliminary discussions with the DOJ with respect to purported violations of the federal Controlled Substances Act
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and the FCA in dispensing prescriptions. The Company has been cooperating with the government with respect to these requests for information.
Termination of the Merger Agreement: As previously disclosed, on October 13, 2022, the Company, The Kroger Co. ("Kroger") and Kettle Merger Sub, Inc., a wholly owned subsidiary of Kroger ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub would have been merged with and into the Company (the "Merger"), with the Company surviving the Merger as the surviving corporation and a direct, wholly owned subsidiary of Kroger.
As previously disclosed, On December 10, 2024, the United States District Court for the District of Oregon issued a preliminary injunction in the case Federal Trade Commission et al. v. The Kroger Company and Albertsons Companies, Inc. (Case No.: 3:24-cv-00347-AN), whereby the court enjoined the consummation of the Merger. A permanent injunction was issued, also on December 10, 2024, by a state court judge in a lawsuit brought against Kroger and the Company by the State of Washington, in the case State of Washington v. The Kroger Company and Albertsons Companies, Inc., King County Superior Court, Washington (Case No. 24-2-00977-9 SEA). In light of the injunctions, and in accordance with Section 8.1(e) of the Merger Agreement, the Company exercised its right to terminate the Merger Agreement and sent a notice to Kroger on December 10, 2024 terminating the Merger Agreement.
Following the Company's termination of the Merger Agreement, on December 10, 2024, the Company filed a lawsuit against Kroger in the Court of Chancery in the State of Delaware, bringing claims for willful breach of the Merger Agreement and breach of the covenant of good faith and fair dealing arising from Kroger's failure to exercise "best efforts" and to take "any and all actions" to secure regulatory approval, as was required of Kroger under the terms of the Merger Agreement. The Company is seeking damages in an amount to be determined at trial, in addition to the $600 million termination fee which Kroger is already obligated to pay to the Company under the Merger Agreement.
On December 11, 2024, Kroger delivered a termination notice to the Company, alleging that the Company's December 10, 2024 termination notice was not effective and that Kroger had no obligation to pay the $600 million termination fee because the Company allegedly failed to perform and comply in all material respects with its covenants under the Merger Agreement. On March 25, 2025, Kroger answered the Company's lawsuit and brought counterclaims against the Company in connection with the Company's alleged failure to perform under the Merger Agreement. The Company filed its answers to Kroger's counterclaims on May 17, 2025 and the parties are presently engaged in discovery. Trial is scheduled to begin on October 19, 2026.
On August 19, 2025, the Court in the State of Washington's case against Kroger and the Company awarded the State $28.4 million in attorneys' fees and costs as the prevailing party, with post-judgment interest accruing at 12 %. The judgment was entered jointly and severally against Kroger and the Company. Kroger and the Company disagree with the Court's decision in awarding the State of Washington its attorneys' fees and costs, and the decision is being appealed. Kroger has filed a supersedeas bond with respect to the judgment for purposes of the appeal. The Company believes, based on the terms of the Merger Agreement, that Kroger is solely responsible for the full payment of the judgment and, accordingly, the Company has not recorded an estimated liability.
Other Commitments
In the ordinary course of business, the Company enters into various supply contracts for goods and contracts for fixed assets and information technology. These contracts typically include volume commitments or fixed expiration dates, termination provisions and other standard contractual considerations.
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NOTE 6 - OTHER COMPREHENSIVE INCOME OR LOSS
Total comprehensive earnings are defined as all changes in stockholders' equity during a period, other than those from investments by or distributions to the stockholders. Generally, for the Company, total comprehensive income equals net income plus or minus adjustments for pension and other post-retirement liabilities. Total comprehensive earnings represent the activity for a period, net of tax.
While total comprehensive earnings are the activity in a period and are largely driven by net earnings in that period, accumulated other comprehensive income or loss ("AOCI") represents the cumulative balance of other comprehensive income, net of tax, as of the balance sheet date. Changes in the AOCI balance by component are shown below (in millions):
| 16 weeks ended June 20, 2026 | |||||||||||||||||
| Total | Pension and Post-retirement benefit plans | Other | |||||||||||||||
| Beginning AOCI balance | $ | $ | $ | ||||||||||||||
| Other comprehensive loss before reclassifications | ( | ( | |||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (1) | ( | ( | |||||||||||||||
| Tax benefit | |||||||||||||||||
| Current-period other comprehensive loss, net of tax | ( | ( | ( | ||||||||||||||
| Ending AOCI balance | $ | $ | $ | ( | |||||||||||||
| 16 weeks ended June 14, 2025 | |||||||||||||||||
| Total | Pension and Post-retirement benefit plans | Other | |||||||||||||||
| Beginning AOCI balance | $ | $ | $ | ||||||||||||||
| Other comprehensive income before reclassifications | |||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (1) | ( | ( | |||||||||||||||
| Tax benefit (expense) | ( | ||||||||||||||||
| Current-period other comprehensive (loss) income, net of tax | ( | ( | |||||||||||||||
| Ending AOCI balance | $ | $ | $ | ||||||||||||||
NOTE 7 - SEGMENT INFORMATION
The Company and its subsidiaries offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel and other items and services in its stores or through digital channels. The Company's retail operating divisions are geographically based, have similar economic characteristics and similar expected long-term financial performance. The Company's operating segments and reporting units are its operating divisions, which are reported in one reportable segment. Each reporting unit constitutes a business for which discrete financial information is available and for which the Chief Operating Decision Maker ("CODM"), the Company's Chief Executive Officer, regularly reviews the operating results and makes key operating decisions on how to allocate resources. Across all operating segments, the Company operates primarily one store format. Each division offers, through its stores and digital channels, the same general mix of products with similar pricing to similar categories of customers, has
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similar distribution methods, operates in similar regulatory environments and purchases merchandise from similar or the same vendors.
The CODM evaluates performance and allocates resources using Retail segment EBITDA, defined as earnings (net loss) before interest, income taxes, depreciation and amortization, adjusted to eliminate the effects of items management does not consider in assessing segment performance. The CODM uses Retail segment EBITDA as its principal measure of segment performance to evaluate the Company's operating results and effectiveness of its strategies and to monitor budget versus actual results.
The CODM is not provided asset information by operating segment as asset information is provided to the CODM on a consolidated basis. No customer accounts for 10% or more of the Company's revenues. Substantially all of the Company's revenues are generated in the U.S. and its long-lived assets are predominantly located within the U.S. The accounting policies of the reportable segment generally align with those described in the Company’s summary of significant accounting policies contained in Note 1, except certain classification differences that are not material for all periods presented.
The following table presents segment information for Net sales and other revenue, significant segment expenses and Retail segment EBITDA (in millions):
| 16 weeks ended | |||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||
| Retail segment sales | $ | $ | |||||||||
| Other revenue (1) | |||||||||||
| Net sales and other revenue | $ | $ | |||||||||
| Retail segment expenses: | |||||||||||
| Merchandise costs, including advertising, distribution and freight | |||||||||||
| Employee costs (2) | |||||||||||
| Other segment expenses (3) | |||||||||||
| Retail segment EBITDA | $ | $ | |||||||||
| Reconciliation to Income before income taxes: | |||||||||||
| Corporate adjustments (4) | ( | ( | |||||||||
| Depreciation and amortization | ( | ( | |||||||||
| Interest expense, net | ( | ( | |||||||||
| Business transformation (5) | ( | ( | |||||||||
| Equity-based compensation expense | ( | ( | |||||||||
| Gain on property dispositions and impairment losses, net | |||||||||||
| LIFO expense | ( | ( | |||||||||
| Merger-related costs (6) | ( | ( | |||||||||
| Certain legal and regulatory accruals and settlements, net | ( | ( | |||||||||
| Miscellaneous adjustments (7) | ( | ||||||||||
| Income before income taxes | $ | $ | |||||||||
(1) Primarily includes wholesale sales to third parties and other miscellaneous revenue not included in Retail segment sales.
(2) Includes wages, salaries, benefits, insurance and other employee-related costs.
(3) Primarily includes rent and occupancy costs, debit and credit card fees, supplies, divisional support costs and allocated corporate costs.
(4) Primarily includes bonus compensation, unallocated corporate costs and contribution from the Company's wholesale and other sales.
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(5) Includes costs related to the Company's business transformation, including third-party consulting fees and certain integration and employee termination costs.
(6) Primarily includes litigation costs related to the terminated merger. The first quarter of fiscal 2025 also includes retention program expense related to the terminated merger.
(7) Primarily includes adjustments for closed stores and surplus properties, net realized and unrealized gains and losses related to non-operating investments, non-cash rent expense, gains and losses on energy hedges and other items not allocated to the segment.
NOTE 8 - NET INCOME PER CLASS A COMMON SHARE
Basic net income per Class A common share is computed by dividing net income by the weighted average number of Class A common shares outstanding for the period, including Class A common shares to be issued with no remaining contingencies prior to issuance. Diluted net income per Class A common share is computed based on the weighted average number of shares of Class A common stock outstanding during the period, adjusted for the potentially dilutive effect of unvested restricted stock units ("RSUs") calculated under the treasury stock method. Performance-based RSUs are considered dilutive when the related performance criterion has been met.
The components of basic and diluted net income per Class A common share were as follows (in millions, except per share data):
| 16 weeks ended | |||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||
| Net income | $ | $ | |||||||||
| Weighted average Class A common shares outstanding - Basic (1) | |||||||||||
| Dilutive effect of restricted stock units | |||||||||||
| Weighted average Class A common shares outstanding - Diluted (2) | |||||||||||
| Basic net income per Class A common share | $ | $ | |||||||||
| Diluted net income per Class A common share | $ | $ | |||||||||
(1) The number of Class A common shares remaining to be issued for the 16 weeks ended June 20, 2026 and June 14, 2025 were not material.
(2) The number of potential Class A common shares outstanding related to RSUs that were antidilutive for the 16 weeks ended June 20, 2026 and June 14, 2025 were not material.
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING STATEMENTS AND FACTORS THAT IMPACT OUR OPERATING RESULTS AND TRENDS
This Form 10-Q contains "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:
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•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 including those resulting from macroeconomic conditions such as inflation and 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 including armed hostilities, acts of war and disruption in the distribution of goods;
•our ability to succeed in a competitive environment;
•our ability to execute on our business and value-creating strategies, including our operating structure realignment;
•our ability to attract and retain qualified or specialized associates who are critical to the success of our business strategy;
•failure to achieve productivity initiatives, including those related to artificial intelligence, 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 Form 10-Q reflect our view only as of the date of this Form 10-Q. 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.
As used in this Form 10-Q, unless the context otherwise requires, references to "Albertsons," the "Company," "we," "us" and "our" refer to Albertsons Companies, Inc. and, where appropriate, its subsidiaries.
NON-GAAP FINANCIAL MEASURES
We define EBITDA as GAAP earnings (net loss) before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as earnings (net loss) before interest, income taxes, depreciation and amortization, further adjusted to eliminate the effects of items management does not consider in assessing our ongoing core performance. We define Adjusted net income as GAAP Net income adjusted to eliminate the effects of items management does not consider in assessing our ongoing core performance. We define Adjusted net income per Class A common share as Adjusted net income divided by the weighted average diluted Class A common shares outstanding, as adjusted to
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reflect all RSUs outstanding at the end of the period. See "Results of Operations" for further discussion and a reconciliation of Adjusted EBITDA, Adjusted net income and Adjusted net income per Class A common share.
EBITDA, Adjusted EBITDA, Adjusted net income and Adjusted net income per Class A common share (collectively, the "Non-GAAP Measures") are performance measures that provide supplemental information we believe is useful to analysts and investors to evaluate our 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 our ongoing core operating performance, and thereby provide useful measures to analysts and investors of our 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 our results of operations may be impacted by such differences. We also use Adjusted EBITDA for board of director and bank compliance reporting. Our presentation of Non-GAAP Measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
Non-GAAP Measures should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using Non-GAAP Measures only for supplemental purposes.
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FIRST QUARTER OF FISCAL 2026 OVERVIEW
We are one of the largest food retailers in the United States, with 2,240 stores across 35 states and the District of Columbia as of June 20, 2026. We operate 22 well known banners including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, ACME, Shaw's, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Markets and Balducci's Food Lovers Market, with approximately 275,000 talented and dedicated employees, as of June 20, 2026, who serve on average 36.5 million customers each week. Additionally, as of June 20, 2026, we operated 1,708 pharmacies, 1,238 in-store branded coffee shops, 408 associated fuel centers, 22 dedicated distribution centers, 19 manufacturing facilities and various digital platforms.
During the first quarter of fiscal 2026, we continued to execute our business strategy, including investments in our digital and loyalty platforms, media business, customer value proposition, technology capabilities, and productivity initiatives. Our growth initiatives remain focused on eCommerce, loyalty, pharmacy and health offerings, and digital tools that support both online and in-store customer experiences.
On July 23, 2026, we announced ACI Edge, an operating structure realignment intended to simplify operations, increase accountability, and more effectively leverage enterprise scale. As part of the realignment, we consolidated our 11 divisions into four regions and centralized center-store merchandising under a single enterprise team. The new structure aligns category management, supplier management, and merchandising functions across the enterprise and is intended to improve consistency and execution across banners and regions.
Identical sales, excluding fuel, decreased 0.8% during the first quarter of fiscal 2026. Digital sales, including Drive Up & Go curbside pickup and home delivery, increased 13% compared to the first quarter of fiscal 2025. Flash delivery continued to be the fastest-growing component of our digital offering during the quarter, and we continued to build our digital capabilities, personalization tools, and fulfillment operations. Our media business also grew during the quarter, driven primarily by increased monetization of existing and new advertising placements. During the quarter, we expanded our advertising offerings through the introduction of branded entertainment solutions for advertising partners.
We continue to invest in our customer value proposition through a combination of pricing, Own Brands offerings, personalized promotions, digital capabilities, and improving the customer experience. In response to a more pressured unit environment and increasingly value-conscious consumers, we are accelerating execution and making targeted investments in our customer value proposition. These investments are intended to improve customer engagement, traffic and unit trends, and strengthen customer loyalty over time.
Technology and artificial intelligence capabilities continue to be advanced across multiple areas of the business. Following the ACI Edge operating structure realignment, we expect to deploy technology-enabled tools and operating practices more consistently across the enterprise. During the quarter, we continued to enhance customer-facing digital capabilities by building AI-powered experiences that we believe will improve engagement, increase basket size, and create a more seamless shopping journey. Within supply chain operations, we are expanding the use of advanced analytics and machine learning to support forecasting, inventory management, and replenishment processes.
Our capital allocation strategy balances investing for the future, strengthening our balance sheet and returns to shareholders through a combination of dividends and opportunistic share repurchases. Capital expenditures were approximately $522 million for the first quarter of fiscal 2026, primarily including the completion of 15 remodels, the opening of four new stores and continued investment in our digital and technology platforms. On April 14, 2026, we increased the quarterly cash dividend from $0.15 per common share to $0.17 per common share. Also on April 14, 2026, we increased the remaining share repurchase authorization to $2.0 billion in total. Capital returns to
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shareholders during the first quarter of fiscal 2026 included $84.0 million of common stock dividends ($0.17 per common share) and the repurchase of 13.4 million shares of common stock for a total of $226.5 million.
First quarter of fiscal 2026 highlights
In summary, our financial and operating highlights for the first quarter of fiscal 2026 include:
•Identical sales decreased 0.8%
•Digital sales increased 13%
•Net income of $85 million, or $0.17 per Class A common share
•Adjusted net income of $210 million, or $0.42 per Class A common share
•Adjusted EBITDA of $1,013 million
Stores
The following table shows stores operating, acquired, opened and closed during the periods presented:
| 16 weeks ended | |||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||
| Stores, beginning of period | 2,244 | 2,270 | |||||||||
| Acquired | 2 | — | |||||||||
| Opened | 4 | 3 | |||||||||
| Closed | (10) | (9) | |||||||||
| Stores, end of period | 2,240 | 2,264 | |||||||||
The following table summarizes our stores by size:
| Number of stores | Percent of Total | Retail Square Feet (1) | ||||||||||||||||||||||||||||||||||||
| Square Footage | June 20, 2026 | June 14, 2025 | June 20, 2026 | June 14, 2025 | June 20, 2026 | June 14, 2025 | ||||||||||||||||||||||||||||||||
| Less than 30,000 | 206 | 211 | 9.2 | % | 9.3 | % | 4.7 | 4.8 | ||||||||||||||||||||||||||||||
| 30,000 to 50,000 | 761 | 773 | 34.0 | % | 34.2 | % | 31.9 | 32.4 | ||||||||||||||||||||||||||||||
| More than 50,000 | 1,273 | 1,280 | 56.8 | % | 56.5 | % | 75.2 | 75.6 | ||||||||||||||||||||||||||||||
| Total stores | 2,240 | 2,264 | 100.0 | % | 100.0 | % | 111.8 | 112.8 | ||||||||||||||||||||||||||||||
(1) In millions, reflects total square footage of retail stores operating at the end of the period.
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RESULTS OF OPERATIONS
Comparison of the First Quarter of Fiscal 2026 to the First Quarter of Fiscal 2025.
The following tables and related discussion set forth certain information and comparisons regarding the components of our Condensed Consolidated Statements of Operations for the 16 weeks ended June 20, 2026 ("first quarter of fiscal 2026") and 16 weeks ended June 14, 2025 ("first quarter of fiscal 2025") (dollars in millions, except per share data).
| 16 weeks ended | |||||||||||||||||||||||
| June 20, 2026 | % of Sales | June 14, 2025 | % of Sales | ||||||||||||||||||||
Net sales and other revenue | $ | 24,941.6 | 100.0 | % | $ | 24,880.8 | 100.0 | % | |||||||||||||||
Cost of sales | 18,303.5 | 73.4 | 18,142.5 | 72.9 | |||||||||||||||||||
| Gross margin | 6,638.1 | 26.6 | 6,738.3 | 27.1 | |||||||||||||||||||
Selling and administrative expenses | 6,379.2 | 25.6 | 6,320.9 | 25.4 | |||||||||||||||||||
| Gain on property dispositions and impairment losses, net | (4.7) | — | (31.9) | (0.1) | |||||||||||||||||||
| Operating income | 263.6 | 1.0 | 449.3 | 1.8 | |||||||||||||||||||
| Interest expense, net | 166.7 | 0.7 | 141.8 | 0.6 | |||||||||||||||||||
| Other income, net | (16.8) | (0.1) | (3.9) | — | |||||||||||||||||||
| Income before income taxes | 113.7 | 0.4 | 311.4 | 1.2 | |||||||||||||||||||
| Income tax expense | 29.0 | 0.1 | 75.0 | 0.3 | |||||||||||||||||||
| Net income | $ | 84.7 | 0.3 | % | $ | 236.4 | 0.9 | % | |||||||||||||||
| Basic net income per Class A common share | $ | 0.17 | $ | 0.41 | |||||||||||||||||||
| Diluted net income per Class A common share | 0.17 | 0.41 | |||||||||||||||||||||
Net Sales and Other Revenue
Net sales and other revenue increased 0.2% to $24,941.6 million for the first quarter of fiscal 2026 from $24,880.8 million for the first quarter of fiscal 2025. The increase in Net sales and other revenue was primarily driven by higher fuel sales, while identical sales declined 0.8%. Pharmacy and digital remained areas of strength, with pharmacy sales continuing to grow despite ongoing Inflation Reduction Act ("IRA") headwinds and digital sales increasing 13% during the first quarter of fiscal 2026.
Identical Sales, Excluding Fuel
Identical sales include stores operating during the same period in both the current year and the prior 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. Acquired stores become identical on the one-year anniversary date of the acquisition. Identical sales for the 16 weeks ended June 20, 2026 and the 16 weeks ended June 14, 2025, respectively, were:
| 16 weeks ended | |||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||
| Identical sales, excluding fuel | (0.8)% | 2.8% | |||||||||
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The following table represents Net sales and other revenue by product type (dollars in millions):
| 16 weeks ended | |||||||||||||||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||||||||||||||
| Amount (1) | % of Total | Amount (1) | % of Total | ||||||||||||||||||||
| Non-perishables (2) | $ | 11,875.7 | 47.6 | % | $ | 12,141.7 | 48.8 | % | |||||||||||||||
| Fresh (3) | 7,883.1 | 31.6 | 7,986.8 | 32.1 | |||||||||||||||||||
| Pharmacy | 3,304.0 | 13.2 | 3,155.0 | 12.7 | |||||||||||||||||||
| Fuel | 1,463.9 | 5.9 | 1,229.9 | 4.9 | |||||||||||||||||||
| Other (4) | 414.9 | 1.7 | 367.4 | 1.5 | |||||||||||||||||||
| Net sales and other revenue | $ | 24,941.6 | 100.0 | % | $ | 24,880.8 | 100.0 | % | |||||||||||||||
(1) Digital related sales are included in the categories to which the revenue pertains.
(2) Consists primarily of general merchandise, grocery, dairy and frozen foods.
(3) Consists primarily of produce, meat, deli and prepared foods, bakery, floral and seafood.
(4) Consists primarily of wholesale sales to third parties, commissions, rental income, media advertising revenue and other miscellaneous revenue.
Gross Margin
Gross margin rate decreased to 26.6% during the first quarter of fiscal 2026 compared to 27.1% during the first quarter of fiscal 2025. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 23 basis points compared to the first quarter of fiscal 2025. This decrease was primarily driven by increases in delivery and handling costs related to the continued growth in digital sales, as well as higher fuel costs. These impacts were partially offset by improvements in pharmacy margins, primarily related to the impact of the IRA. The Company also continued to make incremental investments in its customer value proposition, funded by productivity initiatives.
Selling and Administrative Expenses
Selling and administrative expenses increased to 25.6% of Net sales and other revenue during the first quarter of fiscal 2026 compared to 25.4% of Net sales and other revenue for the first quarter of fiscal 2025. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue increased 42 basis points during the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. This increase in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to increases in rent and occupancy costs, merger-related litigation costs, business transformation costs and depreciation and amortization, partially offset by a decrease in employee costs. Despite disciplined productivity and cost management initiatives, the rate was negatively impacted by lower identical sales, including the effect of the IRA on pharmacy sales growth.
Gain on Property Dispositions and Impairment Losses, Net
For the first quarter of fiscal 2026, net gain on property dispositions and impairment losses was $4.7 million, primarily driven by net gains from the sale of real estate assets. For the first quarter of fiscal 2025, net gain on property dispositions and impairment losses was $31.9 million, primarily driven by $45.5 million of net gains from the sale of real estate assets, partially offset by $11.4 million from the impairment and disposal of certain technology assets and $2.2 million of retail store impairment losses.
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Interest Expense, Net
Interest expense, net was $166.7 million during the first quarter of fiscal 2026 compared to $141.8 million during the first quarter of fiscal 2025. The increase in interest expense, net was primarily attributable to higher average outstanding borrowings.
Other Income, Net
For the first quarter of fiscal 2026, other income, net was $16.8 million compared to other income, net of $3.9 million for the first quarter of fiscal 2025. Other income, net during the first quarter of fiscal 2026 was primarily driven by realized gains from non-operating investments and non-service cost components of net pension and post-retirement income, partially offset by unrealized losses from non-operating investments. Other income, net during the first quarter of fiscal 2025 was primarily driven by non-service cost components of net pension and post-retirement income, partially offset by unrealized losses from non-operating investments.
Income Taxes
Income tax expense was $29.0 million during the first quarter of fiscal 2026, representing a 25.5% effective tax rate. Income tax expense was $75.0 million during the first quarter of fiscal 2025, representing a 24.1% effective tax rate. The increase in the effective income tax rate was primarily driven by the legislative expiration of federal employment tax credits.
Net Income and Adjusted Net Income
Net income was $84.7 million, or $0.17 per Class A common share, during the first quarter of fiscal 2026 compared to $236.4 million, or $0.41 per Class A common share, during the first quarter of fiscal 2025. Adjusted net income was $210.3 million, or $0.42 per Class A common share, during the first quarter of fiscal 2026 compared to $318.9 million, or $0.55 per Class A common share, during the first quarter of fiscal 2025.
Adjusted EBITDA
For the first quarter of fiscal 2026, Adjusted EBITDA was $1,013.2 million, or 4.1% of Net sales and other revenue, compared to $1,111.0 million, or 4.5% of Net sales and other revenue, for the first quarter of fiscal 2025.
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Reconciliation of Non-GAAP Measures
The following table reconciles Net income to Adjusted net income and Adjusted EBITDA (in millions):
| 16 weeks ended | |||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||
| Net income | $ | 84.7 | $ | 236.4 | |||||||
| Adjustments: | |||||||||||
| Business transformation (1)(b) | 54.2 | 38.3 | |||||||||
| Equity-based compensation expense (b) | 31.4 | 33.7 | |||||||||
| Gain on property dispositions and impairment losses, net | (4.7) | (31.9) | |||||||||
| LIFO expense (a) | 20.0 | 17.3 | |||||||||
| Merger-related costs (2)(b) | 41.6 | 19.0 | |||||||||
| Certain legal and regulatory accruals and settlements, net (b) | 1.2 | 2.6 | |||||||||
| Amortization of debt discount and deferred financing costs (c) | 4.8 | 6.2 | |||||||||
| Amortization of intangible assets resulting from acquisitions (b) | 15.7 | 14.8 | |||||||||
| Miscellaneous adjustments (3)(e) | (1.9) | 6.1 | |||||||||
| Tax impact of adjustments to Adjusted net income | (36.7) | (23.6) | |||||||||
| Adjusted net income | $ | 210.3 | $ | 318.9 | |||||||
| Tax impact of adjustments to Adjusted net income | 36.7 | 23.6 | |||||||||
| Income tax expense | 29.0 | 75.0 | |||||||||
| Amortization of debt discount and deferred financing costs (c) | (4.8) | (6.2) | |||||||||
| Interest expense, net | 166.7 | 141.8 | |||||||||
| Amortization of intangible assets resulting from acquisitions (b) | (15.7) | (14.8) | |||||||||
| Depreciation and amortization (d) | 591.0 | 572.7 | |||||||||
| Adjusted EBITDA | $ | 1,013.2 | $ | 1,111.0 | |||||||
The following tables reconcile diluted net income per Class A common share to Adjusted net income per Class A common share (in millions, except per share data):
| 16 weeks ended | |||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||
| Numerator: | |||||||||||
| Adjusted net income (4) | $ | 210.3 | $ | 318.9 | |||||||
| Denominator: | |||||||||||
| Weighted average Class A common shares outstanding - diluted | 498.2 | 575.4 | |||||||||
| Restricted stock units (5) | 8.5 | 8.5 | |||||||||
| Adjusted weighted average Class A common shares outstanding - diluted | 506.7 | 583.9 | |||||||||
| Adjusted net income per Class A common share - diluted | $ | 0.42 | $ | 0.55 | |||||||
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| 16 weeks ended | |||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||
| Net income per Class A common share - diluted | $ | 0.17 | $ | 0.41 | |||||||
| Non-GAAP adjustments (6) | 0.26 | 0.15 | |||||||||
| Restricted stock units (5) | (0.01) | (0.01) | |||||||||
| Adjusted net income per Class A common share - diluted | $ | 0.42 | $ | 0.55 | |||||||
(1) Includes costs related to the Company's business transformation, including third-party consulting fees and certain integration and employee termination costs, as follows (see table below):
| 16 weeks ended | |||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||
| Third-party consulting fees | $ | 32.5 | $ | 33.3 | |||||||
| Integration and employee termination costs | 21.7 | 5.0 | |||||||||
| Total Business transformation | $ | 54.2 | $ | 38.3 | |||||||
(2) Primarily includes litigation costs related to the terminated merger. The first quarter of fiscal 2025 also includes retention program expense related to the terminated merger.
(3) Miscellaneous adjustments include the following (see table below):
| 16 weeks ended | |||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||
| Closed stores and surplus properties | $ | 15.7 | $ | 5.5 | |||||||
| Net realized and unrealized (gain) loss on non-operating investments | (11.9) | 1.3 | |||||||||
| Non-cash lease-related adjustments | (1.7) | — | |||||||||
| Other (i) | (4.0) | (0.7) | |||||||||
| Total miscellaneous adjustments | $ | (1.9) | $ | 6.1 | |||||||
(i) Includes adjustments for the financial impact of other items not considered in our core performance.
(4) See reconciliation of Net income to Adjusted net income above for further details.
(5) Represents incremental unvested RSUs to adjust the diluted weighted average Class A common shares outstanding during each respective period to the fully outstanding RSUs as of the end of each respective period.
(6) Reflects the per share impact of Non-GAAP adjustments for each period. See the reconciliation of Net income to Adjusted net income above for further details.
Non-GAAP adjustment classifications within the Condensed Consolidated Statements of Operations:
(a) Cost of sales
(b) Selling and administrative expenses
(c) Interest expense, net
(d) Depreciation and amortization:
| 16 weeks ended | |||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||
| Cost of sales | $ | 65.3 | $ | 64.1 | |||||||
| Selling and administrative expenses | 525.7 | 508.6 | |||||||||
| Total Depreciation and amortization | $ | 591.0 | $ | 572.7 | |||||||
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(e) Miscellaneous adjustments:
| 16 weeks ended | |||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||
| Cost of sales | $ | (5.1) | $ | (0.5) | |||||||
| Selling and administrative expenses | 13.7 | 5.6 | |||||||||
| Other income, net | (10.5) | 1.0 | |||||||||
| Total Miscellaneous adjustments | $ | (1.9) | $ | 6.1 | |||||||
LIQUIDITY AND CAPITAL RESOURCES
The following table sets forth the major sources and uses of cash and cash equivalents and restricted cash for each period (in millions):
| 16 weeks ended | |||||||||||
| June 20, 2026 | June 14, 2025 | ||||||||||
| Cash and cash equivalents and restricted cash at end of period | $ | 295.0 | $ | 155.3 | |||||||
| Cash flows provided by operating activities | 728.9 | 754.4 | |||||||||
| Cash flows used in investing activities | (507.7) | (474.1) | |||||||||
| Cash flows used in financing activities | (129.2) | (422.9) | |||||||||
Net Cash Provided by Operating Activities
Net cash provided by operating activities was $728.9 million for the first quarter of fiscal 2026 compared to $754.4 million for the first quarter of fiscal 2025. The decrease in cash flow from operations compared to the first quarter of fiscal 2025 was primarily driven by a decrease in Adjusted EBITDA and increases in cash paid for interest, as well as higher merger-related and business transformation costs, partially offset by changes in working capital and lower cash paid for indirect taxes during the first quarter of fiscal 2026.
Net Cash Used in Investing Activities
Net cash used in investing activities was $507.7 million for the first quarter of fiscal 2026 compared to $474.1 million for the first quarter of fiscal 2025.
For the first quarter of fiscal 2026, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $522.1 million and the Hames acquisition of $28.0 million, partially offset by proceeds from the sale of assets of $25.8 million, primarily related to real estate. Payments for property, equipment and intangibles in the first quarter of fiscal 2026 included the completion of 15 remodels, the opening of four new stores and continued investment in our digital and technology platforms.
For the first quarter of fiscal 2025, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $584.6 million, partially offset by proceeds from the sale of assets of $78.2 million, primarily related to real estate. Payments for property, equipment and intangibles in the first quarter of fiscal 2025 included the completion of 36 remodels, the opening of three new stores and continued investment in our digital and technology platforms.
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Net Cash Used in Financing Activities
Net cash used in financing activities was $129.2 million during the first quarter of fiscal 2026 compared to net cash used in financing activities of $422.9 million during the first quarter of fiscal 2025.
Net cash used in financing activities during the first quarter of fiscal 2026 consisted primarily of the repurchase of common stock, dividends paid on our Class A common stock, payments on long-term borrowings and tax withholding payments on vesting of RSUs, partially offset by $275.0 million of proceeds from the issuance of long-term debt under the ABL Facility.
Net cash used in financing activities during the first quarter of fiscal 2025 consisted primarily of the repurchase of common stock, dividends paid on our Class A common stock and tax withholding payments on vesting of RSUs, partially offset by $25.0 million of proceeds from the ABL Facility. Proceeds from the issuance of long-term debt and payments on long-term borrowings also included a $600 million issuance and subsequent $600 million redemption of senior unsecured notes.
Debt Management
As of June 20, 2026, there was $700.0 million outstanding under our ABL Facility and total availability of $3,287.4 million (net of letter of credit usage).
We repaid the remaining $56.5 million in aggregate principal amount outstanding of New Albertsons L.P.'s 7.75% Notes due 2026 on their maturity date, June 15, 2026.
Dividends
We have established a dividend policy pursuant to which we intend to pay a quarterly dividend on our Class A common stock. On April 14, 2026, the Board of Directors (the "Board") increased the quarterly cash dividend 13% from $0.15 per common share to $0.17 per common share. Cash dividends paid on our Class A common stock were $84.0 million ($0.17 per common share) and $85.7 million ($0.15 per common share) during the first quarter of fiscal 2026 and first quarter of fiscal 2025, respectively. On July 14, 2026, we announced the next quarterly dividend payment of $0.17 per share of Class A common stock to be paid on August 7, 2026 to stockholders of record as of the close of business on July 24, 2026.
Common Stock Repurchase Program
On April 14, 2026, the Board increased the remaining share repurchase authorization to $2.0 billion in total. The share repurchase program could include open market repurchases, accelerated share repurchase programs, tender offers, block trades, potential privately negotiated transactions, or trading plans in compliance with the federal securities laws. During the first quarter of fiscal 2026, we repurchased 13.4 million shares of common stock for a total of $226.5 million pursuant to the existing multi-year repurchase authorization.
Liquidity
Based on current operating trends, we believe that we have significant sources of cash to meet our liquidity needs for the next 12 months and for the foreseeable future, including cash on hand, cash flows from operating activities and other sources of liquidity, including the ABL Facility. We estimate our liquidity needs over the next 12 months to be in the range of $6.0 billion to $6.7 billion. This includes $700.0 million related to the outstanding borrowings under our ABL Facility for which we may, at our discretion, elect to pay all or a portion of the outstanding balance within the next 12 months, and anticipated requirements for working capital, capital expenditures, pension obligations, interest payments and scheduled principal payments of debt, operating leases, finance leases, legal settlements, quarterly dividends on Class A common stock and common stock repurchases. In addition, we may
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enter into refinancing and sale leaseback transactions from time to time. We believe we have adequate cash flow to continue to maintain our current debt ratings and to respond effectively to competitive conditions.
CRITICAL ACCOUNTING POLICIES
The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. We have chosen accounting policies that we believe are appropriate to report accurately and fairly our operating results and financial position, and we apply those accounting policies in a fair and consistent manner. See the Critical Accounting Policies section included in our Annual Report on Form 10-K for the fiscal year ended February 28, 2026, filed with the SEC on April 27, 2026, for a discussion of our significant accounting policies.
RECENTLY ISSUED AND RECENTLY ADOPTED ACCOUNTING STANDARDS
See Note 1 - Basis of Presentation and Summary of Significant Accounting Policies of our unaudited interim Condensed Consolidated Financial Statements located elsewhere in this Form 10-Q.
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in our exposure to market risk from the information provided in our Annual Report on Form 10-K for the fiscal year ended February 28, 2026, filed with the SEC on April 27, 2026.
Item 4 - Controls and Procedures
Based on their evaluation of our disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934 (the "Exchange Act")) as of the end of the period covered by this Form 10-Q, our Principal Executive Officer and Principal Financial Officer concluded our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the first quarter of fiscal 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
The Company is subject from time to time to various claims and lawsuits arising in the ordinary course of business, including lawsuits involving trade practices, lawsuits alleging violations of state and/or federal wage and hour laws (including alleged violations of meal and rest period laws and alleged misclassification issues), real estate disputes and other matters. Some of these claims or suits purport or may be determined to be class actions and/or seek substantial damages. It is the opinion of the Company's management that although the amount of liability with respect to certain of the matters described in this Form 10-Q cannot be ascertained at this time, any resulting liability of these and other matters, including any punitive damages, will not have a material adverse effect on the Company's business or overall financial condition. See the matters under the caption Legal Proceedings in Note 5 - Commitments and Contingencies and Off Balance Sheet Arrangements in the unaudited interim Condensed Consolidated Financial Statements located elsewhere in this Form 10-Q.
The Company continually evaluates its exposure to loss contingencies arising from pending or threatened litigation and believes it has made provisions where the loss contingency is probable and can be reasonably estimated. Nonetheless, assessing and predicting the outcomes of these matters involves substantial uncertainties. While management currently believes that the aggregate estimated liabilities currently recorded are reasonable, it remains possible that differences in actual outcomes or changes in management's evaluation or predictions could arise that could be material to the Company's results of operations or cash flows.
Environmental Matters
Our operations are subject to regulation under environmental laws, including those relating to waste management, air emissions and underground storage tanks. In addition, as an owner and operator of commercial real estate, we may be subject to liability under applicable environmental laws for clean-up of contamination at our facilities. SEC regulations require us to disclose certain environmental matters arising under federal, state or local environmental provisions if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. Pursuant to SEC regulations, we use a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required.
Item 1A - Risk Factors
There have been no material changes to the risk factors previously included in our Annual Report on Form 10-K for the fiscal year ended February 28, 2026, filed with the SEC on April 27, 2026, under the heading "Risk Factors".
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
(a) Unregistered Sales of Equity Securities
None.
(b) Use of Proceeds
None.
(c) Purchases of Equity Securities
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Share repurchase activity during the first quarter of fiscal 2026 was as follows:
| Period | Total Number of Shares Purchased | Average Price Paid per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in millions) (1)(2) | ||||||||||||||||||||||
| March 1, 2026 through March 28, 2026 | 4,458,400 | $ | 17.28 | 4,458,400 | $ | 1,112.2 | ||||||||||||||||||||
| March 29, 2026 through April 25, 2026 | 3,236,614 | 17.21 | 3,236,614 | 1,956.5 | ||||||||||||||||||||||
| April 26, 2026 through May 23, 2026 | 2,966,804 | 16.47 | 2,966,804 | 1,907.7 | ||||||||||||||||||||||
| May 24, 2026 through June 20, 2026 | 2,763,985 | 15.68 | 2,763,985 | 1,864.3 | ||||||||||||||||||||||
| Total | 13,425,803 | $ | 16.75 | 13,425,803 | $ | 1,864.3 | ||||||||||||||||||||
(1) Excludes excise tax on share repurchases in excess of issuances, which is included as part of the cost basis of the shares acquired.
(2) On December 11, 2024, the Board authorized a multi-year share repurchase program of up to $2.0 billion of the Company's common stock. The share repurchase program could include open market repurchases, accelerated share repurchase programs, tender offers, block trades, potential privately negotiated transactions, or trading plans in compliance with the federal securities laws. On October 14, 2025, the Company announced that the Board authorized an increase to the share repurchase program from $2.0 billion to $2.75 billion. On April 14, 2026, the Board authorized an increase to the remaining share repurchase authorization of $900 million.
Item 3 - Defaults Upon Senior Securities
None.
Item 4 - Mine Safety Disclosures
Not Applicable.
Item 5 - Other Information
In the first quarter of fiscal 2026, none of the Company's directors or officers adopted terminated
Item 6 - Exhibits
31.1 Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of the Principal Executive Officer and of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
EXHIBIT 101.INS - Inline XBRL Instance Document
EXHIBIT 101.SCH - Inline XBRL Taxonomy Extension Schema Document
EXHIBIT 101.CAL - Inline XBRL Taxonomy Extension Calculation Linkbase Document
EXHIBIT 101.DEF - Inline XBRL Taxonomy Extension Definition Linkbase Document
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EXHIBIT 101.LAB - Inline XBRL Taxonomy Extension Label Linkbase Document
EXHIBIT 101.PRE - Inline XBRL Taxonomy Extension Presentation Linkbase Document
EXHIBIT 104 - Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Albertsons Companies, Inc. (Registrant) | |||||||||||
| Date: | July 28, 2026 | By: | /s/ Susan Morris | ||||||||
| Susan Morris | |||||||||||
| Chief Executive Officer and Director (Principal Executive Officer) | |||||||||||
| Date: | July 28, 2026 | By: | /s/ Sharon McCollam | ||||||||
| Sharon McCollam | |||||||||||
| President and Chief Financial Officer (Principal Financial Officer) | |||||||||||
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