Albertsons Companies closed out the third quarter of fiscal 2025 with results that highlight the grocery chain’s ongoing push to become a technology-driven, customer-focused operation. The company reported net income of $293 million and strong growth across its digital and pharmacy channels, reinforcing CEO Susan Morris’s vision of a modernized retail experience at the company’s banner stores.
Digital Innovation Fuels Growth
The quarter’s standout performance came from Albertsons’ digital operations, which surged 21 percent year-over-year. The growth is attributed to the company’s investments in technology and artificial intelligence, which Morris said are “fundamentally reshaping how we operate and serve our customers.”
The digital expansion is creating more personalized shopping experiences while driving operational efficiency across the company’s 2,243 retail locations, according to the company.
Albertsons’ loyalty program is approaching a milestone, growing 12 percent to reach 49.8 million members. The grocer says this expanding base of engaged customers provides it with valuable data insights and strengthens customer relationships across its 22 banners, which include Safeway, Vons, Jewel-Osco and Acme.
Solid Financial Performance Despite Headwinds
The company posted identical store sales growth of 2.4 percent for the quarter ended Nov. 29, 2025, with total net sales and other revenue increasing 1.9 percent to $19.1 billion. Pharmacy sales were a primary driver of this growth, though the company noted that the temporary government shutdown and delayed SNAP funding last fall created a modest headwind of approximately 10 to 20 basis points.
Adjusted net income reached $390 million, or $0.72 per share, up slightly from $0.71 per share in the prior-year period. Adjusted EBITDA came in at $1.04 billion, representing 5.4 percent of net sales. While gross margins compressed by 55 basis points due to delivery costs associated with digital growth and the product mix shift toward lower-margin pharmacy sales, the company leveraged productivity initiatives to fund continued investments in its customer value proposition, Albertsons said.
Operational Efficiency Gains Momentum
One of the quarter’s bright spots was Albertsons’ progress on cost management. Selling and administrative expenses decreased as a percentage of sales, dropping 33 basis points when excluding fuel impacts. This improvement came from better leverage of employee costs and reduced merger-related expenses, demonstrating that the company’s productivity initiatives are offsetting wage inflation and other cost pressures.
During the first 40 weeks of fiscal 2025, Albertsons invested $1.4 billion in capital expenditures, completing 74 store remodels and opening five new locations while continuing to build out its digital and technology infrastructure. The Boise, Idaho-based grocer believes these investments are positioning it for sustained competitive advantage in an increasingly digital marketplace.
Looking Ahead with Confidence
For fiscal 2025, Albertsons has refined its outlook, now expecting identical sales growth between 2.2- 2.5 percent and adjusted EBITDA in the range of $3.825 billion to $3.875 billion, which includes approximately $65 million from the company’s 53rd week. Adjusted net income per share is projected between $2.08 and $2.16.
Morris expressed confidence in the company’s trajectory: “Our modernized technology foundation, relentless focus on productivity and commitment to innovation will enable us to deliver sustainable long-term value for our customers, associates and shareholders.”