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Here's Why Albertsons (ACI) is Marching Ahead of Industry

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Albertsons Companies, Inc. ACI has made multiple changes to its business model to adapt and stay relevant amid the changing business environment. Management has initiated a board-led review of potential strategic alternatives aimed at boosting the company’s growth and enhancing stakeholder value. Markedly, shares of this food and drug retailer have climbed 15.3% in the past three months against the industry’s decline of 16%. There is a likelihood that Albertsons Companies with a long-term earnings growth rate of 8% and a VGM Score of A can attain new highs.

Let’s Introspect

Albertsons Companies’ focus on providing efficient in-store services, enhancing digital and omni-channel capabilities, and increasing productivity has been contributing to its upbeat performance. The company’s decent performance continued in third-quarter fiscal 2021 as well. The quarter marked the third straight positive sales and earnings surprise, wherein both the top and the bottom lines improved year over year.

Efforts to bolster assortments, especially in the fresh and Own Brands categories, continue to elevate the customer experience. The company’s right assortment in each local market, loyalty program, and ease of checkout through frictionless and contactless payments have been aiding in attracting customers. The company, through its “just for U” loyalty program, has been acquiring new customers and retaining old members, as well as incentivizing them to spend more and buy more often. During the third quarter, membership increased 17% year over year to reach 28 million members.

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Zacks Investment Research


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The company has been directing resources toward expanding digital and omni-channel capabilities in order to better engage with members and provide them a convenient way to shop, whether in-store, curbside or at home. To this end, the company’s unified mobile application, digital wallet, AI chat capability, and expanded self-checkout installations enhance the customer shopping experience. Albertsons Companies’ third-quarter digital sales rose 9% year on year and 234% on a two-year stacked basis. The company expanded its Drive Up & Go curbside pickup service to 1,930 locations and offered delivery services across more than 2,000 stores.

In addition to its home delivery network, the company has partnered with third-party delivery services to provide customers with the platform of their choice. It has collaborated with Instacart for rush delivery and DoorDash for the delivery of prepared and ready-to-eat offerings. The company has also teamed up with Uber, whereby customers can order a full assortment of groceries on the Uber platform. The company has launched Albertsons Media Collective, a retail media network to offer partners a digital marketing platform and omnichannel solutions.

Albertsons Companies, which operates more than 2,270 stores across 34 states, carries a Zacks Rank #3 (Hold).

3 Stocks to Consider

Here we highlight three better-ranked stocks, namely, Target TGT, Tractor Supply Company TSCO and Sprouts Farmers SFM.

General merchandise retailer Target currently sports a Zacks Rank #2 (Buy). TGT has an expected EPS growth rate of 16.5% for three-five years. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Target’s current financial-year sales and EPS suggests growth of 3.5% and 6.7%, respectively, from the corresponding year-ago period’s levels. TGT has a trailing four-quarter earnings surprise of 21.3%, on average.

Tractor Supply Company, a rural lifestyle retailer in the United States, carries a Zacks Rank #2 at present. TSCO has an expected EPS growth rate of 9.8% for three-five years.

The Zacks Consensus Estimate for Tractor Supply Company’s current financial-year sales and EPS suggests growth of 8.2% and 9.2%, respectively, from the corresponding year-ago period’s actuals. TSCO has a trailing four-quarter earnings surprise of 22%, on average.

Sprouts Farmers offering fresh, natural and organic food products currently carries a Zacks Rank of 2. SFM has an expected EPS growth rate of 7.3% for three-five years.

The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and EPS suggests growth of 4.7% and 4.8%, respectively, from the corresponding year-ago period’s readings. SFM has a trailing four-quarter earnings surprise of 17.9%, on average.


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Target Corporation (TGT) : Free Stock Analysis Report

Tractor Supply Company (TSCO) : Free Stock Analysis Report

Albertsons Companies, Inc. (ACI) : Free Stock Analysis Report

Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report

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