Albertsons Inc. reported a 16% digital sales increase in its fiscal 2022 fourth quarter ended Feb. 25, 2023.

Net sales for the quarter were $18.27 billion. That’s up from $17.39 billion in the retailer’s Q4 in fiscal 2021. Although cost of sales increased as well — to $13.18 billion in Q4 from $12.40 billion in the previous Q4 — gross margin did, too. Gross margin in Q4 2022 increased to $5.08 billion from $4.98 billion the year before.

As a percentage, though, Albertsons gross margin went down. It decreased to 27.8% of net sales and other revenue in Q4 2022. Gross margin in the year-ago quarter was 28.7%. Albertsons attributed some of that change in margin to fuel. It said selling and administrative expenses as a percentage of net sales and other revenue was essentially flat.

The grocery conglomerate reported identical sales increased 5.6% in the quarter. Direct-to-consumer digital sales are included in identical sales. Moreover, loyalty members increased 15% to more than 34 million.

CEO Vivek Sankaran said in a statement that Albertsons is “well-positioned to drive top-line growth by deepening relationships with our customers even as inflation continues.”

“However, we also believe that the economic backdrop is uncertain and is likely to be more challenging later in the year,” Sankaran said. “We have prepared our business for a more difficult consumer environment, and are expecting significant labor investments and inflationary cost increases.”

Albertsons digital sales in fiscal 2022

The Boise, Idaho-based retailer’s net sales in fiscal 2022 increased to $77.65 billion. That’s up from $71.89 billion in fiscal 2021.

Cost of sales for the fiscal year totaled $55.89 billion. That’s up from $51.16 billion the year before. And gross margin increased to $21.76 billion in 2022 (28.0% of net sales) from $20.72 billion in 2021 (28.8% of net sales).

Meanwhile, Albertsons digital sales increased 28% year over year in fiscal 2022. Identical sales increased 6.9%.

Kroger deal could change Albertsons forecast

Albertsons and The Kroger Co. are working to win regulatory approval that would have Kroger acquire Albertsons for $24.6 billion. Citing the pending deal, Albertsons didn’t provide a profit and sales forecast for the fiscal year, which ends in early 2024.

The $24.6 billion Kroger and Albertsons deal would remake the online grocery industry. If Kroger were to acquire Albertsons, it would create a 48-state grocery giant that could seriously challenge Walmart’s leadership that market.

Albertsons is No. 26 in the Top 1000, Digital Commerce 360’s database ranking the largest North American online retailers. The Kroger Co. is No. 8.

Albertsons earnings summary

For the fiscal fourth quarter ended Feb. 25, 2023, Albertsons reported:

• Net sales increased to $18.27 billion from $17.38 billion in the year-ago quarter.
• Cost of sales increased to $13.18 billion from $12.40 billion in the year-ago period.
• Albertsons digital sales increased 16% year over year.
• Loyalty members increased 15% to over 34 million.

For the fiscal year 2022 ended Feb. 25, 2023, Albertsons reported:

• Net sales increased to $77.65 billion from $71.89 billion in the previous fiscal year.
• Cost of sales increased to $55.89 billion from $51.16 billion in 2021.
• Albertsons digital sales increased 28% year over year.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.

Follow us on LinkedIn, Twitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.