Albertsons Companies, Inc. (ACI) — Fundamental Analysis

Albertsons Companies (ACI) is one of America's largest grocery chains, and its financials tell the story of a low-margin, high-volume business that has been generating solid revenue growth but experiencing meaningful profitability compression in recent years. Revenues climbed from roughly $69.7 billion in fiscal 2021 to $83.2 billion in fiscal 2026, a respectable pace for a mature grocery operator, but gross margins have been eroding steadily — from nearly 29% in 2021 down to about 27.2% in 2026 — and net margins have compressed sharply to just 0.26% in the most recent fiscal year. The company carries a current ratio below 1.0, which is typical for grocers operating on trade credit but leaves little room for error. Capital expenditures remain substantial at roughly $1.8 billion annually, reflecting ongoing store investment, and debt levels are significant though a debt-to-equity ratio wasn't calculable from the most recent filings. The headline takeaway: Albertsons is a growing but increasingly squeezed business, with the failed Kroger merger backdrop adding strategic uncertainty to an already thin-margin environment.

Snapshot & Big Picture

Albertsons operates thousands of supermarkets across the United States under banners including Safeway, Vons, Jewel-Osco, Shaw's, and its namesake Albertsons brand. It is a capital-intensive, operationally demanding business competing in one of retail's most fiercely competitive arenas — against Kroger, Walmart, Costco, Amazon/Whole Foods, and a growing field of discount grocers. The company went public in 2020 and attempted a transformative merger with Kroger that was ultimately blocked by regulators in late 2024, leaving Albertsons to chart an independent path forward.

Latest Quarter Snapshot

No quarterly data from a 10-Q was available for this analysis — the most recent filing in the dataset is the annual 10-K for the fiscal year ended February 28, 2026, filed April 27, 2026. A subsequent 10-Q was filed July 28, 2026, but its underlying financial data was not provided. Investors looking for the most current quarterly picture should consult that filing directly via the SEC link in the Source Filings section below. As a result, all trend commentary in this post is based on annual figures through fiscal year-end February 2026.

Profitability

Albertsons' profitability trajectory over the past several years is one of the more striking features of its financial profile — and not in a good way. The company's gross margin has been in a steady, multi-year decline, falling from a post-IPO peak of roughly 29.3% in fiscal 2021 to 27.2% in fiscal 2026. That's over 200 basis points of gross margin erosion in five years, a meaningful deterioration for a business already operating at thin margins.

The operating margin picture is similarly concerning. After peaking at 3.39% in fiscal 2022 — itself a relatively strong year boosted by pandemic-era consumer behavior changes — operating margins have compressed each successive year, landing at just 0.87% in fiscal 2026. Net margin followed the same path, collapsing from 2.25% in fiscal 2022 to a razor-thin 0.26% in fiscal 2026. At that level, even modest cost headwinds or revenue softness could push net income to near zero or negative.

EBITDA tells a somewhat softer version of the same story. It peaked at approximately $4.1 billion in fiscal 2023, retreated to $3.8 billion in fiscal 2024, fell further to $3.4 billion in fiscal 2025, and dropped more sharply to $2.6 billion in fiscal 2026. The most recent year's EBITDA compression is especially notable and suggests that whatever was weighing on earnings in fiscal 2026 — whether merger-related costs, competitive pricing pressure, labor cost inflation, or shrinkage — was more than incremental.

Financial Health

Albertsons' balance sheet warrants careful attention. The current ratio — a measure of whether a company has enough short-term assets to cover short-term liabilities — has been below 1.0 for most of the past several years, sitting at 0.86 in fiscal 2026. This is not unusual for large grocery chains, which typically benefit from collecting cash from customers before paying suppliers, effectively using trade payables as a form of short-term financing. Still, it does mean there is limited liquidity cushion if operating cash flows deteriorate further.

The debt-to-equity ratio was not calculable from the provided data for any of the most recent fiscal years (fiscal 2026 through 2023), and was similarly unavailable for fiscal 2021, 2020, and 2017. It was reported in fiscal 2019 at approximately 6.77x and fiscal 2018 at approximately 7.88x — levels reflecting the heavy debt load Albertsons carried from its leveraged buyout history. While more recent debt-to-equity figures aren't available in this dataset, the company is known to carry significant long-term debt, and the EBITDA compression seen in fiscal 2026 would likely push leverage ratios higher on a net-debt-to-EBITDA basis.

Capital Expenditures: Albertsons invests heavily in its physical store base, technology, and distribution infrastructure. Capital expenditures have ranged between roughly $1.4 billion and $2.2 billion annually over the past decade, representing a fairly stable band of about 2.2% to 2.6% of revenue.

The capex-to-revenue ratio actually peaked in fiscal 2023 at 2.77% and has since declined modestly to 2.21% in fiscal 2026, suggesting the company has been pulling back somewhat on investment spending — possibly as a consequence of merger uncertainty that constrained strategic planning, or as a deliberate response to tightening margins. The absolute capex dollar figure has also declined from the $2.0–2.2 billion range back toward $1.8–1.9 billion. For a business with thousands of stores, maintaining adequate reinvestment is important for competitiveness; continued capex reduction in a pressured margin environment bears watching.

Growth

Albertsons has grown revenue consistently, which is notable for a brick-and-mortar grocery operator in a mature market. The table below summarizes trailing revenue compound annual growth rates across the available windows.

The 10-year CAGR is not available because Albertsons' SEC filing history does not extend back a full ten years from the current period — the company went public in 2020, limiting the comparable filing baseline.

The 5-year CAGR of 3.60% is reasonably healthy for a large-cap grocery operator and reflects both organic growth and some benefit from inflationary food pricing that lifted nominal revenues. However, the more recent 3-year CAGR of 2.32% shows a clear deceleration, consistent with lapping the inflationary tailwind and operating in a more normalized but competitive pricing environment. Revenue growth alone, while positive, has not been enough to offset the margin compression visible across the profitability metrics — meaning Albertsons is growing the top line but struggling to translate that growth into bottom-line results at the same rate.

Source Filings

• Form 10-Q — Filed July 28, 2026 (SEC EDGAR)
• Form 10-K — Filed April 27, 2026, Fiscal Year Ended February 28, 2026 (SEC EDGAR)