Oct 13, 2026 earnings call — Comprehensive turnaround and business review
Company paused providing an updated outlook and reported Q2 adjusted EBITDA of $784 million.
Revenue $18.9B (est $18.9B) · EPS $0.36 (est $0.33)
Key quotes
"We will accelerate ACI Edge to improve buying and find savings we can pass back to customers more aggressively."
"Going forward, we're evaluating every customer-facing investment against three outcomes: a stronger customer value proposition, improved traffic in units, and sustainable market share gains. Those outcomes will increasingly guide how we allocate resources and measure success."
"Although the business performed in line with our revised guidance expectations during the second quarter, we do not believe it is prudent today to provide an incremental update to our financial outlook."
Analyst Q&A 13
business review timing and ACI Edge
Q (Mark Carden · UBS): Why announce the comprehensive business review now and how it affects ACI Edge ramp and scope? Also, does centralized buying get delayed and is the guidance pause driven by consumer weakness?
A: Management said the review is an evolution of ACI Edge and is meant to move faster and more aggressively. They will pause initiatives that do not directly improve customer experience or financial performance and return with a plan on ACI Edge in the fourth quarter. They also said centralized buying is being accelerated and the guidance pause reflects potential changes to investment pace and timing.
"We look forward to coming back to you during our fourth quarter earnings call with a more comprehensive plan on what the evolution of ACI Edge looks like." — Susan Morris (CEO)
cost savings and portfolio criteria
Q (Edward Kelly · Wells Fargo): How much more cost savings room remains and how will you balance speed with risk? What criteria will you use to assess underperforming assets and how big is that base?
A: Management said there is still substantial opportunity for cost reductions, highlighting Buying Better Together (cost of goods), goods not for resale, SG&A headcount reductions, and better shrink control in stores. They said speed matters but focus on fewer initiatives will improve outcomes, and the portfolio review is ongoing — they are looking at store performance and required capital and are not ready to declare exits.
"We actually believe there's still substantial blue sky in terms of cost out." — Susan Morris (CEO)
value perception and protecting stores
Q (John Heinbockel · Guggenheim): How does value perception compare with reality and how quickly can you improve it? How will you insulate stores from upstream distractions during the review?
A: Management said value is a mix of product quality, variety, service, ease, and price; they will pursue a balanced, market-by-market approach and surgical price investments. They said centralizing decisions is meant to simplify operations and the four regional EVPs are focused on elevating store standards to eliminate distractions from corporate noise.
"With that kind of focus on elevating store standards and execution, it eliminates the distractions from all the noise happening around us." — Susan Morris (CEO)
inflation and shrink impact
Q (Leah Jordan · Goldman Sachs): What level of inflation did you see in the quarter, what about transportation and supplier cost actions, and how big was the shrink headwind and its causes?
A: Susan said CPI picked up to about 2.5% in Q2 and the company passed along slightly less, around 2%, 2.1%. Cody said suppliers are coming with cost increases but the company has a playbook to handle that, and most of the shrink increase this quarter was related to the cyclospora produce outbreak.
"we saw CPI pick up to about 2.5% in the second quarter, and I would tell you that we passed along less than that, maybe 2%, 2.1%." — Susan Morris (CEO)
pricing progress and buybacks
Q (Simeon Gutman · Morgan Stanley): Where do you stand on pricing nationally and locally and progress since you took over? How does the guidance pull affect capital allocation and share repurchases?
A: Management said pricing is handled market-by-market and category-by-category with a surgical approach; they ran three price campaigns last year and are learning from pilots to target investments. Cody said they repurchased about $400 million in shares in the first two quarters and have $1.7 billion remaining on the authorization while reviewing capital allocation holistically.
"Through the first two quarters of the year, we repurchased about $400 million in shares." — Cody Perdue (CFO)
back-half headwinds and timing
Q (Rupesh Parikh · Oppenheimer): Can you quantify puts and takes for the back half (IRA, cyclospora, eggs)? And how long might the turnaround take to show benefits?
A: Cody said headline identical sales were -0.8%, pharmacy was up low to mid-single digits leaving the core down a little over 1.5%, and the quarter included about 30 basis points from cyclospora and 30 basis points from egg deflation, which they view as cyclical. Susan said they are moving with speed, have clear lines of sight on near-term actions, and will provide more clarity in the fourth quarter.
"Pharmacy was up low to mid-single digits, which leaves the core down about in that just a little bit over 1.5% range." — Cody Perdue (CFO)
CFO search and price transparency
Q (Tom Palmer · JPMorgan): Any update on the CFO search and does board change affect candidate type? Also, with e-commerce price transparency, how do you compete on value without being lowest cost?
A: Susan said the CFO search is underway and making good progress and she is confident they will find an aggressive candidate to drive change. She said price transparency has increased but price is not the same as value; they will use convenience, loyalty personalization, and other levers to differentiate.
"Our CFO search is underway, and we're making good progress there." — Susan Morris (CEO)
own brands and promotions/SKU choices
Q (Robbie Ohmes · BofA): Are you accelerating own brands and will you change promo strategy or pursue SKU rationalization with CPGs?
A: Susan said yes, they are accelerating own brands and have already improved variety, quality, and cost; this will continue to accelerate. She said pricing and promotions will be surgical by market and category, promotions will be refined to drive returns, and they will pursue cost reductions while keeping the right variety for customers.
"We are absolutely accelerating our efforts around own brands." — Susan Morris (CEO)
litigation impact and loyalty growth
Q (Bill Kirk · Roth Capital Partners): How much will the Kroger trial outcome affect the business review, funding plans, and asset decisions? And what was loyalty member growth in Q2?
A: Susan said they will not discuss the litigation and are moving forward with actions regardless of its status, with a clear line of sight on what to do today. Cody said the review and cost-out programs are proceeding without giving effect to litigation, and Susan added loyalty members continue to grow and active members spend 3 to 4 times more than non-members.
"We are not really going to talk about the litigation at this moment in time, and I would say that we are moving forward with our actions right now, regardless of what is going on in that space." — Susan Morris (CEO)
CapEx and AI use
Q (Joe Feldman · Telsey Advisory Group): Will you pull back CapEx or keep the $1.9–2.0 billion plan? And do you have the right technology/AI to support the turnaround or need upgrades first?
A: Susan said they are investing behind the highest-return opportunities and remain thoughtful about fleet investments. Cody said many 2026 projects are already underway and are good ROI projects they expect to continue. Susan described four AI big bets—merch intelligence, store labor, demand forecasting—that are designed to speed better decisions, improve in-stock, and reduce cost and complexity.
"Our merch intelligence big bet is literally about enabling faster, smarter decision-making on category decisions, whether it be assortment, all the way through to price and promotion." — Susan Morris (CEO)
funding price investments and pharmacy mix
Q (Brandon Cheatham · Citi): How much of price investments are funded by Buying Better and vendors, and what are goals for funding buckets? Any progress in gaining pharmacy customers' basket?
A: Susan said price investments are funded by a mix of vendor support and internal cost out and they will deep dive to accelerate investments. She said pharmacy is performing well with prescription count growth and a turn to profitability, and pharmacy customers drive much larger baskets and lifetime value.
"We have seen a nice turn to profitability in our pharmacy business." — Susan Morris (CEO)
Buying Better Together details and price gaps
Q (Kelly Bania · BMO): How much national buying is on Buying Better Together, how are savings coming in, and does the review change that program? Also, candid assessment of price gaps and progress?
A: Susan said they are centralizing Center Store and negotiations with large suppliers have begun to secure lower frontline cost of goods while also refining promotional strategy; potential store exits are not large enough to materially affect vendor negotiations. She added they are not satisfied with their price position, know the item-level opportunities, and are taking time to accelerate cost out and strategically invest in price.
"We are in the process of going through our largest suppliers and working closely with them to secure a lower frontline cost of goods, and then also working on our promotional strategy moving forward." — Susan Morris (CEO)
ID sales by geography and banners
Q (Chuck Cerankosky · Northcoast): Can you discuss identical sales across your banners and the role of geography?
A: Susan said they do not disclose individual banner results but noted unique pressures by region, with unit pressure stronger in the West and more pressure on the coasts compared with the middle of the country. She pointed out this matches national data trends rather than being specific to Albertsons.
"What I would say is, we don't disclose individual banner performance, but what I would say is there are definitely unique pressures across the country, and you can see this in national data, not necessarily specific to Albertsons." — Susan Morris (CEO)