Buy ACI On The Dip


$19 billion supermarket behemoth Albertsons (ACI) reported earnings Tuesday morning for the quarter ended February 26, 2022. ACI owns Lucky’s, Safeway and its namesake brand as well as a number of others. ID sales were +7.5% and adjusted EPS 75 cents. However Wall Street may not have liked the guidance for the current year of +2% to +3% ID sales and adjusted EPS of $2.70-$2.85 (compared to $3.07 in their just completed FY21). As a result shares are off 6%.

Like Kroger (KR), ACI has been a big winner for me and I think the trend is far from over. As stagflation kicks in, consumers will be eating out less and buying more groceries. After all you have to eat – though you don’t have to eat out. In other words, ACI is the perfect defensive/value stock for the macro environment I foresee. At 12x FY22 adjusted EPS guidance and the macro environment as a tailwind it’s hard to go wrong with ACI.

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