aci-20260620

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 20, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 001-39350

Albertsons Companies, Inc.

(Exact name of registrant as specified in its charter)


Delaware						47-4376911
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

250 Parkcenter Blvd.

Boise, Idaho 83706

(Address of principal executive offices and zip code)

(208) 395-6200

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.01 par value	ACI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of July 24, 2026, the registrant had 485,325,683 shares of Class A common stock, par value $0.01 per share, outstanding.

Albertsons Companies, Inc. and Subsidiaries



PART I - FINANCIAL INFORMATION		Page
	Item 1 - Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Income	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statements of Stockholders' Equity	6
	Notes to Condensed Consolidated Financial Statements	7
	Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations	19
	Item 3 - Quantitative and Qualitative Disclosures About Market Risk	31
	Item 4 - Controls and Procedures	31

PART II - OTHER INFORMATION
	Item 1 - Legal Proceedings	32
	Item 1A - Risk Factors	32
	Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	32
	Item 3 - Defaults Upon Senior Securities	33
	Item 4 - Mine Safety Disclosures	33
	Item 5 - Other Information	33
	Item 6 - Exhibits	33

SIGNATURES		35

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PART I - FINANCIAL INFORMATION

Item 1 - Condensed Consolidated Financial Statements (unaudited)

Albertsons Companies, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in millions, except share data)

(unaudited)


		June 20, 2026		February 28, 2026
ASSETS
Current assets
	Cash and cash equivalents	$	293.4	$	198.6
	Receivables, net	1,031.9		932.6
	Inventories, net	5,192.6		5,173.9
	Other current assets	368.8		410.6
	Total current assets	6,886.7		6,715.7

Property and equipment, net		9,867.9		9,903.7
Operating lease right-of-use assets		6,202.1		6,102.4
Intangible assets, net		2,082.5		2,156.1
Goodwill		1,201.0		1,201.0
Other assets		676.8		687.0
TOTAL ASSETS		$	26,917.0	$	26,765.9

LIABILITIES
Current liabilities
	Accounts payable	$	4,087.1	$	4,021.2
	Accrued salaries and wages	1,188.0		1,348.3

	Current maturities of long-term debt and finance lease obligations	746.1		534.0
	Current operating lease obligations	739.8		736.7
	Other current liabilities	1,414.4		1,183.8
	Total current liabilities	8,175.4		7,824.0

Long-term debt and finance lease obligations		8,416.7		8,412.6
Long-term operating lease obligations		5,798.4		5,613.6
Deferred income taxes		628.8		630.6
Other long-term liabilities		2,285.0		2,448.9

Commitments and contingencies



STOCKHOLDERS' EQUITY

	Class A common stock, $0.01 par value; 1,000,000,000 shares authorized, 603,296,327 and 600,734,693 shares issued as of June 20, 2026 and February 28, 2026, respectively	6.0		6.0

	Additional paid-in capital	2,224.8		2,219.4
	Treasury stock, at cost, 114,617,594 and 101,191,791 shares held as of June 20, 2026 and February 28, 2026, respectively	(2,077.0)		(1,850.5)
	Accumulated other comprehensive income	81.5		83.2
	Retained earnings	1,377.4		1,378.1
	Total stockholders' equity	1,612.7		1,836.2
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	26,917.0	$	26,765.9

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Albertsons Companies, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income

(in millions, except per share data)

(unaudited)


	16 weeks ended
		June 20, 2026		June 14, 2025
Net sales and other revenue		$	24,941.6	$	24,880.8
Cost of sales		18,303.5		18,142.5
Gross margin		6,638.1		6,738.3

Selling and administrative expenses		6,379.2		6,320.9
Gain on property dispositions and impairment losses, net		(4.7)		(31.9)

Operating income		263.6		449.3

Interest expense, net		166.7		141.8

Other income, net		(16.8)		(3.9)
Income before income taxes		113.7		311.4

Income tax expense		29.0		75.0
Net income		$	84.7	$	236.4

Other comprehensive income (loss), net of tax
Recognition of pension loss		(0.4)		(0.7)

Other		(1.3)		0.3
Other comprehensive loss		$	(1.7)	$	(0.4)

Comprehensive income		$	83.0	$	236.0

Net income per Class A common share
Basic net income per Class A common share		$	0.17	$	0.41
Diluted net income per Class A common share		0.17		0.41

Weighted average Class A common shares outstanding
Basic		495.2		573.0
Diluted		498.2		575.4

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Albertsons Companies, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in millions)

(unaudited)


	16 weeks ended
	June 20, 2026		June 14, 2025
Cash flows from operating activities:
Net income	$	84.7	$	236.4
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on property dispositions and impairment losses, net	(4.7)		(31.9)
Depreciation and amortization	591.0		572.7
Operating lease right-of-use assets amortization	221.8		214.1

LIFO expense	20.0		17.3
Deferred income tax	0.1		(38.0)

Contributions to pension and post-retirement benefit plans, net of expense (income)	(33.1)		(43.0)

Deferred financing costs	4.1		6.3

Equity-based compensation expense	31.4		33.7
Other operating activities	(12.9)		4.1
Changes in operating assets and liabilities, net of acquisitions:
Receivables, net	(97.0)		(73.2)
Inventories, net	(36.5)		(4.5)
Accounts payable, accrued salaries and wages and other accrued liabilities	(5.1)		(114.6)
Operating lease liabilities	(137.4)		(127.8)
Self-insurance assets and liabilities	0.3		(6.0)
Other operating assets and liabilities	102.2		108.8
Net cash provided by operating activities	728.9		754.4

Cash flows from investing activities:
Payments for property, equipment and intangibles, including lease buyouts	(522.1)		(584.6)
Proceeds from sale of assets	25.8		78.2
Business acquisitions, net of cash acquired	(28.0)		—
Other investing activities	16.6		32.3
Net cash used in investing activities	(507.7)		(474.1)

Cash flows from financing activities:
Proceeds from issuance of long-term debt, including ABL facility	275.0		625.0
Payments on long-term borrowings, including ABL facility	(59.6)		(600.2)
Payments of obligations under finance leases	(8.2)		(10.1)


Dividends paid on common stock	(84.0)		(85.7)



Treasury stock purchase, at cost	(224.9)		(314.8)

Employee tax withholding on vesting of restricted stock units	(27.4)		(31.4)
Other financing activities	(0.1)		(5.7)
Net cash used in financing activities	(129.2)		(422.9)

Net increase (decrease) in cash and cash equivalents and restricted cash	92.0		(142.6)
Cash and cash equivalents and restricted cash at beginning of period	203.0		297.9
Cash and cash equivalents and restricted cash at end of period	$	295.0	$	155.3

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Albertsons Companies, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(in millions, except share data)

(unaudited)


	Class A Common Stock			Additional paid-in capital		Treasury Stock			Accumulated other comprehensive income		Retained earnings		Total stockholders' equity
	Shares	Amount				Shares	Amount
Balance as of February 28, 2026	600,734,693	$	6.0	$	2,219.4	101,191,791	$	(1,850.5)	$	83.2	$	1,378.1	$	1,836.2
Equity-based compensation	—	—		31.4		—	—		—		—		31.4
Shares issued and employee tax withholding on vesting of restricted stock units	2,561,634	—		(27.4)		—	—		—		—		(27.4)

Repurchase of common stock	—	—		—		13,425,803	(226.5)		—		—		(226.5)
Cash dividends declared on common stock ($0.17 per common share)	—	—		—		—	—		—		(84.0)		(84.0)

Net income	—	—		—		—	—		—		84.7		84.7
Other comprehensive loss, net of tax	—	—		—		—	—		(1.7)		—		(1.7)
Other activity	—	—		1.4		—	—		—		(1.4)		—
Balance as of June 20, 2026	603,296,327	$	6.0	$	2,224.8	114,617,594	$	(2,077.0)	$	81.5	$	1,377.4	$	1,612.7


	Class A Common Stock			Additional paid-in capital		Treasury Stock			Accumulated other comprehensive income		Retained earnings		Total stockholders' equity
	Shares	Amount				Shares	Amount
Balance as of February 22, 2025	597,964,926	$	6.0	$	2,184.0	22,522,934	$	(386.7)	$	94.7	$	1,487.9	$	3,385.9
Equity-based compensation	—	—		34.3		—	—		—		—		34.3
Shares issued and employee tax withholding on vesting of restricted stock units	2,482,898	—		(31.4)		—	—		—		—		(31.4)

Repurchase of common stock	—	—		—		14,249,535	(314.8)		—		—		(314.8)
Cash dividends declared on common stock ($0.15 per common share)	—	—		—		—	—		—		(85.7)		(85.7)

Net income	—	—		—		—	—		—		236.4		236.4
Other comprehensive loss, net of tax	—	—		—		—	—		(0.4)		—		(0.4)
Other activity	—	—		1.1		—	—		—		(1.1)		—
Balance as of June 14, 2025	600,447,824	$	6.0	$	2,188.0	36,772,469	$	(701.5)	$	94.3	$	1,637.5	$	3,224.3

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Albertsons Companies, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(unaudited)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying interim Condensed Consolidated Financial Statements include the accounts of Albertsons Companies, Inc. and its subsidiaries (the "Company"). All significant intercompany balances and transactions were eliminated. The Condensed Consolidated Balance Sheet as of February 28, 2026 is derived from the Company's annual audited Consolidated Financial Statements, which should be read in conjunction with these Condensed Consolidated Financial Statements and which are included in the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 2026, filed with the Securities and Exchange Commission (the "SEC") on April 27, 2026. Certain information in footnote disclosures normally included in annual financial statements was condensed or omitted for the interim periods presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In the opinion of management, the interim data includes all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The interim results of operations and cash flows are not necessarily indicative of those results and cash flows expected for the year. The Company's results of operations are for the 16 weeks ended June 20, 2026 and June 14, 2025.

Significant Accounting Policies

Use of estimates: The preparation of the Company's Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting periods presented. Certain estimates require difficult, subjective or complex judgments about matters that are inherently uncertain, including legal contingencies, self-insurance liabilities and impairments of long-lived assets and goodwill. Actual results could differ from those estimates.

Restricted cash: Restricted cash is included in Other current assets or Other assets depending on the remaining term of the restriction and primarily relates to surety bonds. The Company had $1.6 million and $4.4 million of restricted cash as of June 20, 2026 and February 28, 2026, respectively.

Inventories, net: Substantially all of the Company's inventories consist of finished goods valued at the lower of cost or market and net of vendor allowances. The Company primarily uses the retail inventory or cost method to determine inventory cost before application of any last-in, first-out ("LIFO") adjustment. Interim LIFO inventory costs are based on management's estimates of expected year-end inventory levels and inflation rates. The Company recorded LIFO expense of $20.0 million and $17.3 million for the 16 weeks ended June 20, 2026 and June 14, 2025, respectively.

Acquisitions: On April 29, 2026, the Company acquired certain retail operations from Hames Corporation ("Hames"). The purchase price was $28.0 million, and the transaction was accounted for under the acquisition method of accounting. The purchase price was allocated to the fair values of the identifiable assets and liabilities. Net assets acquired primarily consisted of fixed assets, intangibles and inventory, valued at $19.2 million, $7.3 million and $2.2 million, respectively. Intangible assets acquired primarily consisted of tradenames. Pro forma results are not presented as the acquisition was not considered material to the Company. Third-party acquisition-related costs were immaterial for the 16 weeks ended June 20, 2026 and were expensed as incurred as a component of Selling and administrative expenses.

Convertible Common Stock and Preferred Stock: The Company's certificate of incorporation authorizes 150,000,000 shares of Class A-1 convertible common stock, par value $0.01 per share, and 100,000,000 shares of preferred stock, par value $0.01 per share, of which 1,750,000 shares of preferred stock are designated Series A convertible preferred stock and 1,410,000 shares of preferred stock are designated Series A-1 convertible preferred

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stock. As of June 20, 2026 and February 28, 2026, no shares of Class A-1 convertible common stock and no shares of preferred stock are issued or outstanding.

Income taxes: Income tax expense was $29.0 million for the 16 weeks ended June 20, 2026, representing a 25.5% effective tax rate. Income tax expense was $75.0 million for the 16 weeks ended June 14, 2025, representing a 24.1% effective tax rate. The Company's effective tax rate for both the 16 weeks ended June 20, 2026 and June 14, 2025 differs from the federal income tax statutory rate of 21% primarily due to state income taxes.

Revenue recognition: Revenues from the retail sale of products are recognized at the point of sale or delivery to the customer, net of returns and sales tax. Pharmacy sales are recorded upon the customer receiving the prescription. Third-party receivables from pharmacy sales were $601.5 million and $519.8 million as of June 20, 2026 and February 28, 2026, respectively, and are recorded in Receivables, net. For digital related sales, which primarily include home delivery and Drive Up & Go curbside pickup, revenues are recognized upon either pickup in store or delivery to the customer and may include revenue for separately charged delivery services. The Company records a contract liability when rewards are earned by customers in connection with the Company's loyalty programs. As rewards are redeemed or expire, the Company reduces the contract liability and recognizes revenue. The contract liability balance was immaterial as of June 20, 2026 and February 28, 2026. Media advertising services are classified as either Net sales and other revenue or a reduction in Cost of sales depending on the nature of the media advertising arrangement.

The Company records a contract liability when it sells its own proprietary gift cards. The Company records a sale when the customer redeems the gift card. The Company's gift cards do not expire. The Company reduces the contract liability and records revenue for the unused portion of gift cards in proportion to its customers' pattern of redemption, which the Company determined to be the historical redemption rate. The Company's contract liability related to gift cards was $119.3 million and $126.2 million as of June 20, 2026 and February 28, 2026, respectively.

Disaggregated Revenues

The following table represents Net sales and other revenue by product type (dollars in millions):


	16 weeks ended
		June 20, 2026	June 14, 2025
			Amount (1)		% of Total		Amount (1)		% of Total
Non-perishables (2)			$	11,875.7	47.6	%	$	12,141.7	48.8	%
Fresh (3)			7,883.1		31.6		7,986.8		32.1
Pharmacy			3,304.0		13.2		3,155.0		12.7
Fuel			1,463.9		5.9		1,229.9		4.9
Other (4)			414.9		1.7		367.4		1.5
Net sales and other revenue			$	24,941.6	100.0	%	$	24,880.8	100.0	%

(1) Digital related sales are included in the categories to which the revenue pertains.

(2) Consists primarily of general merchandise, grocery, dairy and frozen foods.

(3) Consists primarily of produce, meat, deli and prepared foods, bakery, floral and seafood.

(4) Consists primarily of wholesale sales to third parties, commissions, rental income, media advertising revenue and other miscellaneous revenue.

Recently issued accounting standards: In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses." The ASU requires disclosures about specific types of expenses, including purchases of inventory, employee compensation,

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depreciation and amortization. The amendments in this ASU are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, "Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software." The ASU removes all references to prescriptive and sequential software development stages. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements and related disclosures.

NOTE 2 - FAIR VALUE MEASUREMENTS

The accounting guidance for fair value established a framework for measuring fair value and established a three-level valuation hierarchy for disclosure of fair value measurement. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability at the measurement date. The three levels are defined as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities;

Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and

Level 3 - Unobservable inputs in which little or no market activity exists, requiring an entity to develop its own assumptions that market participants would use to value the asset or liability.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following table presents certain assets which were measured at fair value on a recurring basis as of June 20, 2026 (in millions):


	Fair Value Measurements
	Total		Quoted prices in active markets for identical assets (Level 1)		Significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:


Short-term investments (1)	$	14.5	$	8.5	$	6.0	$	—
Non-current investments (2)	113.0		9.2		103.8		—
Derivative contracts (3)	5.1		—		5.1		—
Total	$	132.6	$	17.7	$	114.9	$	—

(1) Primarily relates to Mutual Funds (Level 1) and Certificates of Deposit (Level 2). Included in Other current assets.

(2) Primarily relates to investments in Exchange-Traded Funds (Level 1) and certain equity investments, U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets.

(3) Primarily relates to energy derivative contracts. Included in Other assets.

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The following table presents certain assets and liabilities which were measured at fair value on a recurring basis as of February 28, 2026 (in millions):


	Fair Value Measurements
	Total		Quoted prices in active markets for identical assets (Level 1)		Significant observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:


Short-term investments (1)	$	13.7	$	7.8	$	5.9	$	—
Non-current investments (2)	111.4		8.7		102.7		—
Derivative contracts (3)	3.4		—		3.4		—
Total	$	128.5	$	16.5	$	112.0	$	—

Liabilities:
Derivative contracts (3)	$	0.1	$	—	$	0.1	$	—
Total	$	0.1	$	—	$	0.1	$	—

(1) Primarily relates to Mutual Funds (Level 1) and Certificates of Deposit (Level 2). Included in Other current assets.

(2) Primarily relates to investments in Exchange-Traded Funds (Level 1) and certain equity investments, U.S. Treasury Notes and Corporate Bonds (Level 2). Included in Other assets.

(3) Primarily relates to energy derivative contracts. Included in Other assets or Other current liabilities.

The Company records cash and cash equivalents, restricted cash, accounts receivable and accounts payable at cost. The recorded values of these financial instruments approximate fair value based on their short-term nature.

The estimated fair value of the Company's debt, including current maturities, was based on Level 2 inputs, being market quotes or values for similar instruments, and interest rates currently available to the Company for the issuance of debt with similar terms and remaining maturities as a discount rate for the remaining principal payments. As of June 20, 2026, the fair value of total debt was $8,648.7 million compared to the carrying value of $8,842.2 million, excluding debt discounts and deferred financing costs. As of February 28, 2026, the fair value of total debt was $8,649.9 million compared to the carrying value of $8,626.8 million, excluding debt discounts and deferred financing costs.

Assets Measured at Fair Value on a Non-Recurring Basis

The Company measures certain assets at fair value on a non-recurring basis, including long-lived assets and goodwill, which are evaluated for impairment. Long-lived assets include store-related assets such as property and equipment, operating lease assets and certain intangible assets. The inputs used to determine the fair value of long-lived assets and a reporting unit are considered Level 3 measurements due to their subjective nature.

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NOTE 3 - LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS

The Company's long-term debt and finance lease obligations as of June 20, 2026 and February 28, 2026, net of unamortized debt discounts of $35.4 million and $37.9 million, respectively, and deferred financing costs of $52.1 million and $55.2 million, respectively, consisted of the following (in millions):


	June 20, 2026		February 28, 2026

Senior Unsecured Notes due 2028 to 2034, interest rate range of 3.50% to 6.50%	$	7,232.7	$	7,228.9
New Albertsons L.P. Notes due 2027 to 2031, interest rate range of 6.52% to 8.70%	434.4		489.3
Safeway Inc. Notes due 2027 to 2031, interest rate range of 7.25% to 7.45%	376.6		376.5
ABL Facility	700.0		425.0
Other financing obligations	11.0		14.0

Finance lease obligations	408.1