Albertsons Companies, Inc. (ACI) Executive Summary Albertsons Companies, Inc. is a large U.S. grocery and pharmacy retailer whose financial profile combines rising top-line scale with strong operating cash conversion but notable leverage and margin pressure. The company has grown reported periodic revenue from roughly $14.0B in earlier periods to $18.55B in the most recent reported revenue period,
Albertsons Companies, Inc. is a large U.S. grocery and pharmacy retailer whose financial profile combines rising top-line scale with strong operating cash conversion but notable leverage and margin pressure.
The company has grown reported periodic revenue from roughly $14.0B in earlier periods to $18.55B in the most recent reported revenue period, demonstrating multi-year top-line expansion (Revenue & Net Income).
Gross margin is reported at 28.8% in the most recent period, providing a buffer on product-level profitability (Profit Margin Trends).
Operating cash flow has meaningfully exceeded reported net income across the dataset — trailing‑12‑month operating cash flow was \$2.85B versus trailing net income figures as low as \$466.4M in overlapping periods — and the company’s cash conversion metrics are strong (cash conversion ratio ~4.08), which signals high quality in earnings and cash generation (Earnings Quality Analysis; Strategic Capital Allocation).
That said, liquidity and capital structure are areas of concern. The current ratio is below 1.0 at 0.8142, which indicates short‑term liquidity constraints, and debt-to-equity is elevated at 4.5815, reflecting heavy leverage on the balance sheet. Return on equity has also deteriorated from prior peaks — the most recent trailing twelve‑month ROE was reported at 2.0% and ROE growth is negative (-0.7747), underscoring compressed shareholder returns even as revenue rises (Return on Equity (ROE)).
Operating cash flow also shows a downward inflection from a $3.90B peak in 2021 to \$2.85B by the 2023 period end, and quarterly net income has been variable (most recent quarter net income observations include $293.3M on revenue of $18.55B), pointing to earnings volatility (Strategic Capital Allocation; Revenue & Net Income).
The foundation of business quality and long-term value creation
Albertsons Companies, Inc. revenue shows a multi-year increase in the reported periodic values, rising from roughly $14.02B–$14.18B in mid‑2018/2019 to $18.55B in the most recent reported revenue period (2024-09-07). A much larger $71.89B revenue entry for the period ending 2022-02-26 is also present in the dataset and stands apart from the other periodic revenue figures.
Net income has been more variable across quarters. Recent quarterly net income rose from $145.5M (2024-09-07) to $168.5M (2025-09-06) and then to $293.3M (2025-11-29), after earlier peaks of $342.7M (2022-09-10) and $375.5M (2022-12-03). The most recent revenue observed was $18.55B and the most recent net income observed was $293.3M.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Period Information
Report Type: Annual (10-K)
Period: Feb 2021 to Feb 2022
Analyzing long-term margin stability and competitive positioning
Albertsons Companies, Inc.'s most recent reported gross profit margin for the period ending 2022-02-26 is 28.8%. Because the dataset contains a single quarter of gross margin data, no multi-period trend, inflection points, or stability assessment can be derived from the charted values.
Only gross margin is provided in the supplied data; operating margin and net profit margin values are not included, so comparisons across those metrics are not possible here. The most recent gross margin observed was 28.8%.
Understanding Profit Margins
Between Feb 2021 and Feb 2022, Albertsons Companies Inc converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
Albertsons Companies, Inc.'s trailing‑12‑month operating cash flow rose from $1.90B at the 2020 period end to a peak of $3.90B at the 2021 period end, then declined to $3.51B at the 2022 period end and further to $2.85B at the most recent 2023 period end. The recent three-year pattern shows a clear inflection: a large increase into 2021 followed by a two‑year downward trend through 2023, with the latest level materially below the 2021 peak.
Where comparable trailing‑12‑month net income figures are available in the dataset, net income was substantially lower than operating cash flow: $131.1M at the 2019 period end and $466.4M at the 2020 period end versus operating cash flows of $1.69B and $1.90B for overlapping periods. The dataset’s latest observed values are: Operating Cash Flow (TTM) $2.85B and Net Income (TTM) $466.4M.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
Albertsons Companies, Inc.'s trailing twelve-month return on equity shows a recent decline. After rising to 9.0% in the period ending 2019-02-23 from 3.3% in the period ending 2018-02-24, ROE fell sharply to 2.0% in the most recent period ending 2020-02-29. The latest observation represents a marked reduction versus the prior year.
The most recent trailing twelve-month return on equity was 2.0%.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
Albertsons Companies, Inc.'s trailing-twelve-month operating cash flow has moved lower over the recent periods shown, falling from $3.90B (period end 2021-02-27) to $3.51B (2022-02-26) and then to $2.85B (2023-02-25), indicating a downward trend in core cash generation through the most recent operating-data point.
Investing cash flow has trended more negative over the same multi-year span, shifting from modest outflows (e.g., -$86.8M at 2019-02-23) to larger outflows by 2022 and 2023 (‑$1.54B at 2022-02-26 and ‑$1.98B at 2023-02-25).
Financing activity shows a pronounced inflection: a large financing outflow of -$3.37B at 2023-02-25 was followed by a materially smaller financing outflow of -'$684.1M at the latest available period end (2025-02-22).
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.