Albertsons Companies Inc
For the period ended Jun 15, 2024. Filed Jul 23, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 15, 2024 · Filed Jul 23, 2024
ACI$12.79-3.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-02; filed 2024-01-09.
0001646972-24-000009
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-15; filed 2024-07-23.
0001646972-24-000165
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 124 previous paragraphs and 109 current paragraphs.
62 unchanged; 34 reworded; 10 added; 27 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 14 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
• changes in tax rates, tax laws, and regulations that directly impact our business or our customers may adversely impact our financial condition and results of operations.
Current report
•Identical sales increased 1.4%
Current report
•Digital sales increased 23%
Current report
•Loyalty members increased 15% to 41.4 million
Current report
•Net income of $241 million, or $0.41 per Class A common share
Current report
•Adjusted net income of $392 million, or $0.66 per Class A common share
Current report
•Adjusted EBITDA of $1,184 million
Current report
Other Expense (Income), Net
Current report
For the first quarter of fiscal 2024, Adjusted EBITDA was $1,183.9 million, or 4.9% of Net sales and other revenue, compared to $1,318.5 million, or 5.5% of Net sales and other revenue, for the first quarter of fiscal 2023.
Current report
(d) Gain on energy hedges, net:
Removed paragraphs (27)
Previous report
• changes in macroeconomic conditions and uncertainty regarding the geopolitical environment;
Previous report
• changes in market interest rates;
Previous report
• continued reduction in administering COVID-19 vaccines and dispensing test kits.
Previous report
Pursuant to the Merger Agreement, each share of Class A common stock of the Company issued and outstanding immediately prior to the effective time of the Merger (the "Effective Time"), shall be converted automatically at the Effective Time into the right to receive from Parent $34.10 per share in cash, without interest. The $34.10 per share cash payment is subject to reduction as a result of the Special Dividend paid on January 20, 2023 as described in Note 2 - Merger Agreement in the unaudited interim Condensed Consolidated Financial Statements located elsewhere in this Form 10-Q.
Previous report
In connection with the Merger, on September 8, 2023, the Company and Kroger announced that the parties had entered into a definitive agreement, dated September 8, 2023, with C&S Wholesale Grocers, LLC ("C&S") for the sale of select stores, banners, distribution centers, offices and private label brands to C&S. Also on September 8, 2023, Kroger notified the Company that, in accordance with the Merger Agreement, Kroger intends to sell the SpinCo Business (as defined in the Merger Agreement) to C&S. As a result, the creation of SpinCo and spin-off previously contemplated by the Company and Kroger is no longer a requirement under the Merger Agreement and will no longer be pursued by the Company and Kroger. Details regarding the definitive agreement with C&S can be found in the Form 8-K filed on September 8, 2023 and the joint press release issued by the Company and Kroger on September 8, 2023.
Previous report
•Identical sales increased 2.9%
Previous report
•Digital sales increased 21%
Previous report
•Loyalty members increased 17% to 38.5 million
Previous report
•Net income of $361 million, or $0.62 per Class A common share
Previous report
•Adjusted net income of $462 million, or $0.79 per Class A common share
Previous report
•Adjusted EBITDA of $1,107 million
Previous report
Net sales and other revenue increased 2.5% to $60,898.2 million for the first 40 weeks of fiscal 2023 from $59,384.6 million for the first 40 weeks of fiscal 2022. The increase in Net sales and other revenue was primarily driven by our 3.7% increase in identical sales, with growth in pharmacy sales, retail price inflation across most categories and increasing digital sales being the primary contributors to the identical sales increase. The increase in Net sales and other revenue was partially offset by lower fuel sales.
Previous report
Gross margin rate decreased to 27.8% during the first 40 weeks of fiscal 2023 compared to 28.1% during the first 40 weeks of fiscal 2022. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 66 basis points compared to the first 40 weeks of fiscal 2022. The rate decrease was primarily driven by pharmacy operations, increases in shrink, and an increase in promotional activity in the first quarter of fiscal 2023 relative to the first quarter of fiscal 2022. Our procurement and sourcing productivity initiatives partially offset these decreases in our gross profit rate.
Previous report
The gross margin rate decrease in the third quarter of fiscal 2023 and first 40 weeks of fiscal 2023 related to pharmacy operations was primarily due to growth in pharmacy sales and a lower margin rate on COVID-19 vaccines. In addition, the benefits from our productivity initiatives allowed us to provide incremental targeted price investments to our customers during the third quarter of fiscal 2023 and first 40 weeks of fiscal 2023.
Previous report
Selling and administrative expenses decreased to 25.0% of Net sales and other revenue during both the first 40 weeks of fiscal 2023 compared to 25.1% during the first 40 weeks of fiscal 2022. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue decreased 32 basis points during the first 40 weeks of fiscal 2023 compared to the first 40 weeks of fiscal 2022. The decrease in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to sales leverage of employee costs, which includes the benefit of ongoing productivity initiatives, lower depreciation and amortization and lower legal and regulatory accruals and settlements, partially offset by ongoing Merger-related costs, an increase in operating expenses related to the expansion of our digital and omnichannel capabilities and additional third-party store security services.
Previous report
For the first 40 weeks of fiscal 2023, net loss on property dispositions and impairment losses was $43.1 million, primarily driven by the write-off of certain technology assets, partially offset by net gains from the sale of assets. For the first 40 weeks of fiscal 2022, net gain on property dispositions and impairment losses was $86.1 million, driven by $91.2 million of gains primarily from the sale of real estate assets, partially offset by $5.1 million of asset impairments.
Previous report
Interest expense, net was $383.1 million during the first 40 weeks of fiscal 2023 compared to $313.0 million during the first 40 weeks of fiscal 2022. The increase in interest expense, net was primarily attributable to higher average outstanding borrowings and higher average interest rates, as well as lower interest income. The weighted average interest rate during the first 40 weeks of fiscal 2023 was 5.6%, excluding amortization and write-off of deferred financing costs and original issue discount, compared to 5.3% during the first 40 weeks of fiscal 2022.
Previous report
Other (Income) Expense, Net
Previous report
Income tax expense was $95.1 million, representing a 20.8% effective tax rate, for the third quarter of fiscal 2023. Income tax expense was $120.9 million, representing a 24.4% effective tax rate, for the third quarter of fiscal 2022. The favorability in the effective income tax rate in the third quarter of fiscal 2023 was primarily due to an increase in federal tax credits.
Previous report
Net income was $361.4 million, or $0.62 per Class A common share, during the third quarter of fiscal 2023 compared to $375.5 million, or $0.20 per Class A common share, during the third quarter of fiscal 2022. Net income per Class A common share during the third quarter of fiscal 2022 includes a $0.45 per share reduction related to the Special Dividend attributable to holders of Convertible Preferred Stock on an as-converted basis. Adjusted net income was $462.3 million, or $0.79 per Class A common share, during the third quarter of fiscal 2023 compared to $505.1 million, or $0.87 per Class A common share, during the third quarter of fiscal 2022.
Previous report
For the third quarter of fiscal 2023, Adjusted EBITDA was $1,106.5 million, or 6.0% of Net sales and other revenue, compared to $1,158.0 million, or 6.4% of Net sales and other revenue, for the third quarter of fiscal 2022. For the first 40 weeks of fiscal 2023, Adjusted EBITDA was $3,401.9 million, or 5.6% of Net sales and other revenue, compared to $3,626.8 million, or 6.1% of Net sales and other revenue for the first 40 weeks of fiscal 2022.
Previous report
(2) Represents incremental COVID-19 related pay legislatively required in certain municipalities in which we operate.
Previous report
(5) Represents the conversion of Convertible Preferred Stock to the fully outstanding as-converted Class A common shares as of the end of each respective period, for periods in which the Convertible Preferred Stock is antidilutive under GAAP.
Previous report
(d) (Gain) loss on interest rate swaps and energy hedges, net:
Previous report
Net Cash (Used in) Provided by Financing Activities
Previous report
During the first quarter of fiscal 2023, the conversion of the remaining Convertible Preferred Stock was completed. The holders of Convertible Preferred Stock were entitled to a quarterly dividend at a rate per annum of 6.75% of the liquidation preference per share of the Convertible Preferred Stock. In addition, the holders of Convertible Preferred Stock participate in cash dividends that we pay on our common stock to the extent that such cash dividends exceed $206.25 million per fiscal year and shares of Convertible Preferred Stock remain outstanding as of the applicable record date to participate in such dividends. Cash dividends paid to holders of the Convertible Preferred Stock were $0.8 million and $50.2 million during the first 40 weeks of fiscal 2023 and first 40 weeks of fiscal 2022, respectively.
Previous report
On October 13, 2022, we declared the Special Dividend, payable to stockholders of record, including holders of Series A convertible preferred stock on an as-converted basis, as of the close of business on October 24, 2022, and was to be paid on November 7, 2022. As of December 3, 2022, the Special Dividend of $3,921.3 million was recorded in Special dividend payable on the Condensed Consolidated Balance Sheets, and was subsequently paid on January 20, 2023.
Reworded paragraphs (34)
Previous wording
• erosion of consumer confidence as a result of the Merger and the transactions contemplated by the Merger Agreement;
Current wording
• erosion of consumer confidence in our business as a result of the Merger;
Previous wording
• challenges in attracting, retaining and motivating our employees until the closing of the Merger;
Current wording
• challenges in retaining and motivating our associates until the closing of the Merger, particularly following the public announcement of the locations to be divested, with difficulties in attracting new employees during the pendency of the Merger;
Previous wording
• rates of food price inflation or deflation, as well as fuel and commodity prices;
Current wording
• changes in macroeconomic conditions such as rates of food price inflation or deflation, fuel and commodity prices and expiration of student loan payment deferments;
Previous wording
• changes in consumer behavior and spending due to the impact of macroeconomic factors, including the expiration of student loan payment deferments;
Current wording
• changes in consumer behavior and spending due to the impact of macroeconomic factors;
Previous wording
• operational and financial effects resulting from cyber incidents, including outages in the cloud environment and the effectiveness of business continuity plans during a ransomware or other cyber incident; and
Current wording
• operational and financial effects resulting from cyber incidents at the Company or at a third party, including outages in the cloud environment and the effectiveness of business continuity plans during a ransomware or other cyber incident; and
Previous wording
We define EBITDA as GAAP earnings (net loss) before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as earnings (net loss) before interest, income taxes, depreciation and amortization, further adjusted to eliminate the effects of items management does not consider in assessing our ongoing core performance. We define Adjusted net income as GAAP Net income adjusted to eliminate the effects of items management does not consider in assessing our ongoing core performance. We define Adjusted net income per Class A common share as Adjusted net income divided by the weighted average diluted Class A common shares outstanding, as adjusted to reflect all RSUs and RSAs outstanding at the end of the period, as well as the conversion of Convertible Preferred Stock when it is antidilutive for GAAP. See "Results of Operations" for further discussion and a reconciliation of Adjusted EBITDA, Adjusted net income and Adjusted net income per Class A common share.
Current wording
We define EBITDA as GAAP earnings (net loss) before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as earnings (net loss) before interest, income taxes, depreciation and amortization, further adjusted to eliminate the effects of items management does not consider in assessing our ongoing core performance. We define Adjusted net income as GAAP Net income adjusted to eliminate the effects of items management does not consider in assessing our ongoing core performance. We define Adjusted net income per Class A common share as Adjusted net income divided by the weighted average diluted Class A common shares outstanding, as adjusted to reflect all RSUs and RSAs outstanding at the end of the period, as well as the conversion of Convertible Preferred
Previous wording
THIRD QUARTER OF FISCAL 2023 OVERVIEW
Current wording
FIRST QUARTER OF FISCAL 2024 OVERVIEW
Previous wording
We are one of the largest food retailers in the United States, with 2,271 stores across 34 states and the District of Columbia as of December 2, 2023. We operate 24 banners including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw's, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Marketsand Balducci's Food Lovers Market, with approximately 290,000 talented and dedicated employees, as of December 2, 2023, who serve on average 35.0 million customers each week. Additionally, as of December 2, 2023, we operated 1,726 pharmacies, 1,332 in-store branded coffee shops, 401 associated fuel centers, 22 dedicated distribution centers, 19 manufacturing facilities and various digital platforms.
Current wording
We are one of the largest food retailers in the United States, with 2,269 stores across 34 states and the District of Columbia as of June 15, 2024. We operate more than 20 well known banners including Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw's, Star Market, United Supermarkets, Market Street, Haggen, Kings Food Marketsand Balducci's Food Lovers Market, with approximately 285,000 talented and dedicated employees, as of June 15, 2024, who serve on average 36.3 million customers each week. Additionally, as of June 15, 2024, we operated 1,725 pharmacies, 1,346 in-store branded coffee shops, 403 associated fuel centers, 22 dedicated distribution centers, 19 manufacturing facilities and various digital platforms.
Previous wording
On October 13, 2022 Albertsons Companies, Inc. (the "Company"), The Kroger Co. ("Kroger" or "Parent") and Kettle Merger Sub, Inc., a wholly owned subsidiary of Parent ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub will be merged with and into the Company (the "Merger"), with the Company surviving the Merger as the surviving corporation and a direct, wholly owned subsidiary of Parent.
Current wording
On October 13, 2022, the Company, The Kroger Co. ("Parent") and Kettle Merger Sub, Inc., a wholly owned subsidiary of Parent ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub will be merged with and into the Company (the "Merger"), with the Company surviving the Merger as the surviving corporation and a direct, wholly owned subsidiary of Parent. For additional information about the Merger, see Note 2 - Merger Agreement in the unaudited interim Condensed Consolidated Financial Statements located elsewhere in this Form 10-Q.
Previous wording
Third quarter of fiscal 2023 highlights
Current wording
First quarter of fiscal 2024 highlights
Previous wording
In summary, our financial and operating highlights for the third quarter of fiscal 2023 include:
Current wording
In summary, our financial and operating highlights for the first quarter of fiscal 2024 include:
Previous wording
Comparison of the Third Quarter of Fiscal 2023 and the First 40 weeks of Fiscal 2023 to the Third Quarter of Fiscal 2022 and the First 40 weeks of Fiscal 2022.
Current wording
Comparison of the First Quarter of Fiscal 2024 to the First Quarter of Fiscal 2023.
Previous wording
The following tables and related discussion set forth certain information and comparisons regarding the components of our Condensed Consolidated Statements of Operations for the 12 and 40 weeks ended December 2, 2023 ("third quarter of fiscal 2023" and "first 40 weeks of fiscal 2023") and 12 and 40 weeks ended December 3, 2022 ("third quarter of fiscal 2022" and "first 40 weeks of fiscal 2022") (dollars in millions, except per share data).
Current wording
The following tables and related discussion set forth certain information and comparisons regarding the components of our Condensed Consolidated Statements of Operations for the 16 weeks ended June 15, 2024 ("first quarter of fiscal 2024" and "first 16 weeks of fiscal 2024") and 16 weeks ended June 17, 2023 ("first quarter of fiscal 2023" and "first 16 weeks of fiscal 2023") (dollars in millions, except per share data).
Previous wording
Net sales and other revenue increased 2.2% to $18,557.3 million for the third quarter of fiscal 2023 from $18,154.9 million for the third quarter of fiscal 2022. The increase in Net sales and other revenue was driven by our 2.9% increase in identical sales, with growth in pharmacy sales driving the identical sales increase. We also continued to grow our digital business during the third quarter of fiscal 2023.
Current wording
Net sales and other revenue increased 0.9% to $24,265.4 million for the first quarter of fiscal 2024 from $24,050.2 million for the first quarter of fiscal 2023. The increase in Net sales and other revenue was driven by our 1.4% increase in identical sales, with strong growth in pharmacy sales driving the identical sales increase. We also continued to grow our digital sales during the first quarter of fiscal 2024. The increase in Net sales and other revenue was partially offset by lower fuel sales.
Previous wording
Identical sales include stores operating during the same period in both the current year and the prior year, comparing sales on a daily basis. Direct to consumer digital sales are included in identical sales, and fuel sales are excluded from identical sales. Acquired stores become identical on the one-year anniversary date of the acquisition. Identical sales for the 12 and 40 weeks ended December 2, 2023 and the 12 and 40 weeks ended December 3, 2022, respectively, were:
Current wording
Identical sales include stores operating during the same period in both the current year and the prior year, comparing sales on a daily basis. Direct to consumer digital sales are included in identical sales, and fuel sales are excluded from identical sales. Acquired stores become identical on the one-year anniversary date of the acquisition. Identical sales for the 16 weeks ended June 15, 2024 and the 16 weeks ended June 17, 2023, respectively, were:
Previous wording
(4) Consists primarily of wholesale revenue to third parties, commissions and other miscellaneous revenue.
Current wording
(4) Consists primarily of wholesale revenue to third parties, commissions, rental income and other miscellaneous revenue.
Previous wording
Gross margin rate decreased to 28.0% during the third quarter of fiscal 2023 compared to 28.2% during the third quarter of fiscal 2022. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 64 basis points compared to the third quarter of fiscal 2022. Pharmacy operations and increases in shrink were the primary drivers of the decrease, partially offset by our procurement and sourcing productivity initiatives.
Current wording
Gross margin rate increased to 27.8% during the first quarter of fiscal 2024 compared to 27.7% during the first quarter of fiscal 2023. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 22 basis points compared to the first quarter of fiscal 2023. The strong growth in pharmacy sales, which carries an overall lower gross margin rate, increases in shrink, and increases in picking and delivery costs related to the continued growth in our digital sales were the primary drivers of the decrease, partially offset by our procurement and sourcing productivity initiatives.
Previous wording
Selling and administrative expenses decreased to 24.8% of Net sales and other revenue during the third quarter of fiscal 2023 compared to 25.0% during the third quarter of fiscal 2022. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue decreased 28 basis points. The decrease in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to lower employee costs, which includes the benefit of ongoing productivity initiatives, and lower depreciation and amortization, partially offset by an increase in operating expenses related to the expansion of our digital and omnichannel capabilities, ongoing Merger-related costs, increased store occupancy costs and additional third-party store security services.
Current wording
Selling and administrative expenses increased to 25.9% of Net sales and other revenue during the first quarter of fiscal 2024 compared to 25.0% during the first quarter of fiscal 2023. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue increased 79 basis points. The increase in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to an increase in operating expenses related to the ongoing development of our digital and omnichannel capabilities, Merger-related costs, higher employee costs, increased store occupancy costs and additional third-party store security services, partially offset by the benefit of productivity initiatives.
Previous wording
Loss (Gain) on Property Dispositions and Impairment Losses, Net
Current wording
Loss on Property Dispositions and Impairment Losses, Net
Previous wording
For the third quarter of fiscal 2023, net loss on property dispositions and impairment losses was $23.9 million, primarily driven by the write-off of certain technology assets, partially offset by net gains from the sale of assets. For the third quarter of fiscal 2022, net loss on property dispositions and impairment losses was $7.3 million, driven by $3.9 million of asset impairments and $3.4 million of losses primarily from the disposal of assets.
Current wording
For the first quarter of fiscal 2024, net loss on property dispositions and impairment losses was $5.3 million, primarily driven by the impairment of certain technology assets. For the first quarter of fiscal 2023, net loss on property dispositions and impairment losses was $27.6 million, primarily driven by the impairment and disposal of certain technology assets.
Previous wording
Interest expense, net was $116.3 million during the third quarter of fiscal 2023 compared to $84.3 million during the third quarter of fiscal 2022. The increase in interest expense, net was primarily attributable to lower interest income, as well as higher average outstanding borrowings and higher average interest rates. The weighted average interest rate during the third quarter of fiscal 2023 was 5.6%, excluding deferred financing costs and original issue discount, compared to 5.3% during the third quarter of fiscal 2022.
Current wording
Interest expense, net was $145.7 million during the first quarter of fiscal 2024 compared to $154.9 million during the first quarter of fiscal 2023. The decrease in interest expense, net was primarily attributable to lower average outstanding borrowings. The weighted average interest rate during both the first quarter of fiscal 2024 and the first quarter of fiscal 2023 was 5.6%, excluding deferred financing costs and original issue discount.
Previous wording
For the third quarter of fiscal 2023, other income, net was $6.7 million compared to other expense, net of $1.7 million for the third quarter of fiscal 2022. Other income, net during the third quarter of fiscal 2023 was primarily driven by realized and unrealized gains from non-operating investments and non-service cost components of net pension and post-retirement income, partially offset by unrealized losses from non-operating investments. Other expense, net during the third quarter of fiscal 2022 was primarily driven by unrealized losses from non-operating investments, partially offset by non-service cost components of net pension and post-retirement income and income related to our equity investment.
Current wording
For the first quarter of fiscal 2024, other expense, net was $4.0 million compared to other income, net of $16.0 million for the first quarter of fiscal 2023. Other expense, net during the first quarter of fiscal 2024 was primarily driven by unrealized losses from non-operating investments, partially offset by non-service cost components of net pension and post-retirement income. Other income, net during the first quarter of fiscal 2023 was primarily driven by income related to our equity interest and gain on sale of El Rancho, as well as non-service cost components of net pension and post-retirement income, partially offset by realized losses from non-operating investments.
Previous wording
Income tax expense was $228.7 million, representing a 17.9% effective tax rate, for the first 40 weeks of fiscal 2023. Income tax expense was $381.6 million, representing a 24.1% effective tax rate, for the first 40 weeks of fiscal 2022. The favorability in the effective income tax rate for the first 40 weeks of fiscal 2023 was driven by the reduction of a reserve of $49.7 million for an uncertain tax position due to the expiration of a foreign statute during the first quarter of fiscal 2023, federal tax credits, as well as discrete benefits recognized for state income taxes.
Current wording
Income tax expense was $69.2 million, representing a 22.3% effective tax rate, for the first quarter of fiscal 2024. Income tax expense was $66.1 million, representing a 13.7% effective tax rate, for the first quarter of fiscal 2023. The increase in the effective income tax rate in the first quarter of fiscal 2024 was primarily driven by the reduction of a reserve of $49.7 million for an uncertain tax position due to the expiration of a foreign statute during the first quarter of fiscal 2023.
Previous wording
Net income was $1,045.5 million, or $1.80 per Class A common share, during the first 40 weeks of fiscal 2023 compared to $1,202.4 million, or $1.72 per Class A common share, during the first 40 weeks of fiscal 2022. The first 40 weeks of fiscal 2023 included the $49.7 million or $0.09 per share benefit related to the reduction in the reserve for an uncertain tax position. Adjusted net income was $1,375.7 million, or $2.34 per Class A common share (which includes the tax benefit discussed above), during the first 40 weeks of fiscal 2023 compared to $1,505.4 million, or $2.59 per Class A common share, during the first 40 weeks of fiscal 2022.
Current wording
Net income was $240.7 million, or $0.41 per Class A common share, during the first quarter of fiscal 2024 compared to $417.2 million, or $0.72 per Class A common share, during the first quarter of fiscal 2023. The first quarter of fiscal 2023 included the $49.7 million or $0.09 per share benefit related to the reduction in the reserve for an uncertain tax position. Adjusted net income was $391.6 million, or $0.66 per Class A common share, during the first quarter of fiscal 2024 compared to $545.7 million, or $0.93 per Class A common share (which includes the tax benefit discussed above), during the first quarter of fiscal 2023.
Previous wording
(3) Primarily relates to third-party legal and advisor fees and retention program expense related to the proposed Merger and costs in connection with our previously-announced Board-led review of potential strategic alternatives.
Current wording
(2) Primarily relates to third-party legal and advisor fees and retention program expense related to the proposed Merger.
Previous wording
Net cash provided by operating activities was $1,730.8 million for the first 40 weeks of fiscal 2023 compared to $2,072.0 million for the first 40 weeks of fiscal 2022. The decrease in cash flow from operations compared to the first 40 weeks of fiscal 2022 was due to a decrease in Adjusted EBITDA and more cash paid for income taxes, interest, legal settlements and ongoing Merger-related costs during the first 40 weeks of fiscal 2023, partially offset by changes in working capital.
Current wording
Net cash provided by operating activities was $960.9 million for the first 16 weeks of fiscal 2024 compared to $838.3 million for the first 16 weeks of fiscal 2023. The increase in cash flow from operations compared to the first 16 weeks of fiscal 2023 was due to changes in working capital, primarily related to lower inventory, and less cash paid for taxes and interest, partially offset by a decrease in Adjusted EBITDA and higher Merger-related costs during the first 16 weeks of fiscal 2024.
Previous wording
Net cash used in investing activities was $1,328.8 million for thefirst 40 weeks of fiscal 2023 compared to $1,478.7 million for the first 40 weeks of fiscal 2022.
Current wording
Net cash used in investing activities was $538.0 million for thefirst 16 weeks of fiscal 2024 compared to $453.9 million for the first 16 weeks of fiscal 2023.
Previous wording
For the first 40 weeks of fiscal 2023, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $1,535.0 million, partially offset by proceeds from the sale of assets of $201.3 million, primarily related to the sale of our equity interest in El Rancho during the first quarter of fiscal 2023. Payments for property, equipment and intangibles in the first 40 weeks of fiscal 2023 included the completion of 115 remodels, the opening of five new stores and continued investment in our digital and technology platforms. For the first 40 weeks of fiscal 2022, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $1,566.9 million, partially offset by proceeds from the sale of assets of $99.4 million, primarily related to real estate. Payments for property, equipment and intangibles in the first 40 weeks of fiscal 2022 included continued investment in our digital and technology platforms, the completion of 135 remodels and the opening of two new stores.
Current wording
For the first 16 weeks of fiscal 2024, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $543.0 million, partially offset by proceeds from the sale of assets of $3.8 million, primarily related to real estate. Payments for property, equipment and intangibles in the first 16 weeks of fiscal 2024 included the completion of 17 remodels, the opening of one new store and continued investment in our digital and technology platforms. For the first 16 weeks of fiscal 2023, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $622.5 million, partially offset by proceeds from the sale of assets of $169.3 million, primarily related to the sale of our equity interest in El Rancho. Payments for property, equipment and intangibles in the first 16 weeks of fiscal 2023 included the completion of 43 remodels, the opening of two new stores and continued investment in our digital and technology platforms.
Previous wording
Net cash used in financing activities was $638.6 million during the first 40 weeks of fiscal 2023 compared to net cash provided by financing activities of $874.4 million during the first 40 weeks of fiscal 2022.
Current wording
Net cash used in financing activities was $320.8 million during the first 16 weeks of fiscal 2024 compared to net cash used in financing activities of $615.0 million during the first 16 weeks of fiscal 2023.
Previous wording
Net cash used in financing activities during the first 40 weeks of fiscal 2023 consisted primarily of the $500.0 million partial repayment of the ABL Facility, dividends paid on our Class A common stock and tax withholding payments on vesting of restricted stock units, partially offset by $150.0 million of proceeds from the issuance of debt under the ABL Facility. Net cash provided by financing activities during the first 40 weeks of fiscal 2022 consisted primarily of the $1.4 billion borrowing, which was used with cash on hand to fund the payment of the Special Dividend, partially offset by the $200.0 million subsequent partial repayment of the ABL Facility and dividends paid on our Class A common stock and Convertible Preferred Stock, as well as tax withholding payments on vesting of restricted stock units.
Current wording
Net cash used in financing activities during the first 16 weeks of fiscal 2024 consisted primarily of the $200.0 million repayment of the ABL Facility, dividends paid on our Class A common stock and tax withholding payments on vesting of restricted stock units. Net cash used in financing activities during the first 16 weeks of fiscal 2023 consisted primarily of the $500.0 million partial repayment of the ABL Facility, dividends paid on our Class A common stock and tax withholding payments on vesting of restricted stock units.
Previous wording
We have established a dividend policy pursuant to which we intend to pay a quarterly dividend on our Class A common stock. Cash dividends paid on our Class A common stock were $207.1 million ($0.36 per common share) and $190.9 million ($0.36 per common share) during the first 40 weeks of fiscal 2023 and first 40 weeks of fiscal 2022, respectively. On January 9, 2024, we announced the next quarterly dividend payment of $0.12 per share of Class A common stock to be paid on February 9, 2024 to stockholders of record as of the close of business on January 26, 2024.
Current wording
We have established a dividend policy pursuant to which we intend to pay a quarterly dividend on our Class A common stock. Cash dividends paid on our Class A common stock were $69.5 million ($0.12 per common share) and $69.0 million ($0.12 per common share) during the first 16 weeks of fiscal 2024 and first 16 weeks of fiscal 2023, respectively. On July 11, 2024, we announced the next quarterly dividend payment of $0.12 per share of Class A common stock to be paid on August 9, 2024 to stockholders of record as of the close of business on July 26, 2024.
Previous wording
Based on current operating trends, we believe that we have significant sources of cash to meet our liquidity needs for the next 12 months and for the foreseeable future, including cash on hand, cash flows from operating activities and other sources of liquidity, including borrowings under our ABL Facility. We estimate our liquidity needs over the next 12 months to be in the range of $5.0 billion to $5.7 billion. This includes $650.0 million related to outstanding borrowings under our ABL Facility for which we may, at our discretion, elect to pay all or a portion of the outstanding balance within the next 12 months; and anticipated requirements for incremental working capital, incremental Merger costs, capital expenditures, pension obligations, interest payments, quarterly dividends on Class A common stock, operating leases and finance leases. In addition, we may enter into refinancing and sale leaseback transactions from time to time. We believe we have adequate cash flow to continue to maintain our current debt ratings and to respond effectively to competitive conditions.
Current wording
Based on current operating trends, we believe that we have significant sources of cash to meet our liquidity needs for the next 12 months and for the foreseeable future, including cash on hand, cash flows from operating activities and other sources of liquidity, including the ABL Facility. We estimate our liquidity needs over the next 12 months to be approximately $5.1 billion, which includes anticipated requirements for working capital, Merger costs, capital expenditures, pension obligations, interest payments, quarterly dividends on Class A common stock, operating leases and finance leases. In addition, we may enter into refinancing and sale leaseback transactions from time to time. We believe we have adequate cash flow to continue to maintain our current debt ratings and to respond effectively to competitive conditions.
Previous wording
As of December 2, 2023, we had $650.0 million in borrowings outstanding under our ABL Facility and total availability of $3,302.2 million (net of letter of credit usage). See Note 4 – Long-Term Debt and Finance Lease Obligations located elsewhere in this Form 10-Q for further discussion.
Current wording
As of June 15, 2024, we had no borrowings outstanding under our ABL Facility and total availability of $3,954.2 million (net of letter of credit usage).
Previous wording
The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. We have chosen accounting policies that we believe are appropriate to report accurately and fairly our operating results and financial position, and we apply those accounting policies in a fair and consistent manner. See the Critical Accounting Policies section included in our Annual Report on Form 10-K for the fiscal year ended February 25, 2023, filed with the SEC on April 25, 2023, for a discussion of our significant accounting policies.
Current wording
The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. We have chosen accounting policies that we believe are appropriate to report accurately and fairly our operating results and financial position, and we apply those accounting policies in a fair and consistent manner. See the Critical Accounting
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Stock when it is antidilutive for GAAP. See "Results of Operations" for further discussion and a reconciliation of Adjusted EBITDA, Adjusted net income and Adjusted net income per Class A common share.
Current report — wording carried from elsewhere
Net Cash Used in Financing Activities
Current report — wording carried from elsewhere
Policies section included in our Annual Report on Form 10-K for the fiscal year ended February 24, 2024, filed with the SEC on April 22, 2024, for a discussion of our significant accounting policies.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For the first 40 weeks of fiscal 2023, other income, net was $14.6 million compared to $23.5 million for the first 40 weeks of fiscal 2022. Other income, net during the first 40 weeks of fiscal 2023 was primarily driven by non-service cost components of net pension and post-retirement income, realized and unrealized gains from non-operating investments and income related to our equity interest and gain on sale of El Rancho in the first quarter of fiscal 2023, partially offset by realized and unrealized losses from non-operating investments. Other income, net during the first 40 weeks of fiscal 2022 was primarily driven by non-service cost components of net pension and post-retirement income and income related to our equity investment, partially offset by unrealized losses from non-operating investments.