Albertsons Companies, Inc.
For the period ended Jun 14, 2025. Filed Jul 22, 2025.
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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 14, 2025 · Filed Jul 22, 2025
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 2024-11-30; filed 2025-01-08.
0001646972-25-000008
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-14; filed 2025-07-22.
0001646972-25-000063
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.
57 unchanged; 37 reworded; 15 added; 23 removed; 7 previous and 0 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 (15)
Current report
•uncertainty regarding the geopolitical environment;
Current report
To improve our customer value proposition, we intentionally invested in value, in both loyalty and promotional offerings, as well as by partnering with strategic vendors to invest in price in certain categories and markets. In Own Brands, we continue to focus on providing our customers with products they trust through innovation and offering products at an attractive price point. During the first quarter of fiscal 2025, we expanded the assortment in our recently introduced Overjoyed brand, and launched our newest brand, Chef's Counter, an innovative, chef-inspired meal solution.
Current report
We endeavor to use technology in everything we do and over the last few years we have invested strategically to build a best-in-class technology platform, with our core infrastructure in the Cloud and a modernized scalable network. This advanced technology platform, on which we are continuing to innovate, powers our eCommerce, store, pharmacy, supply chain, merchandising and media collective operations, and is allowing us to leverage emerging technologies to accelerate our operational transformation going forward.
Current report
•Identical sales increased 2.8%
Current report
•Digital sales increased 25%
Current report
•Loyalty members increased 14% to 47.3 million
Current report
•Net income of $236 million, or $0.41 per Class A common share
Current report
•Adjusted net income of $319 million, or $0.55 per Class A common share
Current report
•Adjusted EBITDA of $1,111 million
Current report
Net income was $236.4 million, or $0.41 per Class A common share, during the first quarter of fiscal 2025 compared to $240.7 million, or $0.41 per Class A common share, during the first quarter of fiscal 2024. Adjusted net income was $318.9 million, or $0.55 per Class A common share, during the first quarter of fiscal 2025 compared to $391.6 million, or $0.66 per Class A common share, during the first quarter of fiscal 2024.
Current report
For the first quarter of fiscal 2025, Adjusted EBITDA was $1,111.0 million, or 4.5% of Net sales and other revenue, compared to $1,183.9 million, or 4.9% of Net sales and other revenue, for the first quarter of fiscal 2024.
Current report
(i) Includes adjustments for the financial impact of other items not considered in our core performance.
Current report
Net cash used in financing activities was $422.9 million during the first quarter of fiscal 2025 compared to $320.8 million during the first quarter of fiscal 2024.
Current report
Debt Management
Current report
On March 11, 2025, we completed the issuance of $600.0 million in aggregate principal amount of 6.250% senior unsecured notes due March 15, 2033 (the "2033 Notes"). Interest on the 2033 Notes is payable semi-annually in arrears on March 15 and September 15 of each year, with the first payment commencing on September 15, 2025. On March 17, 2025, proceeds from the 2033 Notes, together with approximately $5.7 million of cash on hand, were used to (i) redeem in full the $600.0 million outstanding of our 7.500% senior unsecured notes due March 15, 2026 and (ii) pay fees and expenses related to the issuance of the 2033 Notes.
Removed paragraphs (23)
Previous report
•the termination of the Merger Agreement and our inability to successfully optimize our value-creating initiatives following the termination of the Merger Agreement;
Previous report
Customer needs for value have evolved due to inflationary pressure and so are our strategies to address those needs as we work with our vendor partners to strategically invest in price in certain categories and markets. In Own Brands, we continue to focus on providing our customers with products they trust through innovation and providing a better value, given a more price conscious customer. During the third quarter of fiscal 2024, we launched 82 new items, primarily in our new brand Overjoyed, which was created to enhance celebrations.
Previous report
We endeavor to use technology in everything we do and over the last few years we have invested strategically to have technology be the key enabler to all major growth and productivity initiatives. These investments have included migrating to the Cloud; launch of end-to-end eCommerce capabilities; enabling self-checkout; digitization of pharmacy and health; implementing productivity tools to manage store operation functions such as replenishment, shrink and labor; and embed automation across our supply chain network.
Previous report
Termination of the Merger Agreement
Previous report
As previously disclosed, on October 13, 2022, the Company, The Kroger Co. ("Kroger") and Kettle Merger Sub, Inc., a wholly owned subsidiary of Kroger ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub would have been 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 Kroger. On December 10, 2024, subsequent to the end of the third quarter of fiscal 2024, the United States District Court for the District of Oregon issued a preliminary injunction in the case Federal Trade Commission et al. v. The Kroger Company and Albertsons Companies, Inc. (Case No.: 3:24-cv-00347-AN), whereby the court enjoined the consummation of the Merger. In light of the preliminary injunction, and in accordance with Section 8.1(e) of the Merger Agreement, the Company exercised its right to terminate the Merger Agreement and sent a notice to Kroger on December 10, 2024 terminating the Merger Agreement. Also on December 10, 2024, the King County Superior Court for the State of Washington issued a permanent injunction in the case State of Washington v. Kroger Co. et al (Case No.: 24-2-00977-9 SEA) whereby it enjoined the consummation of the Merger. For additional information about the termination of the Merger Agreement, see Note 2 - Termination of the Merger Agreement in the unaudited interim Condensed Consolidated Financial Statements located elsewhere in this Form 10-Q.
Previous report
•Identical sales increased 2.0%
Previous report
•Digital sales increased 23%
Previous report
•Loyalty members increased 15% to 44.3 million
Previous report
•Net income of $401 million, or $0.69 per Class A common share
Previous report
•Adjusted net income of $420 million, or $0.71 per Class A common share
Previous report
•Adjusted EBITDA of $1,065 million
Previous report
Gross margin represents the portion of Net sales and other revenue remaining after deducting Cost of sales during the period, including purchase and distribution costs. These costs include, among other things, purchasing and sourcing costs, inbound freight costs, product quality testing costs, warehouse and distribution costs, Own Brands program costs and digital-related delivery and handling costs. Advertising, promotional expenses and vendor allowances are also components of Cost of sales.
Previous report
Selling and administrative expenses consist primarily of store level costs, including wages, employee benefits, rent, depreciation and utilities, in addition to certain back-office expenses related to our corporate and division offices.
Previous report
Selling and administrative expenses increased to 25.1% of Net sales and other revenue during the third quarter of fiscal 2024 compared to 24.8% during the third quarter of fiscal 2023. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue increased six basis points. The increase in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to Merger-related costs and an increase in occupancy costs including third-party store security services, partially offset by the leveraging of employee costs and benefits from our productivity initiatives.
Previous report
For the first 40 weeks of fiscal 2024, net loss on property dispositions and impairment losses was $59.4 million, primarily driven by $62.7 million of asset impairments including impairment losses of $39.8 million primarily related to equipment from the closing of our micro-fulfillment centers, $19.5 million of retail store impairment losses and $3.5 million related to certain technology assets, partially offset by $3.3 million of net gains from the sale of real estate assets. 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 real estate assets.
Previous report
Income tax expense was $14.5 million, representing a 3.5% effective tax rate, for the third quarter of fiscal 2024. Income tax expense was $95.1 million, representing a 20.8% effective tax rate, for the third quarter of fiscal 2023. The decrease in the effective income tax rate in the third quarter of fiscal 2024 was primarily driven by the recognition of $81.0 million of discrete state income tax benefits related to the settlement of audits.
Previous report
Net income was $400.6 million, or $0.69 per Class A common share, during the third quarter of fiscal 2024 compared to $361.4 million, or $0.62 per Class A common share, during the third quarter of fiscal 2023. The third quarter of fiscal 2024 included the $81.0 million or $0.14 per share benefit related to certain discrete state income tax benefits related to the settlement of audits. Adjusted net income was $420.3 million, or $0.71 per Class A common share, during the third quarter of fiscal 2024 compared to $462.3 million, or $0.79 per Class A common share, during the third quarter of fiscal 2023.
Previous report
Net income was $786.8 million, or $1.35 per Class A common share, during the first 40 weeks of fiscal 2024 compared to $1,045.5, or $1.80 per Class A common share, during the first 40 weeks of fiscal 2023. The first 40 weeks of fiscal 2024 included the $81.0 million or $0.14 per share benefit related to certain discrete state income tax benefits related to the settlement of audits, and 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 $1,112.9 million, or $1.88 per Class A common share, during the first 40 weeks of fiscal 2024 compared to $1,375.7 million, or $2.34 per Class A common share (which includes the $49.7 million tax benefit discussed above), during the first 40 weeks of fiscal 2023.
Previous report
For the third quarter of fiscal 2024, Adjusted EBITDA was $1,065.1 million, or 5.7% of Net sales and other revenue, compared to $1,106.5 million, or 6.0% of Net sales and other revenue, for the third quarter of fiscal 2023. For the first 40 weeks of fiscal 2024, Adjusted EBITDA was $3,149.6 million, or 5.1% of Net sales and other revenue, compared to $3,401.9 million, or 5.6% of Net sales and other revenue for the first 40 weeks of fiscal 2023.
Previous report
(i) Primarily includes adjustments for pension settlement loss, unconsolidated equity investments and other costs not considered in our core performance.
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 energy hedges, net:
Previous report
Net cash used in financing activities was $492.3 million during the first 40 weeks of fiscal 2024 compared to net cash used in financing activities of $638.6 million during the first 40 weeks of fiscal 2023.
Reworded paragraphs (37)
Previous 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;
Current wording
•changes in macroeconomic conditions such as rates of food price inflation or deflation, fuel and commodity prices and uncertainty in international trade including current and potential future tariffs;
Previous wording
•changes in consumer behavior and spending due to the impact of macroeconomic factors;
Current wording
•changes in consumer behavior and spending patterns resulting from macroeconomic conditions, including shifts in state and federal assistance programs;
Previous wording
•changes in wage rates and ability to negotiate acceptable contracts with labor unions;
Current wording
•changes in wage rates and our ability to negotiate acceptable contracts with labor unions, including the outcome of pending union negotiations;
Previous wording
•changes in price of goods sold in our stores and cost of goods used in our food products due to change in government regulations such as tariffs;
Current wording
•changes in price of goods sold in our stores and cost of goods used in our food products due to changes in various state and federal government regulations;
Previous wording
•our inability to execute on our standalone business strategies following the termination of the Merger Agreement due to prolonged uncertainties and restrictions on our business during the pendency of the Merger;
Current wording
•our inability to execute on our standalone business and value-creating strategies following the termination of the merger agreement with Kroger due to prolonged uncertainties and restrictions on our business during the pendency of the merger;
Previous wording
◦ongoing costs, including damages that we may be required to pay in connection with the lawsuit against Kroger or our inability to collect the $600 million termination fee from Kroger, all of which could be substantial; and
Current wording
•litigation in connection with the previously pending merger and the termination of the merger agreement, resulting in ongoing costs that we may be required to pay in connection with the lawsuit against Kroger, or our inability to collect the $600 million termination fee from Kroger, and negative reactions from the financial markets and our suppliers, customers, and associates as a result of the litigation;
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 outstanding at the end of the period. 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.
Previous wording
THIRD QUARTER OF FISCAL 2024 OVERVIEW
Current wording
FIRST QUARTER OF FISCAL 2025 OVERVIEW
Previous wording
We are one of the largest food retailers in the United States, with 2,273 stores across 34 states and the District of Columbia as of November 30, 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 November 30, 2024, who serve on average 35.9 million customers each week. Additionally, as of November 30, 2024, we operated 1,732 pharmacies, 1,337 in-store branded coffee shops, 405 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 2,264 stores across 35 states and the District of Columbia as of June 14, 2025. We operate 22 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 14, 2025, who serve on average 36.8 million customers each week. Additionally, as of June 14, 2025, we operated 1,725 pharmacies, 1,313 in-store branded coffee shops, 408 associated fuel centers, 22 dedicated distribution centers, 19 manufacturing facilities and various digital platforms.
Previous wording
During the third quarter of fiscal 2024, we continued to execute on our Customers for Life strategy, which is centered around driving customer growth and engagement through digital connection, enhancing the customer value proposition, modernizing capabilities through technology and driving productivity. We continue to invest in growth through our four digital platforms of eCommerce, Loyalty, Pharmacy & Health and the use of our mobile app in our stores. Collectively, these digital platforms generate growth opportunities for the Albertsons Media Collective ("AMC"). We continue to invest significantly in AMC, building industry-leading technologies to expand the reach of our brand and fuel one of the largest opportunities for reinvestment into our core business.
Current wording
During the first quarter of fiscal 2025, we continued to execute on our Customers for Life strategy, which is centered around driving customer growth and engagement through digital connection, enhancing the customer value proposition, modernizing capabilities through technology and driving productivity. We continue to invest in growth through our four digital platforms of eCommerce, Loyalty, Pharmacy & Health and the use of our mobile app in our stores. Collectively, these digital platforms generate growth opportunities for the Albertsons Media Collective ("The Collective"). We continue to invest significantly in The Collective, building industry-leading, integrated solutions to expand the reach of our brand and fuel one of the largest opportunities for reinvestment into our core business.
Previous wording
Identical sales, excluding fuel, increased 2.0% during the third quarter of fiscal 2024. We continued to invest in new merchandising initiatives and our loyalty offerings and we also deepened digital connection and engagement with our customers. During the third quarter of fiscal 2024, digital sales, which include home delivery and Drive Up & Go curbside pickup, increased 23% compared to the third quarter of fiscal 2023, as the expansion of our services and continued innovation in digital offerings resonated with customers. Loyalty members increased 15% to 44.3 million in the third quarter of fiscal 2024 compared to the third quarter of fiscal 2023.
Current wording
Identical sales, excluding fuel, increased 2.8% during the first quarter of fiscal 2025. We continued to invest in new merchandising initiatives and our loyalty offerings, and we also deepened digital connection and engagement with our customers. During the first quarter of fiscal 2025, digital sales, which include Drive Up & Go curbside pickup and home delivery, increased 25% compared to the first quarter of fiscal 2024, as our focus on delivering an exceptional service experience is fueling new customer acquisition and strengthening existing customer retention. We continue to enhance our digital shopping experience, introducing emerging technologies and interactive features that deliver both ease and convenience. Loyalty members increased 14% to 47.3 million in the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024.
Previous wording
Our capital allocation strategy balances investing for the future, strengthening our balance sheet and returns to shareholders through a combination of dividends and opportunistic share repurchases. Capital expenditures were approximately $1,447 million during the first 40 weeks of fiscal 2024, primarily including the completion of 84 remodels, the opening of nine new stores and continued investment in our digital and technology platforms. Capital returns to shareholders during the first 40 weeks of fiscal 2024 included $208.5 million of common stock dividends ($0.36 per common share). On December 11, 2024, we increased the quarterly cash dividend from $0.12 per common share to $0.15 per common share.
Current wording
Our capital allocation strategy balances investing for the future, strengthening our balance sheet and returns to shareholders through a combination of dividends and opportunistic share repurchases. Capital expenditures were approximately $585 million during the first quarter of fiscal 2025, primarily including the completion of 36 remodels, the opening of three new stores and continued investment in our digital and technology platforms. Capital returns to shareholders during the first quarter of fiscal 2025 included $85.7 million of common stock dividends ($0.15 per common share) and the repurchase of 14.2 million shares of common stock for a total of $314.8 million.
Previous wording
Third quarter of fiscal 2024 highlights
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First quarter of fiscal 2025 highlights
Previous wording
In summary, our financial and operating highlights for the third quarter of fiscal 2024 include:
Current wording
In summary, our financial and operating highlights for the first quarter of fiscal 2025 include:
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Comparison of the Third Quarter of Fiscal 2024 and the First 40 weeks of Fiscal 2024 to the Third Quarter of Fiscal 2023 and the First 40 weeks of Fiscal 2023.
Current wording
Comparison of the First Quarter of Fiscal 2025 to the First Quarter of Fiscal 2024.
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 November 30, 2024 ("third quarter of fiscal 2024" and "first 40 weeks of fiscal 2024") and 12 and 40 weeks ended December 2, 2023 ("third quarter of fiscal 2023" and "first 40 weeks of fiscal 2023") (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 14, 2025 ("first quarter of fiscal 2025") and 16 weeks ended June 15, 2024 ("first quarter of fiscal 2024") (dollars in millions, except per share data).
Previous wording
Net sales and other revenue increased 1.2% to $18,774.5 million for the third quarter of fiscal 2024 from $18,557.3 million for the third quarter of fiscal 2023. The increase in Net sales and other revenue was driven by our 2.0% increase in identical sales, with strong growth in pharmacy sales being the primary driver of the identical sales increase. We also continued to grow our digital sales during the third quarter of fiscal 2024. The increase in Net sales and other revenue was partially offset by lower fuel sales.
Current wording
Net sales and other revenue increased 2.5% to $24,880.8 million for the first quarter of fiscal 2025 from $24,265.4 million for the first quarter of fiscal 2024. This increase in Net sales and other revenue was primarily driven by a 2.8% increase in identical sales, with strong growth in pharmacy sales being the primary driver of the identical sales increase. We also continued to grow our digital sales during the first quarter of fiscal 2025. These increases in Net sales and other revenue were 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 November 30, 2024 and the 12 and 40 weeks ended December 2, 2023, 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 14, 2025 and the 16 weeks ended June 15, 2024, respectively, were:
Previous wording
(4) Consists primarily of wholesale revenue to third parties, commissions, rental income and other miscellaneous revenue.
Current wording
(4) Consists primarily of wholesale revenue to third parties, commissions, rental income, media advertising revenue and other miscellaneous revenue.
Previous wording
Gross margin rate decreased to 27.9% during the third quarter of fiscal 2024 compared to 28.0% during the third quarter of fiscal 2023. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 27 basis points compared to the third quarter of fiscal 2023. The strong growth in pharmacy sales, which carries an overall lower gross margin rate, 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 the benefits from our productivity initiatives.
Current wording
Gross margin rate decreased to 27.1% during the first quarter of fiscal 2025 compared to 27.8% during the first quarter of fiscal 2024. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 85 basis points compared to the first quarter of fiscal 2024. This decrease in gross margin rate was primarily driven by incremental investments in our customer value proposition, strong growth in pharmacy sales, which carries an overall lower gross margin rate, and increases in delivery and handling costs related to the continued growth in our digital sales, partially offset by the benefits from our productivity initiatives, which included reductions in shrink expense.
Previous wording
Selling and administrative expenses increased to 25.6% of Net sales and other revenue during the first 40 weeks of fiscal 2024 compared to 25.0% of Net sales and other revenue for the first 40 weeks of fiscal 2023. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue increased 45 basis points during the first 40 weeks of fiscal 2024 compared to the first 40 weeks of fiscal 2023. 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 and increased store occupancy costs including additional third-party store security services, partially offset by the benefits from our productivity initiatives.
Current wording
Selling and administrative expenses decreased to 25.4% of Net sales and other revenue during the first quarter of fiscal 2025 compared to 25.9% of Net sales and other revenue for the first quarter of fiscal 2024. Excluding the impact of fuel, Selling and administrative expenses as a percentage of Net sales and other revenue decreased 63 basis points compared to the first quarter of fiscal 2024. This decrease in Selling and administrative expenses as a percentage of Net sales and other revenue was primarily attributable to lower Merger-related costs, the leveraging of employee costs and operating expenses related to the continued development of our digital platforms and modernization of our technology, partially offset by increases in legal, professional and outside services as well as business transformation costs. The benefits from our productivity initiatives continue to help offset increasing wage rates and other inflationary pressures on our operating expenses.
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Loss on Property Dispositions and Impairment Losses, Net
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(Gain) Loss on Property Dispositions and Impairment Losses, Net
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For the third quarter of fiscal 2024, net loss on property dispositions and impairment losses was $10.2 million, primarily driven by $6.0 million of retail store impairment losses and $4.2 million of net losses from the sale of real estate assets and equipment disposals. 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 real estate assets.
Current wording
For the first quarter of fiscal 2025, net gain on property dispositions and impairment losses was $31.9 million, primarily driven by $45.5 million of net gains primarily from the sale of real estate assets, partially offset by $11.4 million from the impairment and disposal of certain technology assets and $2.2 million of retail store impairment losses. 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.
Previous wording
Interest expense, net was $109.0 million during the third quarter of fiscal 2024 compared to $116.3 million during the third 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 third quarter of fiscal 2024 and third quarter of fiscal 2023 was 5.6%, excluding amortization and write-off of deferred financing costs and original issue discount.
Current wording
Interest expense, net was $141.8 million during the first quarter of fiscal 2025 compared to $145.7 million during the first quarter of fiscal 2024. This 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 2025 and first quarter of fiscal 2024 was 5.6%, excluding amortization and write-off of deferred financing costs and original issue discount.
Previous wording
For the third quarter of fiscal 2024, other income, net was $5.6 million compared to other income, net of $6.7 million for the third quarter of fiscal 2023. Other income, net during the third quarter of fiscal 2024 was primarily driven by unrealized gains from non-operating investments and non-service cost components of net pension and post-retirement expense. 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.
Current wording
For the first quarter of fiscal 2025, other income, net was $3.9 million compared to other expense, net of $4.0 million for the first quarter of fiscal 2024. Other income, net during the first quarter of fiscal 2025 was primarily driven by non-service cost components of net pension and post-retirement expense, partially offset by unrealized losses from non-operating investments. 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 expense.
Previous wording
Income tax expense was $124.7 million, representing a 13.7% effective tax rate, for the first 40 weeks of fiscal 2024. Income tax expense was $228.7 million, representing a 17.9% effective tax rate, for the first 40 weeks of fiscal 2023. The decrease in the effective income tax rate was primarily driven by the recognition of $81.0 million of discrete state income tax benefits related to audit settlements, compared to a 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.
Current wording
Income tax expense was $75.0 million during the first quarter of fiscal 2025, representing a 24.1% effective tax rate. Income tax expense was $69.2 million during the first quarter of fiscal 2024, representing a 22.3% effective tax rate. This increase in the effective income tax rate was primarily driven by the reduction of a reserve for an uncertain tax position due to the expiration of a state statute in the first quarter of fiscal 2024.
Previous wording
(1) Includes costs associated with third-party consulting fees related to our Customers for Life strategy and associated business transformation initiatives.
Current wording
(1) Includes costs associated with third-party consulting fees related to our Customers for Life strategy and employee termination costs, as follows (see table below):
Previous wording
(2) Primarily relates to third-party legal and advisor fees and retention program expense related to the Merger.
Current wording
(2) The first quarter of fiscal 2025 primarily relates to litigation costs and retention program expense related to the terminated merger. The first quarter of fiscal 2024 primarily includes third-party legal and advisor fees and retention program expense related to the Merger.
Previous wording
(6) Represents incremental unvested RSUs and unvested RSAs to adjust the diluted weighted average Class A common shares outstanding during each respective period to the fully outstanding RSUs and RSAs as of the end of each respective period.
Current wording
(5) Represents incremental unvested RSUs to adjust the diluted weighted average Class A common shares outstanding during each respective period to the fully outstanding RSUs as of the end of each respective period.
Previous wording
Net cash provided by operating activities was $1,922.1 million for the first 40 weeks of fiscal 2024 compared to $1,730.8 million for the first 40 weeks of fiscal 2023. The increase in cash flow from operations compared to the first 40 weeks of fiscal 2023 was due to changes in working capital, primarily related to lower inventory, as well as less cash paid for taxes, legal settlements, multiemployer pension withdrawal liabilities and interest, partially offset by a decrease in Adjusted EBITDA, higher Merger-related costs and an increase in contributions to our defined benefit pension plans during the first 40 weeks of fiscal 2024.
Current wording
Net cash provided by operating activities was $754.4 million for the first quarter of fiscal 2025 compared to $960.9 million for the first quarter of fiscal 2024. The decrease in cash flow from operating activities during the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024 was due to a decrease in Adjusted EBITDA, cash paid for property taxes and self-insurance claims, changes in working capital, primarily related to inventory and accounts payable, and increases in business transformation costs and contributions to our defined benefit pension plans, partially offset by lower Merger-related costs.
Previous wording
Net cash used in investing activities was $1,416.5 million for thefirst 40 weeks of fiscal 2024 compared to $1,328.8 million for the first 40 weeks of fiscal 2023.
Current wording
Net cash used in investing activities was $474.1 million for thefirst quarter of fiscal 2025 compared to $538.0 million for the first quarter of fiscal 2024.
Previous wording
For the first 40 weeks of fiscal 2024, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $1,446.7 million, partially offset by proceeds from the sale of assets of $24.1 million, primarily related to real estate. Payments for property, equipment and intangibles in the first 40 weeks of fiscal 2024 included the completion of 84 remodels, the opening of nine new stores and continued investment in our digital and technology platforms. 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.
Current wording
For the first quarter of fiscal 2025, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $584.6 million, partially offset by proceeds from the sale of assets of $78.2 million, primarily related to real estate. Payments for property, equipment and intangibles in the first quarter of fiscal 2025 included the completion of 36 remodels, the opening of three new stores and continued investment in our digital and technology platforms. For the first quarter of fiscal 2024, cash used in investing activities consisted primarily of payments for property, equipment and intangibles of $543.0 million. Payments for property, equipment and intangibles in the first quarter of fiscal 2024 included the completion of 17 remodels, the opening of one new store and continued investment in our digital and technology platforms.
Previous wording
Net cash used in financing activities during the first 40 weeks of fiscal 2024 consisted primarily of the $250.0 million repayment of the ABL Facility, dividends paid on our Class A common stock, payments of obligations under finance leases and tax withholding payments on vesting of RSUs, partially offset by $50.0 million of proceeds from the issuance of long-term debt under the ABL Facility. 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, payments of obligations under finance leases and tax withholding payments on vesting of RSUs, partially offset by $150.0 million of proceeds from the issuance of long-term debt under the ABL Facility.
Current wording
Net cash used in financing activities during the first quarter of fiscal 2025 consisted primarily of the repurchase of common stock, dividends paid on our Class A common stock and tax withholding payments on vesting of RSUs, partially offset by $25.0 million of proceeds from the ABL Facility. We also had a $600.0 million issuance and subsequent $600.0 million redemption of senior unsecured notes (as further discussed below under the caption Debt Management). Net cash used in financing activities during the first quarter 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 RSUs.
Previous wording
As of November 30, 2024, we had no borrowings outstanding under our ABL Facility and total availability of $3,962.8 million (net of letter of credit usage).
Current wording
As of June 14, 2025, we had $25.0 million borrowings outstanding under our ABL Facility and total availability of $3,947.6 million (net of letter of credit usage).
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 $208.5 million ($0.36 per common share) and $207.1 million ($0.36 per common share) during the first 40 weeks of fiscal 2024 and first 40 weeks of fiscal 2023, respectively. On December 11, 2024, subsequent to the end of the third quarter of fiscal 2024, we announced that the Board of Directors (the "Board") increased the quarterly cash dividend 25% from $0.12 per common share to $0.15 per common share. On January 8, 2025, we announced the next quarterly dividend payment of $0.15 per share of Class A common stock to be paid on February 7, 2025 to stockholders of record as of the close of business on January 24, 2025.
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 $85.7 million ($0.15 per common share) and $69.5 million ($0.12 per common share) during the first quarter of fiscal 2025 and first quarter of fiscal 2024, respectively. On July 15, 2025, we announced the next quarterly dividend payment of $0.15 per share of Class A common stock to be paid on August 8, 2025 to stockholders of record as of the close of business on July 25, 2025.
Previous wording
On December 11, 2024, subsequent to the end of the third quarter of fiscal 2024, we announced that the Board has authorized a share repurchase program of up to $2.0 billion of our common stock, inclusive of the existing authorization. The share repurchase program could include open market repurchases, accelerated share repurchase programs, tender offers, block trades, potential privately negotiated transactions, or trading plans in compliance with the federal securities laws.
Current wording
The Board has authorized a multi-year share repurchase program of up to $2.0 billion of our common stock. The share repurchase program could include open market repurchases, accelerated share repurchase programs, tender offers, block trades, potential privately negotiated transactions, or trading plans in compliance with the federal securities laws. During the first quarter of fiscal 2025, we repurchased an aggregate of 14.2 million shares of common stock for a total of $314.8 million.
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 the ABL Facility. We estimate our liquidity needs over the next 12 months to be approximately $5.0 billion, which includes anticipated requirements for working capital, 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 $5.5 billion, which includes anticipated requirements for incremental working capital, capital expenditures, pension obligations, interest payments, quarterly dividends on Class A common stock, common stock repurchases, 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.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
•litigation in connection with the previously pending Merger and the termination of the Merger Agreement, resulting in:
Previous report — wording carried elsewhere
◦negative reactions from the financial markets and our suppliers, customers, and associates;
Previous report — wording carried elsewhere
•significant transaction costs related to the previously pending Merger;
Previous report — wording carried elsewhere
Net sales and other revenue increased 1.1% to $61,591.4 million for the first 40 weeks of fiscal 2024 from $60,898.2 million for the first 40 weeks of fiscal 2023. The increase in Net sales and other revenue was primarily driven by our 1.9% increase in identical sales, with strong growth in pharmacy sales being the primary driver of the identical sales increase. We also continued to grow our digital sales during the first 40 weeks of fiscal 2024. The increase in Net sales and other revenue was partially offset by lower fuel sales.
Previous report — wording carried elsewhere
Gross margin rate was unchanged at 27.8% during both the first 40 weeks of fiscal 2024 and the first 40 weeks of fiscal 2023. Excluding the impact of fuel and LIFO expense, gross margin rate decreased 30 basis points compared to the first 40 weeks of fiscal 2023. The strong growth in pharmacy sales, which carries an overall lower gross margin rate, 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 the benefits from our productivity initiatives.
Previous report — wording carried elsewhere
Interest expense, net was $358.3 million during the first 40 weeks of fiscal 2024 compared to $383.1 million during the first 40 weeks 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 40 weeks of fiscal 2024 and first 40 weeks of fiscal 2023 was 5.6%, excluding amortization and write-off of deferred financing costs and original issue discount.
Previous report — wording carried elsewhere
For the first 40 weeks of fiscal 2024, other expense, net was $0.3 million compared to other income, net of $14.6 million for the first 40 weeks of fiscal 2023. Other expense, net during the first 40 weeks of fiscal 2024 was primarily driven by non-service cost components of net pension and post-retirement expense and unrealized gains and losses from non-operating investments. 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.