Albertsons (NYSE: ACI) insiders bought shares of the grocery chain after the company reported disappointing earnings and lowered its outlook for the rest of the year.
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The purchases came shortly after ACI shares dropped sharply following its latest earnings report. The company warned that it is facing pressure from higher costs, weaker grocery sales, and financial challenges among lower-income shoppers. Plus, the buying is being seen as a sign that company leaders believe the stock has fallen too far.
CEO Makes First Open-Market Purchase
The biggest-name buyer was Albertsons CEO Susan Morris. Morris, who became CEO last year. On July 28, Morris purchased 20,277 shares for $11.46 per share. She also bought another 19,132 shares the same day for $11.38 per share. Together, the purchases gave Morris more than 39,000 additional shares.
Morris has generally received restricted stock units through Albertsons’ employee equity incentive program rather than buying shares directly on the open market. That makes her recent purchases particularly notable.
Morris wasn’t the only insider buying stock.
Thomas Moriarty, the company’s executive vice president of mergers, acquisitions, and corporate affairs, picked up 170,500 shares on July 27. He paid $11.51 per share for the stock.
CFO Sharon McCollam also bought 9,000 shares for $11.48 each.
The fact that several senior executives bought shares around the same time suggests that management may believe Albertsons stock is undervalued following the recent selloff.
Earnings Report Disappoints Investors
Albertsons recently reported its fiscal first-quarter results, and investors were not pleased.
The company reported revenue of $24.94 billion, which was slightly higher than the same period a year earlier and above analysts’ expectations. However, adjusted earnings per share came in at $0.42, missing Wall Street expectations by $0.12.
More concerning for investors was Albertsons’ decision to significantly lower its expectations for the full year. The company cut its fiscal 2026 earnings-per-share guidance by 21% at the midpoint. The new forecast calls for earnings of between $1.75 and $1.85 per share.
The grocery store chain said the weaker outlook reflects several problems, including pressure on lower-income consumers, weaker trends in grocery shopping volumes, and the possibility of higher supplier costs.
Another major concern is ACI’s profit margins.
The company said gross margins are likely to remain under pressure in the second quarter. Management expects some modest improvement during the third and fourth quarters, but margins are still expected to remain below previous levels.
Citi Downgraded the Stock
Following the earnings report, Citi analysts downgraded Albertsons from a buy rating to a hold rating, cutting their price target to $11 from $17.
The firm added that the company still has significant work to do following the failed merger attempt with Kroger (NYSE: KR). Citi also lowered its forecast for Albertsons’ fiscal 2026 earnings per share from $2.12 to $1.81. The firm now expects comparable sales to decline 0.7%, compared with its previous forecast for 0.5% growth.
What Happens Next?
ACI now has the difficult task of improving its business while dealing with higher costs and cautious consumers. The recent insider purchases are encouraging for shareholders, as several top executives are investing their own money in the company.
For now, ACI remains a company in transition. Its executives appear willing to bet on the business, but the grocery chain still has plenty of work to do. The coming quarters will be important. If management can improve operations, control costs, and win back customers, the recent stock decline could eventually look like an opportunity. If those improvements take longer than expected, however, Albertsons shares could remain under pressure.
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