Albertsons' (ACI) fiscal Q1 margins could face pressure from pharmacy mix, reinvestment and e-commerce growth, while topline is expected to be steady, RBC Capital Markets said in a Tuesday note.
RBC estimates a year-on-year contraction of around 25 basis points in fiscal Q1 gross margin and a 7% decline in adjusted earnings before interest, taxes, depreciation and amortization to $1.10 billion. The quarter's identical sales, meanwhile, are projected to increase by 2.2%, according to the note.
"Our state-weighted scanner analysis plus the Kroger (KR) read through give us confidence that top-line has held steady," said RBC.
RBC has an outperform rating on Albertsons, with a $23 price target.
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