Chain Drug Review, February 4, 2019

Chain Drug Review February 4 2019 13 Business Albertsons reports strong Q3 gains in sales earnings BOISE Idaho Albertsons Cos last month reported strong gains for the third quarter of fiscal 2018 which ended December 1 The companys third quarter adjusted EBITDA earnings before interest taxes depreciation and amortization rose 514 to 6497 million driven by an identical store sales gain increased gross profit and cost cutting Sales and other revenue in the 12 week quarter increased 18 from a year earlier to 138 billion with identical store sales rising 19 We continue to gain traction in our efforts to deliver a seamless shopping experience for our customers in both the four wall and no wall environment said president and chief executive officer Jim Donald The third quarter marked our strongest identical sales increase since the first quarter of fiscal 2016 Identical sales grew for the fourth consecutive quarter and adjusted EBITDA grew over 50 compared to the same quarter last year as the business has rebounded from fiscal 2017 We achieved a record high sales penetration rate on our own brands products as we continue to delight our customers with our portfolio of awardwinning Sales were elevated in part by higher fuel sales of 917 million partially offset by a reduction in sales related to the stores closed in the first three quarters Gross profit margin increased to 278 compared to 267 in the year ago period Excluding the impact of fuel gross profit margin increased 140 basis points The increase was primarily attributable to improved shrink expense as a percentage of sales lower advertising costs improved penetration in own brands and the cost reduction Albertsons Cos noted that on November 16 before the end of the third quarter it refinanced its term loan and asset based loan facilities In tandem with the refinancing the company paid down about 976 million in aggregate principal amount of term loans using cash on hand and 410 million in borrowings from its asset based loan facility Also before the quarters end Albertsons Cos repaid 610 million in borrowings under its asset based loan facility and its Safeway subsidiary purchased 23 million in its 745 senior notes due 2027 and 311 million in 725 debentures due in 2031 The transaction was funded using cash on hand and 200 million in borrowings under the companys asset based loan facility Albertsons Cos added that under its 4 billion asset based loan facility it currently has 34 billion available and no outstanding borrowings The companys long term debt stood at nearly 1066 billion as of December 1 compared with 1171 billion as of February 24 We also successfully refinanced the quarter as we secure longterm balance sheet added Donald For the 40 weeks through December 1 Albertsons Cos posted a revenue increase of 14 to 465 billion Identicalstore the year to date The company recorded a net loss of 45 million 342 million in the prior year period which included a goodwill 1423 million Adjusted EBITDA Target holiday sales grow online and off line Year to Date Stock Trends brands Chain drug stocks Close as of 1 9 19 Close at start of year 1 2 19 Net change year to date change year to date based loan facilities during 52 week high our term loan and asset financing and delever our sales inched up 09 for compared to net loss of impairment charge of 52 week low Div Yield P E ratio Dow Jones Composite Average 789768 770120 19648 255 897601 721563 CVS Health 6604 6558 046 070 8388 6014 200 30 22 Rite Aid 081 077 004 519 255 060 1 Walgreens Boots Alliance 7223 6804 419 616 8631 5907 176 26 13 Canadian chain drug stocks Close as of 1 9 19 Close at start of year 1 2 19 Net change year to date change year to date 52 week high 52 week low Div Yield P E ratio Metro 4750 4672 078 167 4809 3832 072 15 7 Loblaw includes Shoppers Drug Mart 6248 6105 143 234 6319 5026 118 20 44 Figures are in Canadian dollars Parent companies combo operators Close as of 1 9 19 Close at start of year 1 2 19 Net change year to date change year to date 52 week high 52 week low Div Yield P E ratio Ahold Delhaize combos 2580 2507 073 291 2629 2102 078 31 13 AmerisourceBergen GNP 7632 7445 187 251 10627 6936 160 22 10 Cardinal Health Medicine Shoppe 4658 4507 151 335 7575 4217 191 43 20 Kroger combos 2805 2730 075 275 3274 2285 056 20 6 McKesson Health Mart 11826 11307 519 459 17886 10611 156 14 208 United Natural Foods combos 1203 1092 111 1016 4995 923 5 Other retailers Close as of 1 9 19 Close at start of year 1 2 19 Net change year to date change year to date 52 week high 52 week low Div Yield P E ratio Costco 20990 20476 514 251 24516 17579 228 11 29 Freds 262 214 048 2243 430 130 Target 7029 6644 385 579 9039 6015 256 39 11 Walmart 9489 9334 155 166 10998 8178 208 22 54 for the 40 weeks was 2 billion or 43 of sales up from 17 billion or 37 of sales in the 2017 period Prior to the end of the third quarter the retailer entered a 660 million agreement for the sale and leaseback of five distribution centers The deal was closed in two separate transactions on December 17 2018 and January 2 2019 In connection with the sale and leasebacks the company also entered into lease agreements for the properties for initial terms of 15 to 20 years Looking ahead to the full 2018 fiscal year Albertsons Cos expects identical store sales gains of 08 to 1 and adjusted EBITDA guidance of 265 billion to 27 billion The latter projection includes a negative impact of 10 basis points from the industrywide recall of romaine lettuce California wildfires and the Alaska earthquake as well as incremental rent expense from distribution center sale lease backs the company said Brian Cornell MINNEAPOLIS Last month Target Corp reported strong sales gains for the November December holiday sales period and reiterated its sales and earnings guidance for the full year Targets holiday sales performance included a 57 comparable store sales gain for the combined November December period That increase comes on top of a 34 increase in the prior year period Target said the results reflect strong traffic positive store comps and comparable digital sales growth of 29 The comparable digital sales growth was driven entirely by an increase in store fulfilled digital sales the company said Targets Store Pickup plus Drive Up increased more than 60 over the prior year period For full year 2018 Target is on track to grow digital sales more than 25 for the fifth consecutive year Target also noted that all five of the companys core merchandise categories saw comparable sales growth in the November December period Growth was strongest in the toys baby and seasonal gift items categories according to the company We are very pleased with Targets holiday season performance which came on top of really strong results in the same period last year Target chairman and chief executive officer Brian Cornell said This performance demonstrates the benefit of placing our stores at the center of every way we serve our guests including both in store shopping and digital fulfillment Given our fourth quarter outlook we are on track to deliver Targets strongest fullyear comparable sales growth since 2005 market share gains across all of our core merchandising categories and doubledigit growth in adjusted EPS In 2019 we expect to build on this momentum as we gain further scale in our fulfillment capabilities and deliver profitable growth throughout the year The retailer continues to expect fourth quarter 2018 comparable sales growth of approximately 5 For the full year the company continues to expect adjusted earnings per share of 530 to 550 and GAAP EPS of 541 to 561 The 11 cent difference between expected full year adjusted EPS and GAAP EPS is driven by discrete items already reported through third quarter 2018 Target declared a quarterly dividend of 64 cents per common share The dividend is payable on March 10 to shareholders of record at the close of business February 20 The quarterly dividend will be Targets 206th consecutive dividend paid since the company became publicly held in October 1967 The discounter also announced that chief financial officer Cathy Smith will be retiring Smith will continue in her role as CFO until her successor is named and then move to an advisory role until May 2020