Albertsons Companies

Management is balancing investment and returns. Capex of about 1.84 billion dollars funded remodels, limited new stores and continued digital/technology upgrades. We view these investments as necessary to defend share and support loyalty, personalization and retail media.

However, fiscal 2025 capital returns exceeded FCF as buybacks of roughly 1.49 billion dollars (including a 750 million dollar ASR) plus dividends raised net leverage.

With net debt to adjusted EBITDA at 2.24 times and a fiscal 2026 capex guide of 2.0 to 2.2 billion dollars, we would prefer buybacks be opportunistic and funded largely from incremental FCF.

The newly increased 2.0 billion dollar authorization and the 0.17 dollars quarterly dividend are shareholder friendly but should be balanced against macro and regulatory risks.