Jim Cramer Discussed These 7 Stocks

2. Albertsons Companies, Inc. (NYSE:ACI)

Number of Hedge Fund Holders: 58

Discussing Albertsons Companies, Inc. (NYSE:ACI), Cramer said:

“This gigantic grocery store chain was trying to merge with Kroger to create a powerhouse just so it could compete actually with Amazon, Costco, and Walmart but the deal was blocked and I think that might’ve really hurt Albertsons. In the interim, I wanna hear if there’s still a lot of food inflation to come. I also wanna know if they’ve seen any decline in the consumption of salty snacks and cookies and candy alongside the rise of the GLP-1 drugs.

Cornell Business School just put out this really amazing study. It shows a meaningful decline in the consumption of these categories, which is exactly what you’d expect… But anything that reduces consumption by double digits in some categories is gonna actually hurt Albertsons’ profitability, along with that of the processed food companies.”

Albertsons (NYSE:ACI) operates food and drug stores offering groceries, health and beauty products, pharmacy services, fuel, and more, while also manufacturing and processing food products for sale. The company operates under various store banners. The company recently reported its third-quarter earnings, posting a net income of $401 million, or $0.69 per share. Loyalty membership saw a significant increase, rising by 15% to reach 44.3 million members.

Management stated that the strategies put in place to address customers’ demand for value amid inflation are proving effective. CEO Vivek Sankaran mentioned that over the next three years, the company aims to generate $1.5 billion in savings. This will be invested into improving the customer value proposition and growth initiatives, while also helping to navigate the challenges posed by inflation.

Sankaran also highlighted that financial pressures on consumers remain significant, prompting Albertsons (NYSE:ACI) to explore further price reductions on select products. The company is closely monitoring the impact of GLP-1 weight-loss drugs on consumer behavior. He noted the significant reduction in calorie intake facilitated by these drugs and explained that if 10% of customers were to reduce their consumption by 10%, it could possibly result in a 100 basis point decline in food volume.