Don’t forget the real estate; maintain Marketweight

Research evidence excerpt

Don’t forget the real estate; maintain Marketweight

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Albertsons Cos Inc / Safeway

Don’t forget the real estate; maintain

Marketweight

Earnings Review

Real estate supportive of credit 23 July 2026

We maintain our Marketweight on ACI Sr Notes as we believe downside is limited by its High Yield Credit

valuable real estate portfolio. Albertsons valued its owned real-estate at $14.3 billion, United States

according to a July 2025 appraisal. With net debt of less than $9 billion and our estimate Retailing

that the company will produce over $1 billion of free cash flow over the next seven

quarters, we believe the credit remains solid.

William M. Reuter

Research Analyst

BofASExpect credit metrics deteriorate +1 646 855 6363

Albertsons plans to repurchase $2 billion of stock between FY26 and FY28. If these william.m.reuter@bofa.com

repurchases are completed, net leverage could increase to the mid-to-high 3x range by Michael DeRienzo

the end of FY28. However, the company could mitigate some of the increase by ResearchBofAS Analyst

monetizing real estate. michael.derienzo@bofa.com

1Q was below our estimates Albertsons Cos Inc / Safeway

1Q26 Adj EBITDA decreased 8% to $1.01 billion due to (1) a 1% decline in comparable (ACI)

sales; (2) 20 bps of gross margin pressure largely driven by a mix shift towards digital; Key Data 1Q2025A 1Q2026A LTM

and (3) higher rent and occupancy costs. Results were below our Adj EBITDA estimate of Operating (US$ mm)

$1.11 billion. Comparable sales decreased 1% and net revenue was flat at $24.9 billion. Revenues 24,881 24,942 83,233

Based upon debt of $9.16 billion and cash of $293 million, net leverage was 2.3x and net Adj EBITDA 1,111 1,013 3,803

lease-adjusted leverage was 3.2x at the end of the quarter. Cash from ops 754 729 2,341