DJ Grocer Albertsons Has Tried Twice to Go Public and Failed. Now It's Mulling a Third Try. -- Barrons.com
By Evie Liu
America's second-largest supermarket operator is considering going public again after two failed attempts. Albertsons, owner of grocery chains such as Safeway and Vons, was taken private in 2006 for $17.4 billion. Over the years, it has restructured a number of times, made acquisitions, and invested in technology. Its largest investor -- private equity firm Cerberus Capital Management -- has wanted to cash out for a while now.
Albertsons filed paperwork for an initial public offering in 2015, but shelved the plan because of a heavy debt burden and a lackluster retail outlook. In 2018, the grocery giant tried again by buying part of drugstore chain Rite Aid, but shareholder pushback killed that effort. Now, it's reportedly preparing for an IPO that would value it at about $19 billion.
Investors may be wary of that price tag. Although U.S. stock indexes have been hitting new highs, traditional grocers have continued to suffer amid competition from larger, better-capitalized rivals. Over the past three years, stock in Albertsons' peer Kroger has declined 14.7%, while the likes of Walmart, Costco Wholesale, and Amazon.com gained 76.4%, 93.1%, and 125.5%, respectively. Kroger posted $28 billion in sales for the latest quarter ended last November and has a $23 billion market valuation. Albertsons had $14 billion in last quarter's sales, making its $19 billion market valuation target a stretch.
Investors may be willing to buy into Albertsons' future. But the grocer has to be careful. Supermarkets aren't baseball, we know, but three whiffs at an IPO won't inspire confidence.
Next Week
Monday 1/27
D.R. Horton, Juniper Networks, PerkinElmer, and Whirlpool report quarterly results.
The Census Bureau reports new-home sales for December. Economists forecast a seasonally adjusted annual rate of 728,000 new single-family homes sold, up 1.2% from November's 719,000.
Tuesday 1/28
3M, Advanced Micro Devices, Apple, eBay, Harley-Davidson, Lockheed Martin, McCormick, Pfizer, SAP, Starbucks, and United Technologies report earnings.
The Conference Board releases its Consumer Confidence Index for January. Consensus estimates are for a 128.4 reading, up from December's 126.5 figure.
S&P CoreLogic reports its Case-Shiller 20-City Home Price Index for November. Expectations are for a 2.4% year-over-year rise in home prices, up from October's 2.2% gain.
Wednesday 1/29
The FOMC announces its monetary-policy decision. The market widely expects the central bank to keep the federal-funds rate unchanged at 1.50% to 1.75%.
Ameriprise Financial , AT&T , Automatic Data Processing , Boeing , Dow , Facebook , General Electric , Marathon Petroleum , Mastercard , McDonald's , Microsoft , Norfolk Southern , Novartis , PayPal Holdings , and T. Rowe Price Group report quarterly results.
Goldman Sachs Group hosts its first-ever investor day, in New York. Senior management will detail the firm's strategy going forward.
Thursday 1/30
Altria Group , Amazon.com , Amgen , Biogen , Coca-Cola , Danaher, Electronic Arts , Eli Lilly , Northrop Grumman , Royal Dutch Shell , United Parcel Service , Verizon Communications , and Visa report earnings.
The Bank of England announces its monetary-policy decision. Futures markets predict a greater-than-50% chance that the central bank will cut its key short-term interest rate to 0.50% from 0.75%.
The Bureau of Economic Analysis releases its advanced estimate for gross-domestic-product growth in the fourth quarter of 2019. Economists forecast that the U.S. economy grew at an annual rate of 2.1%, matching third-quarter results.
Friday 1/31
Broadridge Financial Solutions , Caterpillar , Charter Communications , Chevron , Colgate-Palmolive , Exxon Mobil , Honeywell International , and Weyerhaeuser report quarterly results.
The BEA releases its Personal Income and Outlays report for December. Personal income and spending are both expected to rise 0.3%. This compares with a 0.5% jump in income and a 0.4% gain in spending in November. The Personal Consumption Expenditure index, the Federal Reserve's favored inflation gauge, is seen edging up 1.5% year over year, matching the November data.
ISM-Chicago releases its Chicago PMI for January. Consensus estimates are for a 49.5 reading, up from December's 48.9 figure.
Write to Evie Liu at evie.liu@barrons.com
(END) Dow Jones Newswires
January 24, 2020 21:32 ET (02:32 GMT)
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