Albertsons CEO Vivek Sankaran said Friday that he is satisfied with the company’s initial public offering, even when its shares fell short of expectations.
The grocery store operator began trading on the New York Stock Exchange on Friday with the slogan “ACI.” It debuted at a lower-than-expected price of $ 16 a share, below its target range of $ 18- $ 20.
In CNBC’s “Squawk Alley”, Sankaran said the drop in price reflects market volatility, not the company’s strength.
“It is already very difficult to predict what is happening in the market,” he said. “It is very different from the beginning of the week to the end of the week, but we are proud that in this extremely difficult environment, in the midst of a pandemic, we were able to IPO the company.”
Shares fell less than 1% in trading on Friday afternoon.
He said the IPO is “a great accomplishment” for Albertsons, and is focused on providing fresh food to customers in the long term, whether they choose to buy online or in stores.
Albertsons was founded in 1939 in Boise, Idaho. Since then, the grocery store operator has grown to nearly 2,250 stores in 34 states and Washington, DC with his own name and other banners, including Safeway, Vons, and Tom Thumb. All of its stores are in the US and its headquarters are still in Boise.
Sankaran became CEO of Albertsons last spring. He was previously the CEO of PepsiCo Foods North America.
In recent years, Albertsons has been trying to go public or expand. Private equity owner Cerberus Capital Management LP has pushed the company toward an initial public offering. Two years ago, Albertsons made plans to merge with Rite Aid Corporation, but abandoned the $ 24 billion deal after some investors opposed it.
The grocery store has recovered in recent months as Americans have stocked up on food and cooked more at home during the coronavirus pandemic. Its sales in March and most of April increased 34% over last year.
Sankaran said online grocery shopping is a major growth area, especially in recent months, but said many customers still prefer to shop in person.
“Stores still matter,” he said. “Many customers buy stores and use delivery and it is the combination that makes it really powerful and we are committed to that.”
Like other supermarkets, Albertsons has thin margins and has had to bear more costs to stock shelves, clean stores, and fulfill grocery orders online during the pandemic.
Sankaran said it focuses on increasing profits by gaining more market share. He added that the company is “very good” in mergers and acquisitions and that is how the company was built. It was one of the companies that explored a Whole Foods offer before Amazon bought the company.
“Right now, we are focused on creating more value through the assets we have and we have a large set of assets,” he said. “We have a lot of head room there. But we are always open to the eyes. When the right opportunities come, we will.”
.
