Albertsons Companies, a food- and drug retailer, has seen its shares rise in value since October 18th when it reported strong second quarter earnings. However, can this stock sustain its gains in an environment of high inflation? Let’s find out.Shares of leading food and drug retailer Albertsons Companies, Inc. (ACI) have advanced 7.2% in price since the company reported its second-quarter results on October 18. Its same-store sales in the quarter exceeded analysts’ expectations. The stock has gained 74.4% year-to-date and 51.4% over the past three months to close yesterday’s trading session at $30.65.

Boise company, Idaho, expects higher inflation over the next few months due to higher labor and supply costs in the food sector. However, it provides cheaper options to higher-priced goods.

ACI is enhancing its digital presence. To that end, it unveiled three innovations in August 2021—the launch of its free Deals & Delivery app; ‘Albertsons for U’ shopper loyalty program; and FreshPass. On November 12, the company raised its quarterly dividend 20% to $0.12 per shared. The company also updated its guidance for 2021, raising it by 20%. So, ACI’s near-term prospects look promising.

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