11:02 AM EDT, 04/22/2024 (MT Newswires) -- Albertsons' ( ACI ) fiscal fourth-quarter earnings surpassed Wall Street's expectations while revenue fell short, as the company and Kroger ( KR ) increased the number of stores they plan to divest to ease regulatory over the merger deal between the supermarket chains.

Adjusted per-share income fell to $0.54 for the quarter ended Feb. 24 from $0.79 a year earlier, but exceeded the consensus on Capital IQ for $0.52. Sales and other revenue rose to $18.34 billion from $18.27 billion. The Street's view was for $18.48 billion.

"We delivered another solid quarter amidst a difficult industry backdrop," Albertsons ( ACI ) Chief Executive Vivek Sankaran said in a statement.

Identical store sales grew 1%, driven by pharmacy sales. Five analysts polled by Capital IQ were predicting a 1.2% gain. The digital business reported a 24% sales increase.

While the company plans more investments in digital and omnichannel operations, it expects headwinds from factors including worker wages and benefits, last year's food inflation and falling income related to COVID-19, Albertsons ( ACI ) said. Also the lower-margin pharmacy and digital businesses have seen an increasing mix, the grocer said.

"We expect these headwinds to be much stronger in the first half of fiscal 2024," Sankaran said. "These headwinds are expected, however, to be partially offset by ongoing productivity initiatives."

In 2022, Kroger ( KR ) agreed to acquire Albertsons ( ACI ) for $34.10 per share. The companies said Monday they will now sell 579 stores to C&S Wholesale Grocers following the closing of the deal, up from 413 previously planned. C&S will pay an all-cash consideration of about $2.9 billion, including customary adjustments, according to a joint statement.

In February, the Federal Trade Commission sued to block the planned merger, alleging it would eliminate competition, increase grocery prices, and harm "tens of thousands" of workers.

"The updated divestiture plan continues to ensure no stores will close as a result of the merger and that all frontline associates will remain employed, all existing collective bargaining agreements will continue, and associates will continue to receive industry-leading health care and pension benefits alongside bargained-for wages," Kroger ( KR ) CEO Rodney McMullen said. "Our proposed merger with Albertsons ( ACI ) will bring lower prices and more choices to more customers and secure the long-term future of unionized grocery jobs."

The expanded divestiture package ensures "these stores continue to successfully serve their communities for many generations to come," said C&S CEO Eric Winn.