...Over the next year, we expect ACI to continue focusing on de-leveraging after making good progress on debt reduction in the past 12 months. In our view, ACI's significant debt burden relative to peers has limited its financial and operational flexibility, but its financial policy has shifted since the terminated Rite Aid (RAD) deal last year. We expect free operating cash flow generation of $500 million-$600 million in 2019 from positive comparable sales, Safeway synergies ahead of our expectations, and lower capital spending. The company has lowered leverage to 6x from 7x a year ago, but we expect only modest deleveraging in the coming year, barring further private equity sponsor recapitalization, financing, or mergers and acquisition (M&A) efforts. New strategies taking aim at discounters, supercenters, and online grocers should alleviate some margin pressure.We project that ACI will generate positive comparable (ID) store sales this year as it laps past missteps around pricing, promotions,...
