Lower Volumes, Cautious Consumers Affected SpartanNash in Q3
As SpartanNash continues its transformation, through businesses processes, acquisitions and other initiatives, the organization continues to steer its business through choppy waters. The food solutions company reported third-quarter earnings that came in slightly below analysts’ expectations.
For the three-month period ending Oct. 5, net sales dipped 0.6% to $2.25 billion, a decline attributed to lower volume in the company’s wholesale business. Net sales in that segment decreased 1.6% during Q3.
At the same time, higher volume in the retail segment offset potentially greater sales declines; retail sales were likewise in positive territory, with a 1.9% lift during Q3. Comps were down a bit, sliding 0.7%.
Profits, meanwhile, reflected the challenging operating environment. Net earnings came in at $0.32 per diluted share, the same as Q3 in 2023. Adjusted EPS fell from $0.54 to $0.48, while adjusted EBITDA hit $60.5 million versus the previous $60.9 million.
The acquistion of Metcalfe's Market earlier this year impacted some of the financial data. Incremental sales from that acquisition helped offset lower consumer demand trends, SpartanNash affirmed. Other recent M&A activity, including the purchase of Fresh Encounter, Inc. and Markham Enterprises, will come into play during the fourth quarter.
Summing up the quarterly performance, President and CEO Tony Sarsam said the team made progress on its strategic plans while sustaining profitability in a complex environment. "We continue to invest in our business to expand margin, capture additional cost savings, collaborate with our suppliers, and deliver value-add products and outstanding service to our Wholesale customers and Retail shoppers. All of these elements have established a solid foundation to drive organic and inorganic growth, including the upcoming acquisitions of Fresh Encounter and Markham,” he remarked.
With 17,500 associates, SpartanNash operates two complementary business segments: food wholesale and grocery retail. Its global supply chain network serves wholesale customers that include independent and chain grocers, national retail brands, e-commerce platforms, and U.S. military commissaries and exchanges. On the retail side, SpartanNash operates 147 brick-and-mortar grocery stores, primarily under the banners of Family Fare, Martin's Super Markets, and D&W Fresh Market, in addition to dozens of pharmacies and fuel centers. The company is No. 45 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America. SpartanNash is also among PG’s 2024 10 Most Sustainable Grocers.
