Nash Finch Co. reported sales of $1.06 billion for the first quarter ending March 24, a decrease of 3.7 percent from the year-ago period.
Excluding the impact of selling or closing six retail stores, total company first quarter comparable sales decreased 3.1 percent relative to last year, the company reported. Adjusted net Q1 earnings were $6.2 million, or 47 cents per diluted share, compared to $9.3 million or 71 cents per diluted share in the first quarter of 2011.
“As anticipated, we, along with the industry in general, experienced lower price inflation trends during the first quarter, which played a part in the decline in EBITDA during the first quarter of 2012,” said Alec Covington, Nash Finch president and CEO. “In addition, investments we made in key marketing programs also impacted our EBITDA results, but those programs will better position our food distribution and retail segments for improved revenue growth in the future.”
Covington continued: “We recently completed the acquisition of 12 Bag ‘N Save stores in the Omaha area and welcome these associates and customers to the Nash Finch family. We expect this acquisition to be accretive to shareholders in 2012 and we are moving swiftly to integrate these new stores into our Nash Finch corporate retail group.”
Military segment net sales decreased 1.1 percent for Q1 versus last year, primarily due to decreased sales to overseas commissaries. “We continue to be under pressure in this segment due to increased competition, but are resolute in our plan to deliver the first military distribution worldwide platform jointly with our West Coast strategic partners, Coastal Pacific Food Distributors,” Covington said. “During the first quarter, our newest distribution center in Oklahoma City came online and I am pleased to report the operation is running smoothly. I congratulate all of the associates involved in this achievement.”
Q1 sales for the combined food distribution and retail segment decreased 6.2 percent versus the year-ago period, due to the sale or closing of six retail stores since the end of Q4 2010. Adjusted for this impact, comparable sales declined 4.4 percent in Q1, blamed on a reduction in sales to existing wholesale customers and a 1.4 percent dip in same-store retail sales.
“We are pleased with the improving trends in same-store sales achieved by both our food distribution and retail segments in spite of an unusually mild winter, however, we are disappointed with the EBITDA results achieved by those segments,” Covington said. “We have already seen increased product movement in produce and private label, two of the major initiatives being launched this year to help fuel future growth in both our food distribution and retail segments.”
Minneapolis-based Nash Finch’s core food distribution business serves independent retailers and military commissaries in 36 states, the District of Columbia, Europe, Cuba, Puerto Rico, the Azores, Bahrain and Egypt. The company also owns and operates a base of retail stores, primarily supermarkets under the Econofoods, Family Thrift Center, Avanza, Family Fresh Market, Savers Choice, Bag ‘N Save and Sun Mart banners.