Nash Finch Q2 Total Sales Dip
Minneapolis-based Nash Finch Co. reported total company sales of $1.09 billion for its second quarter ending June 16, a decrease of 0.6 percent versus the year-ago period.
The acquisition of 12 Bag ’N Save stores during Q2 of 2012 contributed to a net increase in total company sales of $13 million – a $29.1 million increase in retail segment sales partially offset by a $16.1 million drop in distribution sales that are now reported in the retail segment.
Retail sales were negatively impacted by the sale and closing of retail stores since the first quarter of 2011, which resulted in a reduction in sales of $5.8 million.
“The investments we made in our food distribution marketing programs, which were designed to help drive sales, appear to be taking hold as is evidenced by the sequential improvement in comparable sales,” said Alec Covington, Nash Finch president and CEO. “But as we expected, lower food price inflation trends continued to negatively impact our EBITDA results in the second quarter compared to last year,”
Net Q2 earnings – adjusted to exclude the impact of significant items totaling $94 million or $7.24 per diluted share in 2012 and $2 million or 15 cents per diluted share in the 2011 quarter – were $9 million or 69 cents per diluted share, compared to $12.1 million or 92 cents per diluted in the year-ago period. Including the impact of significant items, net loss was $85 million or $6.55 per diluted share.
Military segment net sales decreased 1.1 percent in both Q2 and year-to-date 2012 compared to the prior year. But a larger portion of military sales during the current year have been on a consignment basis, which are included on a net basis. Including the impact of consignment sales, comparable military sales decreased 0.5 percent in Q2 and 0.8 percent YTD compared to the prior year.
“We continue to be under pressure in this segment due to increased competition and the low rate of product inflation compared to the prior year,” Covington said, noting the company has leased a 367,000-square-foot distribution center in Landover, Md., to replace a smaller facility on which the lease was expiring. “This new facility will be much more efficient, will complete our worldwide network and gives us the ability to deliver products to commissaries that we don't currently serve in the Northeast.”
Nash Finch’s core business, food distribution, 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 retail stores under the Econofoods, Family Thrift Center, Avanza, Family Fresh Market, No Frills, Bag ’N Save and Sun Mart trade names.