Q3 Sales Down 2.6% at Nash Finch
Minneapolis-based food distributor Nash Finch Co. has reported total company sales of $1.47 billion for its third quarter ending Oct. 8, compared to $1.51 billion for the year-ago period, a decrease of 2.6 percent.
Excluding the impact of selling or closing eight retail stores, total Q3 comparable sales decreased 1.6 percent relative to last year. Sales for the first 40 weeks of 2011 were $3.67 billion compared to $3.85 billion in the prior year period, a decrease of 4.5 percent. Excluding sales decrease due to the divestiture and partial transition of a distribution buying group to another supplier during 2010, total year-to-date comparable sales decreased 2.5 percent relative to last year.
Consolidated EBITDA increased 1.4 percent to $45.9 million, or 3.1 percent of sales in 2011 as compared to $45.3 million, or 3 percent of sales in 2010. “The year-over-year increases in consolidated EBITDA results and net earnings, adjusted to exclude significant items, for the third quarter and year-to-date periods were consistent with our expectations,” said Alec Covington, Nash Finch president and CEO. “We continue to focus on operational improvements and initiatives aimed at growing sales as we and our customers weather this prolonged economic recovery. Despite the challenging times, we have maintained our solid balance sheet and continue to look for growth opportunities.”
Net Q3 adjusted earnings increased 15 percent to $16.4 million, or $1.25 per diluted share, in 2011, compared to $14.3 million or $1.09 per diluted share in 2010. Year to date, adjusted net earnings increased 12.5 percent to $38.1 million or $2.92 per diluted share in 2011, compared to $33.8 million or $2.56 per diluted share in 2010.
Q3 military segment net sales increased 1.4 percent and 1.2 percent YTD, though a larger portion of military sales during the current year have been on a consignment basis, which are not included in reported net sales. Military segment EBITDA increased by $3.9 million or 22.6 percent, primarily due to cost savings achieved from opening distribution centers in Columbus, Ga., and Bloomington, Ind.
“Our Bloomington, Indiana, military distribution center has exceeded expectations in the third quarter due to our ability to attract new business and our associates’ focus on operational execution,” Covington said. “The expansion of our military footprint is helping us achieve cost savings and improved productivity. We look forward to bringing our Oklahoma City facility on line, which will further improve the efficiency of our military network. The Oklahoma City facility is scheduled to open in the first quarter of 2012.”
Q3 and YTD combined food distribution and retail segment sales decrease compared to the 2010 periods were 6.1 percent and 9.4 percent, respectively. Retail same-store sales declined 0.5 percent as compared to the prior year quarter and 2.2 percent YTD.
“We were pleased to see the improvement in comparable sales for food distribution and retail in the third quarter and we expect comparable sales to continue to improve over the near term,” Covington said. “We continue to partner with our customers on ways to improve their competitive position and to drive sales as we maintain our focus on improving productivity.”
Nash Finch Co.’s core food distribution business serves independent retailers and military commissaries in 36 states, the District of Columbia, Europe, Cuba, Puerto Rico, the Azores and Egypt. The company also owns and operates a base of retail stores, primarily supermarkets under the Econofoods, Family Thrift Center, Avanza, Family Fresh Markets, Savers Choice and Sun Mart banners.