Smart & Final Reports Strong Q4/FY17, Ecommerce Expansion
Smart & Final Stores Inc. closed out its fourth quarter and fiscal 2017 with sales growth over the same periods a year prior, also reporting significant expansion of its ecommerce program across its operations.
During Q4, which ended Dec. 31, 2017, net sales grew 6.7 percent compared with the prior-year period, reaching $1.07 billion. These were led by 3.2 percent comparable-store sales growth, representing the company’s third consecutive quarterly increase.
Looking specifically at banners, net sales for Smart & Final stores were $841.4 million, a 5.7 percent increase over the same period in 2016, with comps rising 2.5 percent. Net sales for Cash & Carry Smart Foodservice, meanwhile, grew 10.8 percent to $226.6 million, with comps rising 6.2 percent
“We're pleased with the strong sequential agreement in our comparable-store sales metric and a solid positive contribution from both the Smart & Final and the Cash & Carry banners,” said David Hirz, Smart & Final president and CEO, on a call discussing the results. “Sales growth was well in excess of the underlying inflation rate, and we had an average ticket growth in both store banners.”
For the full fiscal year, net sales were $4,570.6 million, a 5.3 percent rise over fiscal 2016. Driving growth were the net sales contribution of new stores and a 1 percent increase in comps, the latter made up of a 0.3 percent increase in comparable transaction count and a 0.8 percent increase in comparable average transaction size.
Broken down by banner, net sales for Smart & Final stores for the year were $3,557.7 million, up 4.6 percent from fiscal 2016, with comps rising 0.7 percent. Net sales for Cash & Carry stores were $1,012.9 million, 7.6 percent higher than fiscal 2016, with comps up 2.4 percent.
Looking at FY 2018, which will end Dec. 30, the company is anticipating net sales growth of 4 percent to 5 percent, with comps rising 1 percent to 2 percent. It expects to open three to five new Extra stores and the same range of Cash & Carry locations. Relocations will include two or three legacy stores, while expansions or conversions of legacy stores to the Extra format will involve one or two stores.
Other Noteworthy Achievements
Along with its fiscal performance, Smart & Final reported several significant accomplishments during Q4 and 2017, noting that:
On the ecommerce side, the end of Q4 saw more than 85 percent of Smart & Final banner stores offering a delivery or click-and-collect option. Sales through these channels collectively represents a small piece of total sales, but continue to grow steadily. “While our research has shown that historically, a large percentage of our online sales are from incremental customers, we expect that this will shift over time to include more existing customers,” Hirz noted.
- In its private label program, the company added 100-plus SKUs in 2017, with a strong focus on its natural and organic brand Sun Harvest, which grew sales by almost 30 percent. It also launched a redesign of its flagship First Street brand, with new packaging and signage to emphasize quality and value. As part of the project, the retailer is consolidating some of its ancillary labels under the First Street brand.
- With its business customers, Q4 sales were strong, up 6.5 percent year-over-year with an average ticket approximately twice that of a typical household customer.
- For new stores and remodels, Smart & Final opened seven new Smart & Final Extra stores and completed three expansions of its legacy stores to the Extra format in Q4, as well as relocating one store. As of Dec. 31, the Commerce, Calif.-based retailer operates 323 stores: 194 Extra stores, 66 legacy stores and 63 Cash & Carry stores.