Spartan Stores Sales Up 4% For the Year
Spartan Stores Inc. reported consolidated net sales of $2.6 billion for the fiscal year ending March 31 – a 4 percent increase over last year.
The Michigan-based retailer and distributor also ended its fourth quarter on a high note, up 7.6 percent over the year-ago period to $614.8 million.
“We are pleased with our ability to generate financial results ahead of our expectations for the fourth quarter through disciplined management of expenses and working capital. These results enabled us to return capital to shareholders through our quarterly dividend and share repurchases, while also repaying the $45 million balance on our revolving credit facility,” said Dennis Eidson, Spartan’s president and CEO. “We continued to execute on our strategic initiatives during the year as we successfully completed the rollout of our loyalty program to all traditional supermarket banners, increased our private brand development, enhanced our focus on fresh excellence and converted one of our existing Glen’s locations to a Valu Land, our new value-focused store format, which is currently under development.”
Adjusted earnings for the year increased 5.2 percent to $109.7 million, or 4.2 percent of net sales, compared to $104.3 million, or 4.1 percent of net sales last year. Q4 earnings increased 9.6 percent to $28 million, or 4.6 percent of net sales, compared to $25.5 million, or 4.5 percent of net sales, versus the year-ago period.
Q4 net sales for Spartan’s distribution segment increased 9.1 percent to $271.6 million from $248.9 million in the year-ago period, due principally to an extra week of sales. Q4 net sales for the retail segment increased 6.4 percent to $343.1 million compared to $322.6 million in the same period last year, also credited to an extra week of sales, plus increased fuel retail selling prices and increased fuel volume; this was partially offset by a decline in comparable store sales, excluding fuel, of 3 percent. Retail segment operating earnings for the quarter increased 8.6 percent to $2.3 million compared to $2.1 million in the fourth quarter of fiscal 2011.
“While the economic climate is still challenging, especially in many Northern Michigan and Southeastern Michigan markets, we anticipate improvement during fiscal 2013,” Eidson said. The Michigan economic indices continue to show progress and we are hopeful that employment growth, a key driver of our business, will follow.”
Eidson said he expects a new sales and marketing campaign built around Spartan’s Yes loyalty program to help boost sales in the new fiscal year. “Additionally, over the past year we have been experimenting with a value store format, under the banner Valu Land, and previously converted two small store locations to this format,” he said. “While we are still very early in the development and testing of this store format, we are excited about the potential organic growth opportunity it could provide in certain existing markets and locations outside the state of Michigan.”
Grand Rapids, Mich.-based Spartan Stores Inc. distributes more than 40,000 private and national brand products to 375 independent grocery locations in Michigan, Indiana and Ohio, and to 97 corporate owned stores located in Michigan, including Family Fare Supermarkets, Glen’s Markets, D&W Fresh Markets, VG’s Food and Pharmacy, and Valu Land.