Based on the expected strength of its preliminary Q1 results, SpartanNash has raised its guidance for the fiscal year ending Dec. 31.
For its 16-week first quarter ended April 23, food solutions company SpartanNash has provided preliminary net sales and earnings results, noting that it expects to achieve strong results, which it achieved despite a period of ongoing supply chain disruption and limited labor availability. These preliminary results include net sales of between $2.74 billion and $2.77 billion, compared with $2.66 billion in the year-ago quarter; net earnings of between $18.7 million and $19.7 million, compared with $19.5 million last year; and adjusted EBITDA between of $75.6 million and $77.6 million, compared with $64.8 million in the prior year.
“We kicked off 2022 with significant momentum, achieving solid preliminary results in the first quarter and surpassing our internal expectations,” said SpartanNash President and CEO Tony Sarsam.
According to the company, its preliminary Q1 results were driven by such factors as the further transformation of the SpartanNash supply chain, securing more than $15 million in run-rate cost savings and meeting its initial full-year commitment of $15 million to $30 million of annualized savings during the first quarter, while delivering an approximate 7% improvement in throughput rate year-over-year; building on its solid momentum in retail, with preliminary comps increasing to 7.2%; and achieving preliminary military operating margin between of 0.21% and 0.25% and preliminary military adjusted EBITDA margin of between 1.5% and 1.6%, in excess of its turnaround target of 1%, as the operational and supply chain improvements take hold.
SpartanNash additionally updated its outlook for the fiscal year ending Dec. 31, and provided long-term financial targets supported by its strategy, noting that it expects to realize a substantial benefit from the inflationary product cost environment.
Based on the expected strength of its preliminary Q1 results, the company has raised its guidance for the fiscal year ending Dec. 31, including net sales of $9.0 billion to $9.3 billion, compared with the prior guidance of $8.9 billion to $9.1 billion, and adjusted EBITDA guidance of $224 million to $239 million, compared with the prior guidance of $214 million to $229 million.
SpartanNash also anticipates a steady earnings pace across the remaining three quarters of fiscal 2022, and regarding the long-term financial targets it expects to achieve by fiscal 2025, it aims to grow net sales to more than $10 billion, an increase of at least 12% from net sales in fiscal 2021; adjusted EBITDA to more than $300 million, an increase of at least 40% from adjusted EBITDA in fiscal 2021; and adjusted EBITDA margin to 3% of net sales, an increase of 20% from adjusted EBITDA margin in fiscal 2021.
“During the past year, with our refreshed executive leadership team at the helm, we have driven change through our strategy, operating model and People First culture to enhance profitable growth and shareholder returns,” added Sarsam. “Building on our core capabilities – People, Operational Excellence and Insights that Drive Solutions – we introduced ‘Our Winning Recipe’ to set the strategic direction and launch a new period of growth for SpartanNash. We are pleased to provide our long-term financial targets fueled by the progress we have already made toward our transformation, propelled by our dedicated associates and supported by ongoing execution of our strategy.”
The company will discuss its full first-quarter results in a call before the stock market opens on Thursday, June 2.
SpartanNash’s core businesses include distributing grocery products to independent and chain retailers, its corporate-owned retail stores, and U.S. military commissaries and exchanges, as well as fresh produce distribution and fresh food processing. No. 39 on The PG 100,Progressive Grocer’s 2021 list of the top food and consumables retailers in North America, the Grand Rapids, Mich.-based company serves customer locations in all 50 states and the District of Columbia, Europe, Cuba, Puerto Rico, Honduras, Iraq, Kuwait, Bahrain, Qatar and Djibouti. SpartanNash also operates 145 supermarkets and employs 17,500 associates.