SpartanNash Posts ‘Improved’ Q3
SpartanNash Co. reported net sales of $1.78 billion for the 12-week third quarter ended Oct. 10, a 1.9 percent decline from the $1.81 billion posted in the year-ago period, which the Grand Rapids, Mich.-based company attributed mainly to lower sales in its military and retail segments. Adjusted EBITDA was $55.2 million, versus $55.9 million for the prior year, representing 3.1 percent of net sales in each year.
Reported operating earnings came to $29.2 million, compared with $33.6 million for the prior-year quarter. According to SpartanNash, the decrease was primarily because of higher restructuring and asset impairment charges, as well as higher merger integration and acquisition expenses. Meanwhile, adjusted earnings from continuing operations for Q3 rose to $18.6 million, or 49 cents per diluted share, from $17.2 million, or 46 cents per diluted share, in Q3 last year.
"We are pleased with our ability to generate improved third-quarter adjusted earnings," said SpartanNash President and CEO Dennis Eidson. "While the sales environment remains more challenging than anticipated, our team continues to strengthen SpartanNash's value proposition as well as the quality and service that we offer customers across our retail, food distribution and military segments.
"During the quarter, we continued to invest in our Western store base, with the completion of six store remodels and grand reopenings in Omaha and through the initial rollout of our yes Rewards loyalty program into these remodeled stores. We are encouraged by the initial results at these six stores. In addition, we anticipate further benefits from merger integration and improved operational efficiencies through the optimization of our supply chain," Eidson added."
Net sales for SpartanNash's food distribution segment was $762.3 million in Q3, compared to $764.3 million in the year-ago period. Third-quarter adjusted operating earnings for the segment grew to $17 million, from $15.2 million in the same period last year. Reported operating earnings for Q3 was $16.5 million, up from $13.8 million in the year-ago period.
Q3 net sales for the retail segment was $507.2 million, versus $521.7 million last year. SpartanNash said that the decrease was mainly because of a 3 percent decline in comparable-store sales, excluding fuel, lower sales resulting from the closure of retail stores and fuel centers, and considerably lower retail fuel prices compared with the prior year, partly offset by sales from recently acquired stores.
Comps reflected the low inflationary environment and more competition in the company’s Western markets. Q3 adjusted operating earnings for the segment increased to $13.2 million from $12.9 million in year-ago period.
Net sales for the military segment was $506 million, compared with $523.6 million in the prior-year quarter, mainly on account of lower sales at the DeCA-operated commissaries. Third-quarter adjusted operating earnings for the segment hit $4.5 million, versus $5.7 million last year, which the company said was because of lower sales volume and lower inflation-related gains, partly offset by reduced health care costs. Reported operating earnings for the segment was $3.4 million compared to $5.7 million in the prior year quarter.
SpartanNash's core businesses encompass distributing grocery products to military commissaries and exchanges and independent and corporate-owned retail stores in 46 states and the District of Columbia, Europe, Cuba, Puerto Rico, Bahrain and Egypt. The company operates 164 supermarkets under the banners Family Fare Supermarkets, Family Fresh Markets, D&W Fresh Markets, and SunMart.