SpartanNash is providing an update on the company’s long-term strategy and its fiscal 2025 financial targets.
Food solutions company SpartanNash has provided positive preliminary results for the 12-week third quarter ended Oct. 8 and increased its fiscal 2022 guidance. Some projections include:
Net sales of $2.28 to $2.31 billion, compared to $2.07 billion in the prior year quarter.
Net earnings of $8.9 to $9.9 million, compared to last year's $15.2 million.
Adjusted EBITDAof $56.3 to $58.3 million, compared to the prior year quarter totaling $51.5 million.
These preliminary results were driven by several factors. For example, retail comparable store sales are expected to be up approximately 8% for the quarter. Improvements have also been made in supply chain expense rates resulting from efficiencies for the company’s supply chain transformation initiative. Plus, net sales were favorably impacted by inflation across all of the company’s lines of business.
As a result of these expectations, SpartanNash has updated certain elements of its fiscal 2022 guidance. It now expects net sales to range from $9.5 to $9.7 billion (previously $9.3 to $9.6 billion) and adjusted EBITDA to range from $237 to $242 million (previously $227 to $240 million).
At the beginning of the third quarter, SpartanNash improved its operations by combining food distribution and military operating segments. Creating the one operating segment, now called Wholesale, was driven by both a change in the company’s organizational structure and in the reporting utilized by the chief operating decision maker to allocate the company’s resources and assess operating performance. As a result, the company now operates two reportable segments: Wholesale and Retail.
Through the third quarter, SpartanNash paid $22.5 million in cash dividends, equal to $0.63 per common share. The company also repurchased 757,928 shares during year-to-date period for a total of $23.3 million, with an average price of $30.73 per share. In total, the company returned $45.7 million to shareholders through the third quarter.
“SpartanNash has reached an inflection point, and now we are accelerating our transformational initiatives and strategic plans, which continue to increase topline sales, decrease costs, grow share, drive results and return value to our shareholders," said SpartanNash President and CEO Tony Sarsam. “Achieving our 2025 targets will translate to an increased adjusted EBITDA of nearly 70% since 2019 and 40% since 2021.”
The company’s fiscal 2025 long-term financial targets include growing:
Net sales to more than $10 billion, an increase of 12% from fiscal 2021.
Adjusted EBITDA to more than $300 million, an increase of 40% from fiscal 2021.
These targets are expected to be achieved through several initiatives, including:
Increasing net sales by more than $1 billion through customer acquisition and continued expansion into value-add offerings;
Realizing benefits of $125 to $150 million during fiscal 2021 through 2025 with supply chain and merchandising transformation initiatives, as well as ongoing marketing innovation; and
Driving shareholder value through continued focus on return on capital.
The company will announce its full third quarter results before the stock market opens on Wednesday, Nov. 9.
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. 41 on The PG 100, Progressive Grocer’s 2022 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.