SpartanNash had a solid Q2 with increased earnings in both its wholesale and retail businesses.
Food solutions company SpartanNash had a fruitful second quarter, punctuated by net sales of $2.31 billion, a year-over-year increase of 1.7% that reflects growth in both the wholesale and retail segments, which were favorably impacted by inflation. The reporting period, which ended July 15, also brought a 3.9% increase in retail comparable sales, as well as net earnings of $19.5 million, compared to $5.1 million in the prior year quarter.
The company had an adjusted EBITDA of $66.1 million, compared to $61.8 million year over year, and cash generated from operating activities was $49.7 million during the first half of fiscal 2023 compared to $28.5 million in the first half of fiscal 2022.
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"Our team delivered solid results in the first half of 2023, leveraging transformational initiatives for growth and value,” said SpartanNash President and CEO Tony Sarsam. “We are encouraged by the success to date, but also believe there is a long runway of benefits that will help us achieve our long-term strategic plan.”
Continued Sarsam: "We are now entering the next phase of our transformation, bolstering our go-to-market strategy and building on our Signature Strength of being the most customer-focused, innovative food solutions company. All of the elements of our long-term strategic plan differentiate SpartanNash as a growth-oriented organization, which further positions us to drive profitability and increase shareholder value."
The company’s Q2 operating earnings for wholesale were $21.5 million, compared to $12.7 million in the prior year quarter, which it attributes to improved leverage of operating expenses, including lower incentive compensation. Retail operating earnings increased $6.6 million, or 1%, to $679 million from $672.4 million in the prior year quarter.
SpartanNash is currently undertaking supply chain, merchandising and marketing transformation initiatives, as well as repositioning its go-to-market strategy to enhance customer centricity. Its refreshed go-to-market plan is being implemented in the third quarter and is expected to offer run-rate cost savings of approximately $20 million by year-end.
Meanwhile, SpartanNash is expected to launch its new premium private label line dubbed Finest Reserve by Our Family in October. It will be the company’s first foray into premium own-branded products.
Grand Rapids, Mich.-based SpartanNash operates two complementary business segments – food wholesale and grocery retail. Its global supply chain network serves wholesale customers that include independent and chain grocers, national retail brands, e-commerce platforms, and U.S. military commissaries and exchanges. On the retail side, SpartanNash operates 144 brick-and-mortar grocery stores, primarily under the banners of Family Fare, Martin's Super Markets and D&W Fresh Market, in addition to dozens of pharmacies and fuel centers. The company is No. 41 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America.