Sales Down at SpartanNash
Food solutions company SpartanNash's first-quarter financial results showed a decline in revenue from the same quarter last year. Net sales decreased 3.5% to $2.81 billion. This decrease in sales was attributed to lower volumes in both the wholesale and retail segments. Wholesale segment net sales were down 3.4% due to reduced revenue in the national accounts customer channel. Over in the retail segment, net sales fell 3.6%. This net sales decrease included a reduction in food assistance program benefits and lower fuel sales.
For Q1 ended April 20, the company’s net earnings were 37 cents per diluted share, compared with last year’s 32 cents per diluted share. This increase was due to a higher gross profit rate, which included lower LIFO expense of $9.2 million and benefits from its merchandising transformation, as well as decreased incentive compensation. This was partly offset by lower unit volumes, and changes in customer mix within the wholesale segment, as well as higher interest, tax and asset impairment expenses.
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Adjusted EPS was 53 cents, compared with 64 cents in the year-ago period, while adjusted EBITDA was $74.9 million, compared with $76.8 million last year. These measures exclude, among other items, restructuring and asset impairment charges and the impact of the LIFO provision.
"SpartanNash continues to prove that we can deliver despite the challenging market dynamics, and we remain on target to reach the $125 million to $150 million of gross benefits set out in our strategic plan by the end of 2024 – a year earlier than initially communicated. Thanks to the operational excellence and dedication of our associates, along with our investments in supply chain and merchandising transformations, we continued to expand our adjusted EBITDA margin in the first quarter," said SpartanNash CEO Tony Sarsam.
Also in Q1, the company increased its cash generated from operating activities to $36.5 million, compared with the cash flows used in last year's operations that totaled $2.7 million. Capital expenditures and IT capital were $44.1 million, an uptick from last year's $39.8 million.
Seeking to improve operational efficiency and profits, SpartanNash recently performed a holistic review of its end-to-end supply chain network with existing partner CHEP, a provider of circular end-to-end pallet and storage solutions. According to Progressive Grocer sister publication Chain Store Age, Atlanta-based CHEP provided such recommendations as strategic shifts in pallet flows designed to solve network gaps, reducing days holding inventory and minimizing costs, as well as enhanced reporting to minimize inefficiencies.
Looking ahead, SpartanNash is reaffirming its previous profitability guidance for fiscal 2024, with adjusted EBITDA and adjusted EPS expected to be within the ranges of $255 million to $270 million and $1.85 to $2.10, respectively.
With its 17,000 associates, 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 147 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 food solutions company is No. 45 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America. SpartanNash is also among PG’s 2024 10 Most Sustainable Grocers.
