SpartanNash Achieves Higher Earnings in Fiscal 2023
SpartanNash is out with its financial results for the fourth quarter and full fiscal year, which underscore the overall up-and-down nature of the operating period. Factors like ongoing inflation, changes in fuel sales and reduced food program assistance affected sales, while the markers of the company’s financial health reflect its focus on growth and transformation.
During the fourth quarter ending Dec. 30, 2023, net sales dipped 2.8% to $2.25 billion. Lower volumes in SpartanNash’s wholesale and retail segments led the decline, attributed in part to a price-based downturn in fuel sales and year-over-year differences in emergency food benefits from the government. Net sales were up for the year, however, rising 0.9% to $9.73 billion, with sales edging higher in both the wholesale and retail businesses. Sales comps dipped 2.8% for the quarter but were up 2% for the full FY2023.
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The earnings picture looked good for SpartanNash for both the quarter and the year. Net earnings rose from nearly $0.7 million in December 2022 to $10.3 million in December 2023 and on a yearly basis, went from $34.5 million to $52.2 million. Net earnings per share also rose, from $0.2 per diluted share to $0.3 per diluted share in the quarter and from $0.98 to $1.52 in the 12-month time frame. Adjusted EBITDA went up from $47.2 million to $53.6 million in the fourth quarter and from $242.9 million to $257.4 million on a yearly basis.
"Our team is proud of another strong year in which we have demonstrated year-over-year growth, delivered record profitability, and performed in line with our expectations, all in spite of a challenging macroeconomic environment," summed up SpartanNash President and CEO Tony Sarsam. "We are on track to achieve the objectives in our long-term strategic plan as we focus on creating enhanced customer value and capturing additional cost savings from our transformational initiatives.”
In an earnings call on Feb. 15, Sarsam shared other highlights of the reporting period. For example, the company improved its turnover rate by 9% in 2023 and boosted its employer rating on the Glassdoor site to put it at the top of its retail peer group. SpartanNash also continued to renovate, re-banner and refresh the stores its operates and boosted its store brand retail penetration by 30 basis points.
Results from the company’s ongoing supply chain and merchandising transformations are also being felt. “We realized $26 million in cost savings from our supply chain transformation and are also really proud of our merchandising transformation, through which we captured $29 million benefits, in line with the range we previously shared,” remarked Jason Monaco, EVP and CFO at SpartanNash, during the earnings call.
Looking ahead, Sarsam said that he expects 2024 to be another “pivotal” year of market share growth in wholesale and retail. SpartanNash projects yearly net sales to land between $9.8 billion and $9.9 billion and anticipates EBITDA to come in between $255 million and $270 million.
“While we have been building our capabilities and optimizing businesses, the macro environment has continued to change,” Sarsam said, adding that the company expects consumers to return to normal behaviors as inflation comes back down but it might take longer than originally thought. “We have a strong foundation to flexibly pivot with the changes.”
Grand Rapids, Mich.-based SpartanNash operates two complementary business segments – food wholesale and grocery retail. 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.
