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SpartanNash Names New Leaders, Celebrates Healthy FY

SpartanNash has a new COO, a new chief of wholesale distribution, and pleasing financials for Q4 and the 2014 fiscal year.

The Grand Rapids, Mich.-based grocery operator has appointed Dave Staples as its chief operating officer, a promotion from his current post as EVP and CFO. The company also promoted Derek Jones from EVP of food distribution to president of wholesale and distribution operations.

As COO, Staples will oversee all three operating segments of the company: retail, wholesale and military distribution. The company has initiated recruiting efforts for a CFO; Staples will continue to serve as CFO until his replacement is hired.

"This appointment is part of our robust three year integration plan," said president/CEO Dennis Eidson. "The size and scope of SpartanNash today demands a dedicated chief operating officer. We are pleased to have had such an exceptional internal candidate."

As CFO, Staples helped guide the company from $1.98 billion in 2003 to $7.9 billion in 2014. "Dave's leadership was critical to our game-changing merger of Spartan Stores and The Nash Finch Company in November 2013," Eidson said. "He also has been an instrumental and respected member of our executive team, helping to define our strategic direction, drive our customer centric business model and cultivate strong customer relationships."

A CPA, Staples joined SpartanNash in January 2000, serving as the company's EVP and CFO since November 2000. In this capacity, Staples directed finance, real estate, the treasurer's department, internal audit, risk management and information technology. Prior to joining SpartanNash, Staples held positions with Kmart and Arthur Andersen.

Jones will report to Staples and oversee the entire supply chain, including military supply chain operations. "This streamlined approach," Eidson continued, "is critical to our mission to leverage our expertise in food distribution and retail to develop, activate and provide impactful solutions that exceed expectations for associates, customers and partners."

Jones cultivated and strengthened relationships with the company's independent customers operating 2100 locations, and has driven growth as a value-added distributor while directing the operations of SpartanNash's Wholesale and Supply Chain Operations, including warehousing, transportation, new business development, replenishment and customer service. 

Jones joined the company in 2006 from Unisource Worldwide Inc., where he served as VP of distribution for the company's eastern region. Jones has also held senior operations management positions with Office Depot, Walgreen's and Wal-Mart.

Sales and earnings rise as merger integration remains on track

Meanwhile, SpartanNash reported a boost in Q4 consolidated net sales of 73.9 percent to $1.96 billion, compared to $1.13 billion in the 11-week quarter last year. The increase was primarily due to $0.7 billion in higher sales generated as a result of the November 2013 merger with Nash Finch and the two extra weeks in this year’s Q4 compared to the prior year, partially offset by lost sales related to store closures. The 53rd week contributed $135.2 million of consolidated net sales.

Adjusted earnings increased 60.6 percent to $55.3 million, or 2.8 percent of net sales, when including the 53rd week, and increased 49.9 percent to $51.7 million, or 2.8 percent of net sales, excluding the 53rd week, compared to $34.5 million, or 3.1 percent of net sales last year. Reported operating earnings were $21 million compared to a loss of $13.1 million for the prior year quarter. The increase was primarily due to benefits from the merger, reduced merger and integration expenses, lower asset impairment and restructuring charges as well as the extra two weeks of operations, partially offset by higher pension settlement accounting charges and higher LIFO expense. Q4 earnings from continuing operations were $18.5 million, or 49 cents per diluted share on approximately 37.6 million shares outstanding, when including the 53rd week, and $16.5 million, or $0.44 per diluted share, when excluding the 53rd week, compared to $9.4 million, or $0.31 per diluted share on approximately 30.1 million shares outstanding last year. 

“We returned our Michigan supermarkets to positive comparable store sales growth, delivered better than expected adjusted earnings from operations and achieved key integration milestones," Eidson said. "Our strategic and competitive positioning continues to strengthen as we increase our operating efficiencies and begin to launch our programs, which is allowing us to develop impactful solutions and drive value for our existing customers and partners and build a strong sales pipeline of new business."

Q4 net sales for the food distribution segment increased 80 percent to $853.1 million from $473.9 million a year ago. Net sales for the retail segment in Q4 increased 34 percent to $544.1 million from $406 million a year ago, primarily due to $89.3 million in sales generated as a result of the merger, the two extra weeks of sales and a 0.4 percent increase in comparable store sales, excluding fuel. These gains were partially offset by $18 million in lower sales due to the closure of certain stores and lower retail fuel prices compared to the prior year. Comparable-store sales excluding the impact of the contributions from the merger would have increased approximately 0.8 percent. Total retail sales for the 53rd week were $41.8 million. During Q4, the company completed three major remodels and closed three stores. SpartanNash ended the quarter with 162 corporate owned stores and 29 fuel centers.

Net Q4 sales for the company's military segment were $565.4 million compared to $248.6 million in the prior year period, due to the inclusion of only six weeks of Nash Finch operations last year. The 53rd week contributed $36.9 million of net sales.

FY 2014 results

For the 53-week fiscal 2014 year, consolidated net sales increased 148.2 percent to $7.9 billion compared to $3.2 billion for the 51-week period ended Dec. 28, 2013. The 53rd week contributed $135.2 million in consolidated sales. Comparablestore sales, excluding fuel, increased 0.9 percent in fiscal 2014. Adjusted EBITDA was $234.4 million, or 3 percent of net sales, when including the 53rd week, and $230.8 million, or 3 percent of net sales, when excluding the 53rd week, compared to $126.9 million, or 4 percent of net sales last year. 

Adjusted earnings from continuing operations for fiscal 2014 were $69.9 million, or $1.85 per diluted share, including the 53rd week, and $67.9 million, or $1.80 per diluted share, excluding the benefit of the 53rd week. 

SpartanNash’s core businesses include distributing food to military commissaries and exchanges and independent and corporate-owned retail stores located in 44 states and the District of Columbia, Europe, Cuba, Puerto Rico, the Azores, Bahrain and Egypt. SpartanNash currently operates 162 supermarkets, primarily under the banners of Family Fare Supermarkets, D&W Fresh Markets, Family Fresh, No Frills, Bag 'n Save, Sun Mart and Econofoods.

 

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