MINNEAPOLIS -- Nash Finch here said it lost only one customer in the wake of its acquisition earlier this year of two warehouses from Roundy's Supermarkets, Milwaukee.
"The moment that we announced the acquisition, every wholesaler in the Midwest began to call on these customers," said Ron Marshall, president and chief executive officer, in a conference call discussing the company's second-quarter results. "The result of all that activity was that we lost one $15,000-a-week retailer."
Nash Finch's 84-unit retail business, however, continued to struggle in terms of sales growth, with same-store sales declining 7.4% and 4.2% in the second-quarter and year-to-date periods, respectively. Despite the sales decline, profits in the division were up 62%, to $6 million, or 3.5% of sales, vs. 1.8% of sales a year ago.
The addition of the two new distribution centers, in Westville, Ind., and Lima, Ohio, helped drive a 44.2% increase in distribution sales for the quarter, to $647.7 million. Excluding the acquisition, distribution sales rose 3% in the period. Profits in the distribution business were up 20.3%, to $21.3 million, but they declined as a percent of sales to 3.3% from 3.9% in the year-ago period. The company attributed the decline to marketing issues related to the integration of the new warehouses.
Overall, Nash Finch posted net income of $9.7 million for the second quarter, compared with a loss of $15.6 million in the year-ago period. Sales were up 19.7%, to $1.09 billion. Through the first half, net income was $16.7 million, vs. a loss of $10.9 million a year ago. Year-to-date sales were up about 10%, to $1.97 billion.