GRAND RAPIDS, Mich. — Spartan Stores here on Wednesday said sales were up in both its retail and distribution divisions in the second quarter, although net income was down overall.
Consolidated net sales for the 12-week second quarter, which ended Sept. 10, rose 2.9%, to $619.6 million, compared with the year-ago period. Adjusted EBITDA for the quarter also improved, by 3.8%, to $31.1 million, although net income was down about 8.8%, to $10.3 million.
The company said its gross profit margin decreased 110 basis points to 21.4%, from 22.5% in the same period last year, which it attributed to a higher mix of distribution and fuel sales, a lower fuel gross margin rate and an increased inventory-related expense of approximately $2.3 million this year versus last year.
Second quarter net sales for the retail segment increased 2.8% to $363.4 million, due to increased fuel retail selling prices and increased fuel volume, partially offset by a decline in comparable-store sales, excluding fuel, of 1.3%.
Spartan attributed the decrease in comps to a shift in the timing of food stamp distributions in Michigan to the third quarter from the second quarter of fiscal 2012, and weaker comparable-store sales over the Labor Day holiday selling period due to unfavorable weather conditions and a more cautious consumer. The company said it is "cautiously optimistic.²"
"We remain confident that as the economy improves Spartan Stores is well positioned for increased growth as we continue to execute our capital investment program and we benefit from the rollout of our loyalty program to our Family Fare and D&W Fresh Market locations," said Dennis Eidson, president and chief executive officer, in a prepared statement.
The rollout began in mid-September, and Spartan is "pleased with the initial consumer response," he added.
