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Nash Finch Sees Promotions Driving Sales

MINNEAPOLIS — Nash Finch Co. here said Thursday it plans to continue to make promotional investments in selected markets to drive sales, based on the top-line improvements it saw in its retail segment during the third quarter.

MINNEAPOLIS — Nash Finch Co. here said Thursday it plans to continue to make promotional investments in selected markets to drive sales, based on the top-line improvements it saw in its retail segment during the third quarter.

Comparable-store sales at its corporate stores declined 0.5% in the quarter, following a negative 3.7% comp in the second quarter, “and if we continue to execute the way we're executing right now and the market remains about steady, we hope to flip that to flat to slightly positive in the fourth quarter,” Alec Covington, president and chief executive officer, told analysts during a conference call.

For the 16-week quarter that ended Oct. 8, net income fell 34.2% to $10.1 million — primarily due to a series of one-time charges, the company said — while sales fell 2.6% to $1.5 billion due to the closing or sale of eight retail stores and the loss in 2010 of the supply business for 25 Piggly Wiggly stores in the Southeast to Merchants Distributors Inc., Hickory, N.C. For the 40-week, year-to-date period, net income declined 18.8% to $27.6 million; while sales dropped 4.5% to $3.7 billion and retail comps fell 2.5%.

Covington said a new asset-based loan agreement that should be in place by the end of the year to replace its current ABL facility would impact fourth-quarter results. “When you put a new ABL facility in place, there are a few financing costs that get written off as a result, and we believe that's going to result in a one-time cost of 9 cents to 10 cents in the fourth quarter,” he explained.