MINNEAPOLIS — Nash Finch Co. here said it expects to complete the integration of the 30 stores it acquired in the Omaha, Neb., market by the end of the first quarter while keeping its eye peeled for additional acquisitions.
The company acquired 18 No Frills stores during the third quarter, which ended Oct. 6, and 12 Bag ’N Saves in the second quarter — deals the company had been discussing for six years, Alec Covington, president and chief executive officer, told industry analysts during a conference call.
“So we’re always looking, talking and listening for opportunities as they come along, but it’s hard to forecast when they will come along,” he noted.
For the 16-week third quarter, net income rose 44.7% to $14.6 million; excluding the impact of significant items totaling $3.4 million earlier in the year and $6.3 million in the year-ago quarter, adjusted net income was $18 million, up 9.8%.
Sales for the quarter increased 1.7% to $1.5 billion, boosted by $47.2 million from the two acquisitions; however, the growth in retail business resulted in a decline of $57.1 million in the company’s food distribution segment.
Adjusting for the acquisitions, Nash Finch said comparable-store sales for the quarter fell 1.4%.
Covington said gross margins were negatively impacted during the quarter due to an investment in a new private-label marketing program and other promotions “that are starting to drive higher case volume.”
Read more: Nash Finch to Close Iowa DC
“We continue our focus on sales growth, managing working capital and implementing cost reduction strategies to benefit us in the longer tem,” he noted.
For the 40-week period the company reported a loss of $64.9 million, compared with net income of $27.6 million for the same period a year ago. Sales for the year to date fell 0.6% to $3.7 billion.
The company said the loss resulted from a series of significant items, including transaction and integration costs related to retail acquisitions; conversion and transition costs in the military segment; and food distribution transition costs this year; plus restructuring costs for centralization, and unusual professional fees a year ago.
On a segment basis, sales in the food distribution and retail segment rose 3.5% to $788.3 million for the quarter, with sales down 11.9% to $546.1 million in food distribution and up 71.2% to $242.2 million in retail, while sales in the military distribution segment fell 0.2% to $708.1 million.
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