MINNEAPOLIS — Buying ahead of rapid food-cost inflation and taking advantage of an early Easter holiday, Nash Finch boosted inventories and profits during the first quarter.
“I would have to admit our results were better than even we had anticipated,” said Alec Covington, Nash Finch's chief executive officer, in a conference call discussing results for the period, which ended March 22.
Nash Finch ramped up inventories during the quarter to get ahead of cost inflation that Covington described as “unprecedented.” The distributor passed those buying opportunities on to its customers, which helped sales improve by 1.7% when adjusted for the impact of Martin's Super Market, a large customer that left Nash Finch for another wholesaler last year, and for the Easter holiday falling in the first quarter this year rather than the second quarter last year.
Overall sales of $1.02 billion fell by 1% during the quarter. “That sales number was a bit stronger than we might have otherwise thought, driven by new customer growth, which we're excited about,” he said.
But inflation also boosted sales, he added. “We're seeing the most inflation I have seen in our business since the 1970s. It's unprecedented. When that happens we will take a forward position on as much inventory as we can.”
Net income of $11.3 million, or 85 cents a share, improved 113.2%. Profits were boosted in part by expense reductions and reductions in the company's bad debt reserves. The company also saw some earnings benefit from tax credits.