MINNEAPOLIS — Nash Finch Co. here said last week it is reluctant to forecast financial guidance for 2010 because it still sees a lot of uncertainties in the economy.
“Revenues will continue to be under pressure in the first quarter, and we don't know when that trend will reverse itself,” Alex Covington, president and chief executive officer, told investors.
“We fail to see any indications the economy is recovering. Although deflation is bottoming out, we don't see much job recovery nor a return of consumer confidence. Once we get through the first quarter, we think we'll have better visibility than we do now on what we can expect for the year.”
Covington made his remarks in a conference call to discuss financial results for the fiscal year, which ended Jan. 2.
The company reported a loss of $43 million for the 12-week fourth quarter — resulting from a significant goodwill charge in its retail segment — compared with net income of $5.4 million in last year's 13-week quarter, while sales for the quarter fell 2.9% to $1.2 billion. For the 52-week year, net income dropped 91.6% to $2.8 million, while sales rose 12.5% to $5.2 billion.
For the year, food distribution sales, which accounted for 51% of the total, fell 3.1%, to $2.7 billion; military distribution sales (38% of the total) rose 53.8% to $2 billion; and retail sales (11%) fell 5% to $602.5 million.
Comparable-store stores in the retail segment were down 3.1% for the quarter, Covington noted. Although most of the company's conventional corporate stores performed well, albeit negatively, he said most of the decline for the segment was due to the four Avanza stores the company operates in the Greater Denver market, “where everyone but Wal-Mart is showing market-share declines, especially Hispanic operators.”
He said Nash Finch expects retail comps to decline 3% to 4% during the first quarter, “and we don't anticipate any improvement till the economy improves and buying habits change.”
Covington said Nash Finch will be discontinuing its supply relationship over the next 60 days with a group of 30-plus Piggly Wiggly stores based in Kingston, N.C., that are being serviced out of the wholesaler's distribution center in Lumberton, N.C., “because some of the group's members have decided to move to another supplier,” which was not identified.
That change will result in a reduction of less than 3% of the company's annual revenues, he noted.
Going forward, most of Nash Finch's focus will be on growing its military distribution segment, Covington said. Having acquired three military distribution centers last year and another in late January, the company will continue to seek additional locations “before the real estate market returns to normal pricing,” he said.
The company expects to invest $35 million to $40 million in capital expenditures this year, Covington said.
|Inc/Share||($3.20 cents)||41 cents|
*THE MOST RECENT QUARTER AND YEAR INCLUDED ONE LESS WEEK THAN YEAR-AGO RESULTS.