First-quarter sales inch up at SpartanNash

Lower sales in the retail segment partially offset growth in SpartanNash Co.’s food distribution and military businesses for its fiscal 2018 first quarter.

Meanwhile, the Grand Rapids, Mich.-based food wholesaler and retailer topped Wall Street’s consensus earnings-per-share estimate for the period.

Reporting after the stock market close on Tuesday, SpartanNash said revenue for the 16-week quarter ended April 21 totaled $2.39 billion, up 1.3% from $2.35 billion a year earlier.

Retail sales in the quarter fell 5% to $566.2 million from $596.2 million a year ago. SpartanNash attributed the decline mainly to the closure and sale of retail stores, which lowered retail revenue by $21.3 million, and to a 2.2% dip in same-store sales, excluding fuel. The company said the decreases were partially offset by higher fuel prices versus the prior-year period.

During the first quarter, SpartanNash shut three retail stores and ended the period with 142 corporate-owned retail stores, compared with 153 stores a year earlier. Its supermarket banners include Family Fare Supermarkets, D&W Fresh Market, VG’s Grocery, Dan’s Supermarket and Family Fresh Market.

“We are pleased with our performance in the first quarter and continued resilience in a challenging and evolving landscape,” President and CEO David Staples said in a statement. “Once again, we delivered on our financial and strategic objectives and remain on track to achieve our guidance for the year. Sales were driven by strong growth in the food distribution and military segments, as we benefited from our key initiatives to drive sales with both new and existing customers. At retail, we also continue to implement a number of innovative concepts, which contributed to a sequential improvement in comparable-store sales this quarter.”

Related:SpartanNash reports higher sales, lower earnings

SpartanNash posted adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $67.2 million in the first quarter, compared with $70.2 million in the year-ago period.

 “We continue to be pleased with our ability to grow sales volumes, specifically in the food distribution and military segments, as we enhance and develop new and innovative solutions for our customers. This innovative spirit and our team’s ability to attract new customers, as well as help existing accounts grow, has us excited about our prospects for 2018 and beyond,” Staples commented on the fiscal outlook.

The company expects investments in its network and service, as well as progress with its food processing operations, to drive sales gains in its food distribution segment, while new commissary business in the Southwest and the expansion of the DeCA private brand program will spur sales in the military segment.

Related:Family Fresh Market launches curbside pickup

“We continue to expect that our retail stores’ comparable sales trends will improve to slightly negative to flat by the end of the year, as our stores benefit from several of our innovative concepts and initiatives,” Staples added. “While higher transportation costs are expected to remain a headwind, we are working to mitigate the impact across all segments. We believe that our strategic initiatives combined with the strength and stability of our extensive distribution network will enable continued growth.”