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SpartanNash Sales Increases Benefit From Holiday Shift

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Last updated on March 25th, 2021 at 07:23 pm

SpartanNash said Wednesday that business gains and the timing of the New Year holiday resulted in fourth quarter sales growing to $1.83 billion from $1.77 billion a year ago.

Net sales for the food distribution segment increased to $838.6 million from $773.7 million in the same quarter a year ago. The Grand Rapids, Michigan-based company said the gains and holiday timing—New Year’s Day was shifted from the fourth quarter to the first quarter of fiscal year 2017—more than offset the negative impact of deflation. The holiday shift also helped mitigate continued challenging economic conditions, particularly in North Dakota, the company said.

Net sales for the military segment increased to $510.4 million from $504.7 million in the prior-year quarter. The increase was due to new business gains associated with the distribution of fresh products and the holiday timing, partially offset by lower sales at commissaries operated by the Defense Commissary Agency (DeCA).

Net sales for the retail segment were $479.2 million in the fourth quarter vs. $489.6 million for the prior-year quarter. The decrease was attributable to $7.7 million in lower sales resulting from retail store closures and negative comp-store sales. It was partially offset by a $2.4 million increase in sales due to higher retail fuel prices and gallons sold compared to the prior year. Comp-store sales for the quarter, excluding fuel, improved to -1.2 percent from -1.8 percent a quarter ago. That marks the fourth consecutive quarter of improvement, said SpartanNash CEO and Chairman Dennis Eidson.

“Our fourth quarter performance was a strong finish to an equally strong fiscal 2016 as we continued to grow sales and exceed our earnings guidance despite a continued challenging deflationary environment,” Eidson said. “Our results reflect the sound execution of our strategy to leverage our supply chain network in order to drive new and expanded customer supply business.”


Fiscal year results

For fiscal 2016, consolidated net sales increased from $7.65 billion in fiscal 2015 to $7.73 billion, an $82.6 million jump. The increase in net sales was primarily driven by business gains from new and existing customers in the food distribution and military segments, which more than offset the negative impact of food deflation on all segments, lower sales at DeCA-operated commissaries and lower sales attributable to both the decrease in comparable retail store sales and the closure of retail stores, the company said.

Reported earnings from continuing operations for fiscal 2016 were $57.1 million, or $1.52 per diluted share, compared to $63.2 million, or $1.67 per diluted share, in the prior year.

Adjusted earnings from continuing operations for fiscal 2016 increased to $82.2 million, or $2.19 per diluted share, from $74.6 million, or $1.98 per diluted share, in the prior year. The company said the increase was primarily attributable to sales growth at food distribution and lower operating expenses due in part to lower depreciation and productivity and efficiency initiatives, which offset the negative impact of deflation in all segments.

Adjusted EBITDA for fiscal 2016 improved to $231.0 million from $229.5 million in fiscal 2015.



Eidson said the recent acquisition of Caito Foods has increased the company’s customer base and strengthened its fresh offerings with products such as fresh-cut fruit and vegetables and prepared salads.

“With Caito’s Fresh Kitchen facility commencing production in the first half of fiscal 2017, we are optimistic about the opportunities to offer fresh, protein-based foods and prepared meals to our customers,” Eidson said.

SpartanNash also has been awarded a new initiative from DeCA to offer private brand products in its commissaries worldwide. Those products will begin to roll out in the first half of fiscal 2017.

“We anticipate a steady ramp-up of private brand products throughout 2017 but expect minimal financial benefit next year due to the anticipated costs to launch the program,” Eidson said.

For fiscal 2017, the company expects to see growth in year-over-year sales in the food distribution segment, continued challenges with sales at DeCA impacting the military segment and slightly negative to flat comparable retail store sales.

“As we look forward to 2017 and beyond, we believe we are well positioned to continue to leverage our strong business model, distribution network and balance sheet to grow sales and earnings,” Eidson said. “We have a solid pipeline of opportunities in our distribution and military channels and will continue to focus on driving growth in our retail business, primarily through the expansion of our consumer-centric merchandising and marketing programs.”

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