Last updated on May 5th, 2017 at 03:52 pm
Smart & Final Stores has reported its financial results for the first quarter 2017, ended March 26.
While net sales for the Commerce, California-based company increased 6.4 percent to $967.0 million, comparable store sales decreased 2.5 percent. The retailer cites impacts of deflation, cannibalization and adverse weather for the decline. Net loss for the quarter totaled $4.6 million, or $0.06 per diluted share
“The operating environment in the first quarter remained challenging, with lingering effects of deflation and cannibalization weighing on our sales performance and results of operations,” said Smart & Final President and CEO David Hirz. “Our ability to deliver first quarter net sales growth of 6 percent year-over-year, despite market conditions and severe weather in our market areas, highlights the effectiveness of our differentiated model, as a one-stop shop for our household and business customers, and our unique product assortment of private label, club sizes and high-quality perishables. In the second half of 2017, we expect deflationary and cannibalization pressures to alleviate, and with severe weather behind us, anticipate positive comparable store sales growth and improved financial comparisons.
“As we look beyond the current environment, we remain excited about the opportunity to grow and strengthen our two well-positioned store banners,” added Hirz. “During the first quarter, we opened two new Smart & Final Extra! stores and one new Cash & Carry store, and we are on track to open a total of 19 new stores in 2017. Our pipeline of 2017 new stores provides us the opportunity to strengthen our presence in existing market areas, as well as introduce our brands to household and business customers in new communities.”
Fiscal first quarter 2017 results
Net sales were $967.0 million in the 12-week quarter, representing a 6.4 percent increase as compared to $908.5 million for the same period of 2016. Net sales growth was driven by the net sales contribution of new stores, partially offset by a 2.5 percent decrease in comparable store sales. The decrease in comparable store sales was attributable to a 0.4 percent decrease in comparable transaction count, including the effect of cannibalization from new stores, and a 2.1 percent decrease in comparable average transaction size, including the impact of deflation in key product categories in both store banners, according to the company.
Net sales for Smart & Final banner stores were $765.0 million, a 7.8 percent increase as compared to $709.3 million for the same period of 2016. Comparable store sales for the Smart & Final banner decreased 2.5 percent in the first quarter.
Net sales for Cash & Carry banner stores were $202.0 million, a 1.5 percent increase as compared to $199.1 million for the same period of 2016. Comparable store sales for the Cash & Carry banner decreased 2.4 percent in the first quarter.
Growth and development
During the fiscal first quarter of 2017, the company opened two new Smart & Final Extra! stores and one new Cash & Carry store. As of March 26, the company operated a total of 308 stores, including 174 Smart & Final Extra! units, 74 legacy Smart & Final stores and 60 Cash & Carry locations.
In the second quarter of fiscal year 2017, the company expects to open four new Smart & Final Extra! stores and one new Cash & Carry unit.