Last updated on July 27th, 2017 at 04:35 pm
On July 25, Smart & Final Stores reported financial results for its fiscal second quarter ended June 18, achieving both net and comparable-store increases.
Net sales were up 3.9 percent to $1.08 billion, and comparable store sales were up 1.3 percent during the quarter at Smart & Final, which operates 314 grocery and foodservice stores under the Smart & Final, Smart & Final Extra! and Cash & Carry Smart Foodservice banners in California, Oregon, Washington, Arizona, Nevada, Idaho, Montana and Utah (it also has 15 stores in northwestern Mexico operated through a joint venture).
“The second quarter marked a return to positive comparable store sales growth, reflecting the expected lessening of pressures from deflation and growth-related sales cannibalization, as well as from customer growth attributable to our strong competitive position,” said David Hirz, president and CEO of the Commerce, California-based retailer. “We expect sales growth will continue to be supported by the maturation of new stores opened over the past two years, as well as marketing and promotional initiatives aimed at increasing store traffic and building basket size.”
Hirz noted that one of the company’s strengths is that its stores “meet the needs of both business and household customers.” They carry an array of warehouse-club sized and private label products, as well as items for small businesses.
He added, “With a broad range of online and delivery options to serve our customers, Smart & Final is well positioned for continued success in an evolving marketplace.”
Net sales for the 12-week quarter, as noted, were $1.08 billion, a 3.9 percent increase vs. $1.04 billion for the same period of 2016. Net sales growth was driven by a 1.3 percent increase in comparable store sales and from the net sales contribution of new stores, Smart & Final said.
The increase in comparable store sales was attributable to a 1.9 percent increase in comparable transaction count, partially offset by a 0.6 percent decrease in comparable average transaction size, including the effect of cannibalization from new stores.
Net sales for Smart & Final banner stores were $836.1 million, a 3 percent increase compared to $811.8 million for the same period of 2016. Comparable store sales growth for the Smart & Final banner was 1.2 percent in the second quarter.
Net sales for Cash & Carry banner stores were $242.2 million, a 6.9 percent increase vs. $226.5 million for the same period of 2016. Comparable store sales growth for that banner was 1.8 percent in the second quarter.
Net income in the second quarter was $7.1 million, including the effect of store development expenses, compared to $7.8 million in 2016.
For the 24 weeks ended June 18, net sales were $2.05 billion, an increase of 5.1 percent vs. $1.95 billion in the same period of 2016. Net sales growth was driven by the net sales contribution of new stores, partially offset by a 0.5 percent decline in comparable store sales, the company said. The decline in comparable store sales was attributable to a 0.8 percent increase in comparable transaction count and a 1.3 percent decrease in comparable average transaction size.
Net sales for Smart & Final banner stores in the 24 weeks were approximately $1.6 billion, an increase of 5.3 percent as compared to approximately $1.5 billion in the first half of 2016. Year-to-date comparable store sales for the Smart & Final banner decreased 0.6 percent.
Net sales for Cash & Carry banner stores were $444.2 million, a 4.4 percent increase compared to $425.7 million in the same period of 2016. Year-to-date comparable store sales for the Cash & Carry banner decreased 0.2 percent.
Growth and development
During the fiscal second quarter of 2017, the company opened four new Smart & Final Extra! stores, completed one conversion of a legacy Smart & Final store to the Extra! format and relocated one store. The company opened one new Cash & Carry store.
As of June 18, the company operated a total of 313 stores, including 180 Smart & Final Extra! stores, 72 legacy Smart & Final stores and 61 Cash & Carry stores.
In the third quarter, the company expects to open three new Smart & Final Extra! stores and two new Cash & Carry stores.