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Nash Finch Co. reported a total sales increase of 2.3 percent for the first quarter of 2013, ending March 23.
Total Q1 company sales were $1.09 billion compared to $1.07 billion in the prior-year quarter. The acquisition of 18 No Frills stores during Q3 2012 and 12 Bag ‘N Save stores during Q2 2012 contributed to a net increase in total company sales of $35 million.
“We are pleased with the increase in total company sales over last year, which was driven by sales increases in our combined food distribution and retail segments,” said Alec Covington, Nash Finch president and CEO. “Adjusted EBITDA came in slightly better than we expected for the quarter. We are continuing to see pressure on gross margins in the military segment from lower contractual margin rates and lower food price inflation than the first quarter last year.”
Q1 adjusted net earnings were $2.7 million or 20 cents per diluted share compared to $6.2 million or 47 cents per diluted share a year ago.
Military segment net sales were $532 million, a decrease of 0.4 percent compared to the year-ago period. Including the impact of consignment sales, comparable military sales decreased 0.2 percent in the first quarter.
“We were pleased to see a rebound in military sales during the first quarter as compared to the sluggish sales we experienced in the fourth quarter,” Covington said. “The worldwide military network we have created continues to garner new accounts, and we anticipate earning additional new business once the freezer and chill capacity is added to our new Landover, Maryland, facility later this year.”
Q1 sales for the combined food distribution and retail segment were $562.2 million, an increase of 5 percent compared to the prior year quarter. The increase was primarily attributable to the Bag ‘N Save and No Frills acquisitions, which were responsible for a $77.3 million increase in sales versus a year ago. Because these were acquisitions of food distribution customers, these transactions were also responsible for a $42.3 million decrease in distribution segment sales as compared to the prior year quarter. Retail same-store sales declined 0.5 percent as compared to the prior year quarter.
“Sales were strong in the combined Food Distribution and Retail segments, driven primarily by the Omaha store acquisitions last year which continued to meet our expectations,” Covington said. “In addition, our efforts to grow our traditional food distribution business through our unwavering commitment to the success of the independent grocer are gaining traction.”
Minneapolis-based Nash Finch distributes food to military commissaries and independent grocery retailers located in 37 states, the District of Columbia, Europe, Cuba, Puerto Rico, the Azores, Bahrain and Egypt. The company also owns and operates a base of retail stores, primarily supermarkets under the Family Fresh Market, Econofoods, Family Thrift Center, No Frills, Bag 'n Save, Avanza and Sun Mart trade names.