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SpartanNash Co. enjoyed a 10-percent boost in earnings but saw net sales slip slightly during the first quarter of its 2015 fiscal year.
Adjusted earnings per share for continuing operations for the Grand Rapids, Mich.-based food distributor rose to 44 cents per diluted share for the quarter ending April 25. The company saw an operating cash hike of 50 percent to $48.9 million, while long-term debt dropped by $35 million.
Meanwhile, Q1 consolidated net sales decreased 0.9 percent to $2.31 billion compared to $2.33 billion last year as increases in the food distribution and military segments were offset by the impact of the company's store rationalization plan and significantly lower retail fuel prices compared to the prior year.
"We are encouraged by our performance in the first quarter," said Dennis Eidson, SpartanNash's president and CEO. "As expected, our sales comparisons were negatively affected by the significant winter weather benefit in the first quarter last year and inclusion of the stores acquired in the merger with Nash Finch. Despite these headwinds, we achieved slightly positive comparable store sales in our Michigan supermarkets and our adjusted earnings from continuing operations exceeded our expectations as we benefited from lower expense levels and merger synergies."
Eidsen also noted SpartanNash's expanding retail presence, most recently through the acquisition of Dan's Supermarket Inc., a six-store chain serving Bismarck and Mandan, N.D. "This acquisition offers us a great opportunity to serve additional customers in North Dakota and incorporate a successful independent business into our family of corporate-owned stores," he said of the deal, expected to close June.
Food Distribution Segment
Net sales for the food distribution segment increased 1.6 percent to $986.4 million in Q1 from $971 million a year ago. Q1 adjusted operating earnings for the segment were $22.2 million, compared to $19.1 million last year.
Q1 net sales for the retail segment decreased 7.6 percent to $626.9 million from $678.6 million a year ago, primarily due to $27.8 million in lower sales due to the closure of retail stores and fuel centers, $15.8 million due to significantly lower retail fuel prices and a 1.2 percent decrease in comparable store sales, excluding fuel. "As anticipated, comparable store sales reflect the inclusion of the stores obtained in the merger with Nash Finch, the significant winter weather benefit in the first quarter last year and limited center store inflation," the company reported. "Comparable store sales in the company's core Michigan supermarkets were slightly positive in the first quarter."
During Q1, SpartanNash opened one new store and fuel center and closed four stores, ending the quarter with 159 corporate-owned stores and 30 fuel centers.