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Grand Rapids, Mich.-based SpartanNash Co. reported consolidated net sales of $1.8 billion for its 12-week second quarter that ended July 18.
Increases in the food distribution segment were offset by the impact of closed stores, a decrease in comparable store sales, significantly lower retail fuel prices compared to the prior year, and lower sales in the military segment, the company reported. Meanwhile, SpartanNash reported adjusted earnings of $58.5 million, or 3.3 percent of net sales, compared to $58.3 million, or 3.2 percent of net sales, for the year-ago period. Reported operating earnings increased to $36.8 million from $32.6 million in the prior year quarter, credited to improved operational efficiencies and lower merger and integration expenses. Adjusted earnings from continuing operations for Q2 increased to $19.8 million, or 53 cents per diluted share, from $19.1 million, or 50 cents per share, a year ago.
"We are pleased with our earnings results in the second quarter," said Dennis Eidson, SpartanNash's president and CEO. "In spite of a challenging sales environment, we grew operating profit and exceeded earnings expectations due to our disciplined cost control, merger synergies and improved operational efficiencies. While we experienced sales growth in our food distribution segment, sales in our retail segment were negatively affected by the closure of stores, lower fuel prices, a continued competitive retail food environment and unfavorable weather conditions in our Michigan markets. As we have previously mentioned, we are very focused on improving the performance of our retail segment's western store base. We continue to make progress on our initiatives, including the rollout of merchandising, pricing, and promotional strategies across this store base, as well as the re-grand opening of our six remodeled stores in Omaha a few weeks ago. In addition, we are pleased to have acquired six stores from Dan's Supermarket Inc., which was not previously supplied by SpartanNash, in Bismarck, North Dakota, and have been encouraged by the transition to SpartanNash operations."
Food Distribution Segment
Net sales for the food distribution segment increased 1.9 percent to $782.7 million in Q2 from $767.9 million for the second quarter last year. Q2 adjusted operating earnings for the food distribution segment increased to $18.5 million from adjusted operating earnings of $13.5 million in the same period last year.