MINNEAPOLIS — Nash Finch Co. here last week said sales were down for the first quarter after the loss of a wholesale customer and declines in comparable-store sales.
The company said net income was down about 5.8%, to $7.48 million, for the 12-week quarter, which ended March 26. Sales were off 6.8%, to about $1.1 billion. Excluding the impact of the sales decrease of $34.5 million from the loss of a Piggly Wiggly buying group to another supplier last year, sales would have been down 4% vs. the year-ago quarter, the company said.
The company's gross margins improved to 8.1% of sales in the quarter, vs. 7.8% a year ago. EBITA also proved in the company's military and the combined wholesale and retail divisions.
“We are pleased with the year-over-year increase in our first quarter consolidated EBITDA and the improvements in consolidated EBITDA from each of our business segments, as well as the improvement in EBITDA as a percentage of sales,” said Alec Covington, president and chief executive officer. “While the overall top line continues to be a challenge, we have focused on improving profitability through initiatives to increase margins, improve productivity and contain expenses.”
Net income in the quarter included one-time charges of $1.8 million, after tax, and about $300,000 in the first quarter of a year ago.
Sales in the combined wholesale and retail segment fell by 12.1% in the first quarter, attributable to the loss of the wholesale customer, plus a 7.1% decrease in comparable-store sales overall. The retail segment same comparable-store sales declines of 3% for the quarter.
EBITDA in the distribution and retail segment, however, increased by 6.9% over year-ago levels, to $14.7 million, including $10.6 million in distribution and $4.1 million in retail, increases of 3.2% and 17.9%, respectively. As a percent of sales, EBITDA was 2.6% for the wholesale division, vs. 2.1% a year ago.
In the military segment, Nash Finch reported a 2.3% gain in EBITDA, to $15.1 million, on a 0.4% decline in sales, to $537.4 million, compared with year-ago results.
Analysts said they were surprised by the EBITDA gains in the quarter.
“We still expect top-line trends to remain negative over the balance of the year, but comparisons should improve now that [Nash Finch] has cycled the impact from the loss of the Piggly Wiggly buying group from last year,” said Ajay Jain, an analyst with Hapoalim Securities, New York.
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