TOP TAKEAWAYS
- SpartanNash plans to increase net sales by more than $1 billion through customer acquisition and continued expansion into value-add offerings
- Net sales were favorably impacted by inflation across all of SpartanNash’s lines of business
- At the beginning of Q3, SpartanNash combined the previous food distribution and military operating segments into one operating segment: Wholesale
Food solutions company SpartanNash has provided preliminary results for the 12-week third quarter ended Oct. 8.
The Grand Rapids, Mich.-based company said it expects certain results for the third quarter will include the following:
- Net sales of $2.28 to $2.31 billion, compared to $2.07 billion in the prior year quarter
- Net earnings of $8.9 to $9.9 million, compared to $15.2 million in the prior year quarter
- Adjusted EBITDA(1) of $56.3 to $58.3 million, compared to $51.5 million in the prior year quarter
The company’s preliminary results were driven by several factors, including:
- Retail comparable store sales are expected to be up approximately 8% for the quarter
- Improvements in supply chain expense rates resulting from efficiencies realized from the company’s supply chain transformation initiative
- Net sales were favorably impacted by inflation across all of SpartanNash’s lines of business
Through the third quarter, the company paid $22.5 million in cash dividends, equal to $0.63 per common share. The company also repurchased 757,928 shares during year-to-date period for a total of $23.3 million, with an average price of $30.73 per share. In total, the SpartanNash returned $45.7 million to shareholders through the third quarter
Fiscal 2022 outlook
SpartanNash is also updating certain elements of its fiscal 2022 guidance. The company now expects net sales to range from $9.5 to $9.7 billion (previously $9.3 to $9.6 billion) and adjusted EBITDA to range from $237 to $242 million (previously $227 to $240 million).
“SpartanNash has reached an inflection point, and now we are accelerating our transformational initiatives and strategic plans, which continue to increase topline sales, decrease costs, grow share, drive results and return value to our shareholders,” said SpartanNash President and Chief Executive Officer Tony Sarsam. “Achieving our 2025 targets will translate to an increased adjusted EBITDA of nearly 70% since 2019 and 40% since 2021.”
The company’s fiscal 2025 long-term financial targets include growing:
- Net sales to more than $10 billion, an increase of 12% from fiscal 2021
- Adjusted EBITDA to more than $300 million, an increase of 40% from fiscal 2021
These targets are expected to be achieved through several initiatives, including:
- Increasing net sales by more than $1 billion through customer acquisition and continued expansion into value-add offerings
- Realizing benefits of $125 to $150 million during fiscal 2021 through 2025 with supply chain and merchandising transformation initiatives, as well as ongoing marketing innovation
- Driving shareholder value through continued focus on return on capital
Operating segment change
At the beginning of the third quarter of 2022, SpartanNash combined the previous food distribution and military operating segments into one operating segment: Wholesale.
The change in the operating segments was driven by both a change in the company’s organizational structure, and in the reporting utilized by the Chief Operating Decision Maker. As a result, SpartanNash now operates two reportable segments: Wholesale and Retail.
The company will announce its full third quarter results before the stock market opens on Wednesday, Nov. 9. at 8:30 a.m. ET. There will also be a simultaneous, live webcast made available at SpartanNash's website under the "Investor Relations" section and will remain archived on the Company's website.
