SpartanNash reported first-quarter financial earnings that exceeded Wall Street expectations on the strength of cost controls and merger synergies amid flat revenues.
The Grand Rapids, Mich.-based company reported sales of $2.3 billion for the quarter, which ended April 25, essentially flat from the first quarter last year. Total revenues reflected higher sales in Spartan’s distribution and military sales segments and a 7.6% decline in retail sales. The latter decline was due to store closures, significant declines in fuel prices and a 1.2% decline in non-fuel comparable-store sales. Comps were negatively affected by lapping weather-related sales gains related in the prior period, officials said.
Net earnings from continuing operations of $10.3 million was down from $12.5 million in last year’s first quarter, but earnings per share of 44 cents beat estimates of 41 cents. Earnings were impacted this quarter by a $10 million restructuring charge, and by $4.3 million in merger-related expenses in last year’s first quarter.
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Dennis Eidson, SpartanNash’s president and CEO, said he was encouraged by progress in the quarter, but noted that retail sales were pressured by some lower-performing stores and competitive market positions acquired in the Nash Finch deal. Comps in Spartan’s legacy Michigan stores were positive in the quarter.
“Omaha has been a particularly difficult marketplace,” Eidson said in a conference call. “There’s been a competitive intrusion led by Walmart and Hy-Vee, and we’re fighting back.”
Eidson said the company is currently rolling out merchandising, pricing and promotional strategies across the acquired stores.
Spartan’s wholesale segment grew sales by 1.6% to $986.4 million in the quarter, and profits in the segment increased by 16% as a result of merger synergies and reduced health care expenses. Military sales increased by 2.2% to $699.4 million and profits improved behind higher sales volume and improved efficiency.
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