Smart & Final Reports Net Sales Increase of 3.7% for Fiscal 2018

Smart & Final reported its Q4 and fiscal 2018 financial results, with net sales of $4,741.8 million for the year, an increase of 3.7 percent, compared with $4,570.6 million in 2017. The company noted that net sales growth was driven in part by the net sales contribution of new stores and a 1.2 percent increase in comparable-store sales. The increase in comparable-store sales was attributable to a 2.3 percent increase in comparable average transaction size, partly offset by a 1.1 percent decrease in comparable transaction count. 

“Our fiscal 2018 performance was solid, with 3.7 percent year-over-year sales growth, while facing an environment with low rates of product price inflation and rising operating costs that created significant headwinds to earnings growth,” said David Hirz, president and CEO. “In 2019, we will continue to aggressively expand online options for both our small-business and household customers, by introducing new ecommerce channels and order fulfillment options. Our vision will offer even greater levels of value and convenience to our target customers, at attractive economics, to capitalize on the significant growth in ecommerce that we continue to experience.”

Net sales for Smart & Final banner stores were $3,672.2 million, an increase of 3.2 percent as compared with $3,557.7 million in 2017. Full-year 2018 comps for the Smart & Final banner edged up 0.5 percent.

Net sales for Smart Foodservice Warehouse banner stores were $1,069.6 million, a 5.6 percent increase as compared with $1,012.9 million in 2017. Full-year 2018 comps for the Smart Foodservice Warehouse banner increased 3.6 percent.

Adjusted net income was $31.4 million, as compared with $33.7 million in 2017. Adjusted net income per diluted share was $0.42, compared with $0.45 per diluted share in 2017.

Adjusted EBITDA was $181.8 million, as compared with $184.4 million in 2017.

Q4 Results

During the fourth quarter of 2018, the Smart & Final opened one new Smart & Final Extra! store, relocated one legacy Smart & Final store to an Extra! format store and closed one legacy Smart & Final store whose lease was expiring. The chain also opened two new Smart Foodservice Warehouse stores during the fourth quarter.

“In the fourth quarter, we delivered our seventh consecutive quarter of positive comparable-store sales, led by growth in both average transaction size and comparable transaction count, reflecting our unique assortment of business and club-pack items, our high-quality private label offerings, and convenient ecommerce options,” Hirz added.

Net sales were $1,102.4 million in the 12-week quarter ended Dec. 30, 2018, representing a 3.2 percent increase as compared with $1,067.9 million for the same period of 2017. Net sales growth was driven by a 1.9 percent increase in comps and from the net sales contribution of new stores. Comps growth comprised a 1.7 percent increase in comparable average transaction size and a 0.2 percent increase in comparable transaction count.

Net sales for Smart & Final banner stores were $864.4 million, a 2.7 percent increase as compared with $841.4 million for the same period of 2017. Comps growth for the Smart & Final banner was 1.3 percent in the fourth quarter.

Net sales for Smart Foodservice Warehouse banner stores were $238.0 million, a 5 percent increase as compared with $226.6 million for the same period of 2017. Comps growth for the Smart Foodservice Warehouse banner was 4.3 percent in the fourth quarter.

Adjusted net income was $6 million, or $0.08 per diluted share, as compared with adjusted net income of $11.3 million, or $0.15 per diluted share, for the same period of 2017.   

Adjusted EBITDA was $41.5 million as compared with $49.1 million for the same period of 2017.

As of Dec. 30, 2018, Los Angeles-based Smart & Final  operated a total of 326 stores, including 201 Smart & Final Extra! stores, 59 legacy format Smart & Final stores and 66 Smart Foodservice Warehouse stores. The company is No. 20 on Progressive Grocer’s 2018 Super 50 list of the top grocers in the United States.