SpartanNash Achieves Stronger-Than-Expected Q2 Performance
SpartanNash, which runs three different business segments as a food solutions company, has exceeded analyst expectations for the second quarter. Retail comparable sales rose 6.5% during the 12-week period ending July 16, while net sales jumped 7.9% to reach $2.3 billion. Gross profit for the quarter was 15.6% of net sales.
During the same period, the company also beat earnings forecasts. While earnings came in at $5.1 million for the second quarter compared to $16.8 million in the prior year quarter, adjusted EBITDA climbed 13.7% to top $61.8 million and adjusted earnings per diluted share were $0.66 versus the market estimate of $0.57.
Breaking it down by business areas, net sales for SpartanNash’s retail stores edged up 8.5% to reach $672.4 million, compared to $620 million in the second quarter of 2021. In its food distribution group, net sales climbed 5.9% to top $1.12 billion, a surge attributed mainly to the impact of inflation on pricing. Meanwhile, net sales increased 12.4% in the military arm of the business to $483.2 million.
"We are pleased with the significant momentum in our business as evidenced by our strong second quarter results, including impressive gains in sales and profits," remarked SpartanNash President and CEO Tony Sarsam. "These results were driven by our continued turnaround in the military business and the margin improvements across our distribution businesses. With the launch of our merchandising transformation, we are doubling down on our efforts to maintain price competitiveness in this highly inflationary environment."
Sarsam shared a positive outlook for the rest of the fiscal year. "Due to our strong performance to-date and the success of our supply chain transformation, we are raising our full-year outlook for the second time this year,” he said. “We remain steadfastly committed to delivering strong results and creating sustainable shareholder value through ‘Our Winning Recipe,’ which leverages our three core capabilities: people, operational excellence and insights that drive solutions."
SpartanNash had a busy second quarter in many ways, fending off activist investors looking to change the board of directors, hosting a large expo for independent grocery customers, reopening a new store in West Michigan and unveiling its recently-renovated main office, among other activities.
SpartanNash’s core businesses include distributing grocery products to independent and chain retailers, its corporate-owned retail stores, and U.S. military commissaries and exchanges, as well as fresh produce distribution and fresh food processing. No. 41 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America, the Grand Rapids, Mich.-based company serves customer locations in all 50 states and the District of Columbia, Europe, Cuba, Puerto Rico, Honduras, Iraq, Kuwait, Bahrain, Qatar and Djibouti. SpartanNash also operates 145 supermarkets and employs 17,500 associates.
