Wholesale Segment Sales A Drag On SpartanNash Q3 Results
Third quarter net sales at SpartanNash decreased slightly as an increase in volume in the company’s Retail division was offset by lower volume in its Wholesale segment
For the quarter ended October 5, company-wide net sales decreased 0.6% to $2.25 billion. Wholesale segment net sales decreased 1.6% to $1.58 billion primarily due to reduced case volumes in the independent retailers and national accounts customer channels. Net earnings in the quarter were $10.9 million, down from net earnings of $11.2 million in the comparable quarter the previous year.
Retail segment net sales increased 1.9% to $674.6 million, while comparable store sales were down 0.7%. Incremental sales from the recently acquired Metcalfe's Market stores offset lower consumer demand trends.
Net earnings in the quarter were $10.9 million as compared to $11.1 million in the comparable quarter the previous year. Increased Wholesale segment gross margin rates, including benefits from the merchandising transformation, and lower corporate administrative costs, as well as reduced LIFO expense, were offset by lower case volumes, higher restructuring charges, increased healthcare costs, and increased Retail segment store labor.
"Our team made significant progress on our strategic plans this past quarter while sustaining profitability in a complex environment," said Tony Sarsam, president and CEO of SpartanNash. "We continue to invest in our business to expand margin, capture additional cost savings, collaborate with our suppliers, and deliver value-add products and outstanding service to our wholesale customers and retail shoppers. All of these elements have established a solid foundation to drive organic and inorganic growth, including the upcoming acquisitions of Fresh Encounter and Markham."
For the remainder of its fiscal year, SpartanNash is forecasting total sales of between $9.5 billion and $9.7 billion, compared with total net sales of $9.729 billion in the prior fiscal year. Adjusted earnings per share are forecast to fall between $1.85 to $1.95, down from adjusted EPS of $2.18 in the prior fiscal year.
