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SpartanNash Company (SPTN - Free Report) posted mixed results for the first quarter of 2021 wherein the bottom line beat the Zacks Consensus Estimate while the top line missed the same. Meanwhile, both metrics plunged year over year.
We note that the company is in a planning phase of a supply-chain transformation initiative. The plan is focused on continuous improvements across the supply-chain operations.
Quarter in Detail
This presently Zacks Rank #3 (Hold) company posted adjusted earnings from continuing operations of 56 cents a share, outshining the Zacks Consensus Estimate by a penny. However, the bottom line decreased 16.4% year over year.
SpartanNash Company Price, Consensus and EPS Surprise
Consolidated net sales of $2,657.8 million dropped 7% year over year due to the lack of increased consumer demand with respect to COVID-19 that broke out last year. We note that the top line also lagged the Zacks Consensus Estimate of $2,723 million. Precisely, the company saw a sales decline across all three segments.
Gross profit dipped 1.3% year over year to $418 million. However, gross margin expanded 90 basis points (bps) to 15.7% on growth across all segments and higher proportion of margin accretive to Food Distribution and Retail segment sales.
Moreover, adjusted operating earnings came in at $30.9 million, which decreased 23.1% from $40.2 million reported in the year-ago quarter. Furthermore, adjusted EBITDA fell 12.4% to $64.8 million with margin contraction of 20 bps to 2.4%.
Segmental Analysis
Net sales at Food Distribution dipped 2.6% to $1,334.1 million owing to lack of higher sales attributable to elevated consumer demand in the prior year and the impact of management's decision to exit Fresh Production operations. This was partly compensated by growth across some existing Food Distribution customers. The segment accounted for 50.2% of the company’s consolidated sales in the first quarter of 2021.
Retail’s net sales dropped 5.5% to $739.4 million in the reported quarter, mainly due to the favorable prior-year sales attributable to higher coronavirus-led demand. Also, Retail comparable store sales fell 7% year over year. Nonetheless, comparable store sales grew 9.3% on a two-year basis. The retail segment represented about 27.8% of total sales in the period.
Finally, net sales at Military, which constituted about 22% of overall quarterly sales, were down 17.1% to $584.3 million. This was mainly due to cycling favorable sales on elevated consumer demand in the prior-year quarter apart from the persistent impact of restrictions on domestic base access and commissary shopping. Such restrictions are inducing significant declines in the segment and commissary sales as a whole.
Other Financials
SpartanNash ended the quarter with cash and cash equivalents of $23.3 million, net long-term debt of $503.8 million and total shareholders’ equity of $750.5 million.
Cash used by operating activities was $31.8 million during the first quarter. The company generated a negative free cash flow of $53.9 million in the 16 weeks ended Apr 24, 2021. Moreover, capital expenditures and IT capital totaled $24.1 million in the aforementioned period. For 2021, management now projects capital expenditures and IT capital in the band of $80-$90 million.
Additionally, management declared cash dividends of 20 cents a share for a total of $7.2 million through the reported quarter. It did not repurchase shares in the first quarter.
Guidance
Management remains focused on expanding customer relationships within the Food Distribution and retaining momentum in the Retail segment. The company will continue to make investments to boost efficiency and effectiveness. Further, it reiterated its sales outlook for the 52-weeklong 2021.
SpartanNash continues to project total net sales in the band of $8,800-$9,000 million, indicating a decline from $9,348 million generated in 2020. Retail comparable sales are likely to be a negative 5-7% for the current year. Moreover, Food Distribution sales are anticipated to decrease 1-3% while Military Distribution sales are estimated to fall 6-10% in 2021.
Further, adjusted EBITDA for 2021 is likely to fall in the range of $195-$210 million from $239 million delivered last year.
The company estimates reported earnings per share between $1.48 and $1.67, implying a decline from the prior-year’s tally of $2.12. Adjusted earnings per share are envisioned to be $1.65-$1.80 for the current year, indicating a decrease from $2.53 registered in 2020.
Price Performance
A look at this grocery retailer’s stock movement shows that its shares have increased 7.4% in the past six months compared with the industry’s 10.1% rally.
Nomad Foods (NOMD - Free Report) has a trailing four-quarter earnings surprise of 10.3%, on average, and a Zacks Rank #2 (Buy) at present.
United Natural Foods (UNFI - Free Report) , also presently a Zacks #2 Ranked stock, delivered an earnings surprise of 35.9% in the last reported quarter.
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SpartanNash's (SPTN) Q1 Earnings Beat Estimates, Decline Y/Y
SpartanNash Company (SPTN - Free Report) posted mixed results for the first quarter of 2021 wherein the bottom line beat the Zacks Consensus Estimate while the top line missed the same. Meanwhile, both metrics plunged year over year.
We note that the company is in a planning phase of a supply-chain transformation initiative. The plan is focused on continuous improvements across the supply-chain operations.
Quarter in Detail
This presently Zacks Rank #3 (Hold) company posted adjusted earnings from continuing operations of 56 cents a share, outshining the Zacks Consensus Estimate by a penny. However, the bottom line decreased 16.4% year over year.
SpartanNash Company Price, Consensus and EPS Surprise
SpartanNash Company price-consensus-eps-surprise-chart | SpartanNash Company Quote
Consolidated net sales of $2,657.8 million dropped 7% year over year due to the lack of increased consumer demand with respect to COVID-19 that broke out last year. We note that the top line also lagged the Zacks Consensus Estimate of $2,723 million. Precisely, the company saw a sales decline across all three segments.
Gross profit dipped 1.3% year over year to $418 million. However, gross margin expanded 90 basis points (bps) to 15.7% on growth across all segments and higher proportion of margin accretive to Food Distribution and Retail segment sales.
Moreover, adjusted operating earnings came in at $30.9 million, which decreased 23.1% from $40.2 million reported in the year-ago quarter. Furthermore, adjusted EBITDA fell 12.4% to $64.8 million with margin contraction of 20 bps to 2.4%.
Segmental Analysis
Net sales at Food Distribution dipped 2.6% to $1,334.1 million owing to lack of higher sales attributable to elevated consumer demand in the prior year and the impact of management's decision to exit Fresh Production operations. This was partly compensated by growth across some existing Food Distribution customers. The segment accounted for 50.2% of the company’s consolidated sales in the first quarter of 2021.
Retail’s net sales dropped 5.5% to $739.4 million in the reported quarter, mainly due to the favorable prior-year sales attributable to higher coronavirus-led demand. Also, Retail comparable store sales fell 7% year over year. Nonetheless, comparable store sales grew 9.3% on a two-year basis. The retail segment represented about 27.8% of total sales in the period.
Finally, net sales at Military, which constituted about 22% of overall quarterly sales, were down 17.1% to $584.3 million. This was mainly due to cycling favorable sales on elevated consumer demand in the prior-year quarter apart from the persistent impact of restrictions on domestic base access and commissary shopping. Such restrictions are inducing significant declines in the segment and commissary sales as a whole.
Other Financials
SpartanNash ended the quarter with cash and cash equivalents of $23.3 million, net long-term debt of $503.8 million and total shareholders’ equity of $750.5 million.
Cash used by operating activities was $31.8 million during the first quarter. The company generated a negative free cash flow of $53.9 million in the 16 weeks ended Apr 24, 2021. Moreover, capital expenditures and IT capital totaled $24.1 million in the aforementioned period. For 2021, management now projects capital expenditures and IT capital in the band of $80-$90 million.
Additionally, management declared cash dividends of 20 cents a share for a total of $7.2 million through the reported quarter. It did not repurchase shares in the first quarter.
Guidance
Management remains focused on expanding customer relationships within the Food Distribution and retaining momentum in the Retail segment. The company will continue to make investments to boost efficiency and effectiveness. Further, it reiterated its sales outlook for the 52-weeklong 2021.
SpartanNash continues to project total net sales in the band of $8,800-$9,000 million, indicating a decline from $9,348 million generated in 2020. Retail comparable sales are likely to be a negative 5-7% for the current year. Moreover, Food Distribution sales are anticipated to decrease 1-3% while Military Distribution sales are estimated to fall 6-10% in 2021.
Further, adjusted EBITDA for 2021 is likely to fall in the range of $195-$210 million from $239 million delivered last year.
The company estimates reported earnings per share between $1.48 and $1.67, implying a decline from the prior-year’s tally of $2.12. Adjusted earnings per share are envisioned to be $1.65-$1.80 for the current year, indicating a decrease from $2.53 registered in 2020.
Price Performance
A look at this grocery retailer’s stock movement shows that its shares have increased 7.4% in the past six months compared with the industry’s 10.1% rally.
Better-Ranked Stocks
Medifast (MED - Free Report) has an earnings surprise of 12.7% in the last four quarters, on average, and a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nomad Foods (NOMD - Free Report) has a trailing four-quarter earnings surprise of 10.3%, on average, and a Zacks Rank #2 (Buy) at present.
United Natural Foods (UNFI - Free Report) , also presently a Zacks #2 Ranked stock, delivered an earnings surprise of 35.9% in the last reported quarter.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
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