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SpartanNash (SPTN) Q2 Earnings Top Estimates, Sales Miss
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SpartanNash Co. (SPTN - Free Report) delivered second-quarter 2024 results, wherein the top line missed the Zacks Consensus Estimate, whereas the bottom line beat the same. Both metrics declined year over year.
However, SpartanNash's execution of transformational initiatives has created a foundation for growth while contributing to year-to-date margin gains. The progression of investments in margin-enhancing programs is pleasing, with expected benefits by the end of 2024.
Building on this progress, a Customer Value Proposition initiative is being piloted, informed by extensive shopper data and insights, aimed at enhancing freshness, value and convenience. As part of this store modernization program, prices on 6,000 products are being lowered to bring more value to shoppers.
SpartanNash Company Price, Consensus and EPS Surprise
The Zacks Rank #3 (Hold) company posted adjusted earnings from continuing operations of 59 cents per share in the second quarter, down 9.2% from adjusted earnings of 65 cents in the year-ago quarter. The metric surpassed the Zacks Consensus Estimate of 52 cents.
Consolidated net sales were $2,230.8 million, down 3.5% year over year. Also, the top line missed the Zacks Consensus Estimate of $2,263 million. The decline in the year-over-year performance was driven by reduced volumes in the Wholesale and Retail segments.
Gross profit rose 0.2% year over year to $353 million. The decrease resulted from reduced cost of sales. We note that the gross margin expanded 60 basis points (bps) to 15.8% from the prior-year period.
Selling, general and administrative expenses declined 0.2% year over year to $318.2 million. As a percentage of net revenues, selling, general and administrative expenses expanded 50 bps to 14.3% in the first quarter of 2024.
Adjusted EBITDA was down 2.4% year over year to $64.5 million compared with $66.1 million in the year-ago period. We note that the adjusted EBITDA margin was 2.9%, flat year over year in the quarter under review.
Image Source: Zacks Investment Research
Segmental Details
The wholesale segment’s net sales declined 4.8% year over year to $1.55 billion. This was primarily attributed to lower volume in the national accounts customer channel.
Retail’s net sales decreased 0.4% year over year to $676.1 million in the reported quarter. Also, comparable store sales in the retail sector declined 2.5% year over year. Additional sales from the recently acquired Metcalfe's Market stores were counterbalanced by a decrease in consumer demand.
Other Financials
SpartanNash ended the quarter with cash and cash equivalents of $25.2 million, long-term debt and finance lease liabilities of $586.4 million, and a total shareholders’ equity of $776.3 million.
As of Jul 13, 2024, cash generated from operating activities grew 166% year over year, reaching $132.1 million from $49.7 million primarily due to ongoing working capital management initiatives. Capital expenditure and IT capital totaled $73.4 million in the same period. For 2024, management projects capital expenditure and IT capital of $135-$145 million.
Additionally, $30.4 million was returned to shareholders through $15.1 million in share repurchases and $15.4 million in dividends.
2024 Outlook
SpartanNash is making significant strides toward reaching its long-term strategic objectives, with a keen focus on enhancing value for customers and achieving additional cost efficiencies through transformative initiatives.
Management projects net sales of $9.50-$9.70 billion. Notably, it delivered net sales of $9.73 billion in 2023.
SpartanNash anticipates an adjusted EBITDA of $255-$270 million, whereas it reported $257 million in 2023.
Adjusted earnings are projected to be $1.85-$2.10 per share, suggesting a dip from the $2.18 per share reported in 2023.
This grocery retailer’s shares have lost 2.7% in the past three months against the industry’s 6.9% rise.
3 Promising Stocks
Some better-ranked stocks are Sprouts Farmers Market, Inc. (SFM - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and American Eagle Outfitters Inc. (AEO - Free Report) .
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year earnings and sales indicates growth of 18.7% and 9.6%, respectively, from the 2023 reported figures. SFM has a trailing four-quarter average earnings surprise of 12%.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. It has a Zacks Rank of 2 (Buy) at present. ANF delivered a 28.9% earnings surprise in the last reported quarter.
The consensus estimate for Abercrombie’s fiscal 2024 earnings and sales indicates growth of 51.1% and 11.5%, respectively, from the fiscal 2023 reported levels. ANF has a trailing four-quarter average earnings surprise of 210.3%.
American Eagle Outfitters is a specialty retailer of casual apparel, accessories and footwear. It currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for American Eagle Outfitters’ fiscal 2024 earnings and sales indicates growth of 17.1% and 3.3%, respectively, from the year-ago actuals. AEO has a trailing four-quarter average earnings surprise of 28.1%.
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SpartanNash (SPTN) Q2 Earnings Top Estimates, Sales Miss
SpartanNash Co. (SPTN - Free Report) delivered second-quarter 2024 results, wherein the top line missed the Zacks Consensus Estimate, whereas the bottom line beat the same. Both metrics declined year over year.
However, SpartanNash's execution of transformational initiatives has created a foundation for growth while contributing to year-to-date margin gains. The progression of investments in margin-enhancing programs is pleasing, with expected benefits by the end of 2024.
Building on this progress, a Customer Value Proposition initiative is being piloted, informed by extensive shopper data and insights, aimed at enhancing freshness, value and convenience. As part of this store modernization program, prices on 6,000 products are being lowered to bring more value to shoppers.
SpartanNash Company Price, Consensus and EPS Surprise
SpartanNash Company price-consensus-eps-surprise-chart | SpartanNash Company Quote
Q2 in Detail
The Zacks Rank #3 (Hold) company posted adjusted earnings from continuing operations of 59 cents per share in the second quarter, down 9.2% from adjusted earnings of 65 cents in the year-ago quarter. The metric surpassed the Zacks Consensus Estimate of 52 cents.
Consolidated net sales were $2,230.8 million, down 3.5% year over year. Also, the top line missed the Zacks Consensus Estimate of $2,263 million. The decline in the year-over-year performance was driven by reduced volumes in the Wholesale and Retail segments.
Gross profit rose 0.2% year over year to $353 million. The decrease resulted from reduced cost of sales. We note that the gross margin expanded 60 basis points (bps) to 15.8% from the prior-year period.
Selling, general and administrative expenses declined 0.2% year over year to $318.2 million. As a percentage of net revenues, selling, general and administrative expenses expanded 50 bps to 14.3% in the first quarter of 2024.
Adjusted EBITDA was down 2.4% year over year to $64.5 million compared with $66.1 million in the year-ago period. We note that the adjusted EBITDA margin was 2.9%, flat year over year in the quarter under review.
Image Source: Zacks Investment Research
Segmental Details
The wholesale segment’s net sales declined 4.8% year over year to $1.55 billion. This was primarily attributed to lower volume in the national accounts customer channel.
Retail’s net sales decreased 0.4% year over year to $676.1 million in the reported quarter. Also, comparable store sales in the retail sector declined 2.5% year over year. Additional sales from the recently acquired Metcalfe's Market stores were counterbalanced by a decrease in consumer demand.
Other Financials
SpartanNash ended the quarter with cash and cash equivalents of $25.2 million, long-term debt and finance lease liabilities of $586.4 million, and a total shareholders’ equity of $776.3 million.
As of Jul 13, 2024, cash generated from operating activities grew 166% year over year, reaching $132.1 million from $49.7 million primarily due to ongoing working capital management initiatives. Capital expenditure and IT capital totaled $73.4 million in the same period. For 2024, management projects capital expenditure and IT capital of $135-$145 million.
Additionally, $30.4 million was returned to shareholders through $15.1 million in share repurchases and $15.4 million in dividends.
2024 Outlook
SpartanNash is making significant strides toward reaching its long-term strategic objectives, with a keen focus on enhancing value for customers and achieving additional cost efficiencies through transformative initiatives.
Management projects net sales of $9.50-$9.70 billion. Notably, it delivered net sales of $9.73 billion in 2023.
SpartanNash anticipates an adjusted EBITDA of $255-$270 million, whereas it reported $257 million in 2023.
Adjusted earnings are projected to be $1.85-$2.10 per share, suggesting a dip from the $2.18 per share reported in 2023.
This grocery retailer’s shares have lost 2.7% in the past three months against the industry’s 6.9% rise.
3 Promising Stocks
Some better-ranked stocks are Sprouts Farmers Market, Inc. (SFM - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and American Eagle Outfitters Inc. (AEO - Free Report) .
Sprouts Farmers operates in a highly fragmented grocery store industry. The company currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year earnings and sales indicates growth of 18.7% and 9.6%, respectively, from the 2023 reported figures. SFM has a trailing four-quarter average earnings surprise of 12%.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. It has a Zacks Rank of 2 (Buy) at present. ANF delivered a 28.9% earnings surprise in the last reported quarter.
The consensus estimate for Abercrombie’s fiscal 2024 earnings and sales indicates growth of 51.1% and 11.5%, respectively, from the fiscal 2023 reported levels. ANF has a trailing four-quarter average earnings surprise of 210.3%.
American Eagle Outfitters is a specialty retailer of casual apparel, accessories and footwear. It currently has a Zacks Rank of 2.
The Zacks Consensus Estimate for American Eagle Outfitters’ fiscal 2024 earnings and sales indicates growth of 17.1% and 3.3%, respectively, from the year-ago actuals. AEO has a trailing four-quarter average earnings surprise of 28.1%.