Delivers Fiscal 2023 Growth in Net Earnings of 51% and Adjusted EBITDA(1) of 6%
Provides Fiscal 2024 Outlook
GRAND RAPIDS, Mich., Feb. 15, 2024 /PRNewswire/ — Food solutions company SpartanNash (the “Company”) (NASDAQ:SPTN) today reported financial results for its 12-week fourth quarter and 52-week fiscal year ended Dec. 30, 2023.
“Our team is proud of another strong year in which we have demonstrated year-over-year growth, delivered record profitability, and performed in line with our expectations, all in spite of a challenging macroeconomic environment,” said SpartanNash President and CEO Tony Sarsam. “We are on track to achieve the objectives in our long-term strategic plan as we focus on creating enhanced customer value and capturing additional cost savings from our transformational initiatives. We expect 2024 to be another pivotal year of market share growth in our Wholesale and Retail segments. Our talented Associates have built a strong foundation for us to pursue both organic and inorganic opportunities.”
Fourth Quarter Highlights(2)
Net sales decreased 2.8% to $2.25 billion, driven by lower volumes in both the Wholesale and Retail segments.
Wholesale segment net sales decreased 2.0% to $1.60 billion due primarily to lower volume in the national accounts customer channel.
Retail segment net sales decreased 4.5% to $647.0 million, with comparable store sales down 2.8%. The net sales decrease was primarily driven by a reduction in food assistance program benefits and lower fuel sales.
Net earnings of $0.30 per diluted share, compared to $0.02 per diluted share in the prior year.
The increase was primarily due to a higher gross profit rate and lower incentive compensation. This favorability was partially offset by lower unit volumes and an increase in restructuring and asset impairment charges.
Adjusted EPS(3) of $0.35, compared to $0.28 in the prior year. Adjusted EBITDA(1) of $53.6 million, compared to $47.2 million in the prior year.
These measures exclude, among other items, the impact of the LIFO provision and restructuring and asset impairment charges.
Fiscal 2023 Highlights(4)
Net sales increased 0.9% to $9.73 billion.
Wholesale net sales increased 1.1% to $6.92 billion.
Retail increased 0.4% to $2.81 billion, with a comparable store sales increase of 2.0%.
Net earnings of $1.50 per diluted share increased compared to $0.95 per diluted share.
Adjusted EPS(3) of $2.18 decreased from $2.33. Adjusted EBITDA(1) of $257.4 million increased from $242.9 million.
Cash generated from operating activities of $89.3 million decreased from $110.4 million.
Net long-term debt(5) to adjusted EBITDA(1) ratio of 2.3x at year end increased sequentially compared to 2.1x at the end of the third quarter.
Capital expenditures and IT capital(6) of $127.4 million increased compared to $102.1 million.
Returned $48.3 million to shareholders through $18.6 million in share repurchases and $29.7 million in dividends compared to $62.2 million returned to shareholders in the prior year.
(1)
A reconciliation of net earnings to adjusted EBITDA, a non-GAAP financial measure, is provided in Table 2.
(2)
All comparisons are for the fourth quarter of 2023 compared with the fourth quarter of 2022, unless otherwise noted.
(3)
A reconciliation of net earnings to adjusted earnings from continuing operations, as well as per diluted share (“adjusted EPS”), a non-GAAP financial measure, is provided in Table 3.
(4)
All comparisons are for the fiscal year 2023 compared with the fiscal year 2022, unless otherwise noted.
(5)
A reconciliation of long-term debt and finance lease obligations to net long-term debt, a non-GAAP financial measure, is provided in Table 4.
(6)
A reconciliation of purchases of property and equipment to capital expenditures and IT capital, a non-GAAP financial measure, is provided in Table 5.
Fiscal 2024 Outlook
The following table provides the Company’s guidance for fiscal 2024:
Fiscal 2023
Fiscal 2024 Outlook
(In millions, except adjusted EPS(3))
Actual
Low
High
Total net sales
$
9,729
$
9,700
$
9,900
Adjusted EBITDA(1)
$
257
$
255
$
270
Adjusted EPS(3)
$
2.18
$
1.85
$
2.10
Capital expenditures and IT capital(6)
$
127
$
135
$
145
Guidance incorporates the Company’s long-term strategic initiatives, including all transformational programs and tuck-in acquisitions.
Conference Call & Supplemental Earnings Presentation
The Company will host a conference call to discuss its quarterly results with additional comments and details on Thursday, February 15, 2024, at 8:30 a.m. ET. There will also be a simultaneous, live webcast made available at SpartanNash’s website at www.spartannash.com/webcasts under the “Investor Relations” section and will remain archived on the Company’s website through Thursday, February 29, 2024.
A supplemental quarterly earnings presentation will also be available on the Company’s website at www.spartannash.com/investor-presentations.
About SpartanNash
SpartanNash (NASDAQ:SPTN) is a food solutions company that delivers the ingredients for a better life. Committed to fostering a People First culture, the SpartanNash family of Associates is approximately 17,000 strong. SpartanNash operates two complementary business segments – food wholesale and grocery retail. Its global supply chain network serves wholesale customers that include independent and chain grocers, national retail brands, e-commerce platforms, and U.S. military commissaries and exchanges. The Company distributes products for every aisle in the grocery store, from fresh produce to household goods to its OwnBrands, which include the Our Family® portfolio of products. On the retail side, SpartanNash operates 144 brick-and-mortar grocery stores, primarily under the banners of Family Fare, Martin’s Super Markets and D&W Fresh Market, in addition to dozens of pharmacies and fuel centers. Leveraging insights and solutions across its segments, SpartanNash offers a full suite of support services for independent grocers. For more information, visit spartannash.com.
Forward-Looking Statements
The matters discussed in this press release and in the Company’s website-accessible conference calls with analysts and investor presentations include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), about the plans, strategies, objectives, goals or expectations of the Company. These forward-looking statements may be identifiable by words or phrases indicating that the Company or management “expects,” “projects,” “anticipates,” “plans,” “believes,” “intends,” or “estimates,” or that a particular occurrence or event “may,” “could,” “should,” “will” or “will likely” result, occur or be pursued or “continue” in the future, that the “outlook,” “trend,” “guidance” or “target” is toward a particular result or occurrence, that a development is an “opportunity,” “priority,” “strategy,” “focus,” that the Company is “positioned” for a particular result, or similarly stated expectations. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date made. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies may affect actual results and could cause actual results to differ materially. These risks and uncertainties include the Company’s ability to compete in an extremely competitive industry; the Company’s dependence on certain major customers; the Company’s ability to implement its growth strategy and transformation initiatives; the Company’s ability to implement its growth strategy through acquisitions and successfully integrate acquired businesses; disruptions to the Company’s information security network, including security breaches and cyber-attacks; impacts to the availability and performance of the Company’s information technology systems; changes in relationships with the Company’s vendor base; changes in product availability and product pricing from vendors; macroeconomic uncertainty, including rising inflation, potential economic recession, and increasing interest rates; difficulty attracting and retaining well-qualified Associates and effectively managing increased labor costs; failure to successfully retain or manage transitions with executive leaders and other key personnel; impacts to the Company’s business and reputation due to an increasing focus on environmental, social and governance matters; customers to whom the Company extends credit or for whom the Company guarantees loans may fail to repay the Company; changes in the geopolitical conditions; disruptions associated with severe weather conditions and natural disasters, including effects from climate change; disruptions associated with disease outbreaks; the Company’s ability to manage its private brand program for U.S. military commissaries, including the termination of the program or not achieving the desired results; impairment charges for goodwill or other long-lived assets; the Company’s level of indebtedness; interest rate fluctuations; the Company’s ability to service its debt and to comply with debt covenants; changes in government regulations; labor relations issues; changes in the military commissary system, including its supply chain, or in the level of governmental funding; product recalls and other product-related safety concerns; cost increases related to multi-employer pension plans; and other risks and uncertainties listed under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Annual Report on Form 10-K and in subsequent filings with the Securities and Exchange Commission. Additional risks and uncertainties not currently known to the Company or that the Company currently believes are immaterial also may impair its business, operations, liquidity, financial condition and prospects. The Company undertakes no obligation to update or revise its forward-looking statements to reflect developments that occur or information obtained after the date of this press release.
INVESTOR CONTACT:
Kayleigh Campbell
Head of Investor Relations
kayleigh.campbell@spartannash.com
MEDIA CONTACT:
Adrienne Chance
SVP, Communications
press@spartannash.com
SPARTANNASH COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
12 Weeks Ended
52 Weeks Ended
December 30,
December 31,
December 30,
December 31,
(In thousands, except per share amounts)
2023
2022
2023
2022
Net sales
$
2,245,183
$
2,309,040
$
9,729,219
$
9,643,100
Cost of sales
1,906,214
1,967,601
8,243,663
8,145,625
Gross profit
338,969
341,439
1,485,556
1,497,475
Operating expenses
Selling, general and administrative
306,451
333,361
1,366,238
1,427,783
Acquisition and integration, net
1,157
245
3,416
343
Restructuring and asset impairment, net
7,819
(933)
9,190
805
Total operating expenses
315,427
332,673
1,378,844
1,428,931
Operating earnings
23,542
8,766
106,712
68,544
Other expenses and (income)
Interest expense, net
9,669
8,027
39,887
22,791
Other, net
(790)
(778)
(3,300)
(1,162)
Total other expenses, net
8,879
7,249
36,587
21,629
Earnings before income taxes
14,663
1,517
70,125
46,915
Income tax expense
4,358
867
17,888
12,397
Net earnings
$
10,305
$
650
$
52,237
$
34,518
Net earnings per basic common share
$
0.30
$
0.02
$
1.53
$
0.98
Net earnings per diluted common share
$
0.30
$
0.02
$
1.50
$
0.95
Weighted average shares outstanding:
Basic
34,039
34,732
34,211
35,279
Diluted
34,670
35,866
34,901
36,313
SPARTANNASH COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 30,
December 31,
(In thousands)
2023
2022
Assets
Current assets
Cash and cash equivalents
$
17,964
$
29,086
Accounts and notes receivable, net
421,859
404,016
Inventories, net
575,226
571,065
Prepaid expenses and other current assets
62,440
62,244
Total current assets
1,077,489
1,066,411
Property and equipment, net
649,071
610,220
Goodwill
182,160
182,160
Intangible assets, net
101,535
106,341
Operating lease assets
242,146
257,047
Other assets, net
103,174
84,382
Total assets
$
2,355,575
$
2,306,561
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable
$
473,419
$
487,215
Accrued payroll and benefits
78,076
103,048
Other accrued expenses
57,609
62,465
Current portion of operating lease liabilities
41,979
45,453
Current portion of long-term debt and finance lease liabilities
8,813
6,789
Total current liabilities
659,896
704,970
Long-term liabilities