Smart & Final Surge 8% As Q4 Results Top Estimates, Issues Rosy Outlook

(RTTNews) - Shares of Smart & Final Stores, Inc. (SFS), which made their market debut in late September, surged more than eight percent in extended trading on Wednesday after the value-oriented food retailer reported results for the fourth quarter that topped analysts' expectations, and provided adjusted earnings guidance for the full-year 2015, above Street view.

The company also reported a profit for the quarter compared to a loss last year, reflecting lower charges, improved margins and double-digit sales growth. Comparable store sales also increased 7.8 percent.

"Performance across both the Smart & Final and Cash & Carry store banners was strong, driven by our ongoing merchandising and marketing efforts and consistent store level execution. Smart & Final Extra! continues to be the key to our new store growth,....," President and CEO Dave Hirz said in a statement.

The Commerce, California-based company reported net earnings of $9.27 million or $0.12 per share for the fourth quarter, compared to a net loss of $6.99 million or $0.12 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter was $12.33 million or $0.16 per share, compared to $8.20 million or $0.14 per share in the year-ago quarter.

On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.11 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 13 percent to $839.34 million from $742.80 million in the same quarter last year, and topped five Wall Street analysts' consensus estimate of $820.5 million.

Comparable store sales for the quarter increased 7.8 percent.

Smart & Final net sales grew 13.5 percent to $644.61 million, with comparable store sales growing 7.0 percent, and Cash & Carry sales improved 11.5 percent to $194.73 million, with comparable store sales growing 10.7 percent from last year.

Gross margin rate for the quarter improved 40 basis points to 14.9 percent from last year's 14.5 percent.

Looking ahead to fiscal 2015, the company expects adjusted earnings in a range of $0.67 to $0.70 per share, on projected sales growth of 11 to 12 percent and comparable store sales growth of 3.5 to 4.5 percent.

Street is currently looking for full-year 2015 earnings of $0.63 per share on sales growth of 12.2 percent to $3.94 billion.

The company also expects to open four new Smart & Final Extra! Stores in the first quarter. It also expects to open a total of 20 new Smart & Final Extra! stores, complete nine conversions of legacy stores to the Extra! format, including three store relocations, and open three Cash & Carry stores, including one store relocation in fiscal 2015.

The company added that it expects the pace of new store openings to be relatively consistent throughout 2015.

"Looking ahead, in 2015 we plan to continue our accelerated pace of new store openings and believe that our strong performance in comparable store sales, competitive positioning, and real estate development pipeline provide the foundation for strong operating and financial performance," Hirz added.

SFS closed Wednesday's regular trading session at $16.61, up $0.01 or 0.06% on a volume of 0.25 million shares. The stock surged a further $1.39 or 8.37% in after-hours trading.