SpartanNash Profit Tops Estimate

(RTTNews) - Food distributor SpartanNash Co (SPTN), Wednesday reported a better-than-expected climb in first-quarter profit as sales nearly tripled, due mainly to the November merger with Nash Finch. Quarterly earnings topped Wall Street estimates, while revenues were in line with expectations.

Moving forward, SpartanNash expects second-quarter earnings to be at par or slightly below last year's level, adding that the weather and Easter timing induced sales benefits from the recent quarter will not be replicated in the current quarter.

SpartanNash also reaffirmed its expectations for fiscal 2014, even as it warned of soft consumer sentiment.

Spartan Stores and Nash Finch completed their about $1.3 billion merger in November 2013. Nash contributed about $1.5 billion in sales for the first quarter and Spartan benefited from comparable store sales of 2.5 percent and new business gains in the food distribution segment. Also sales benefited from the later timing of the Easter holiday.

Grand Rapids, Michigan-based SpartanNash posted first-quarter net earnings of $12.3 million, compared with $8.6 million last year. On a per share basis, earnings dropped to $0.33 from $0.40 last year, owing to a higher share count.

Excluding items, adjusted earnings for the quarter were $15.2 million or $0.40 per share, compared with $11.4 million or $0.52 per share a year ago.

On average, four analysts polled by Thomson Reuters expected earnings of $0.38 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter surged to $2.3 billion from $780.3 million in the prior year. Analysts expected sales of $2.3 billion for the quarter.

Gross margin slipped to 15 percent from 22 percent in the prior year, due to the change in mix of sales, the impact of low inflation and a LIFO charge.

Operating expenses for the quarter climbed to $321.4 million from $150.6 million a year ago, partly due to merger related costs.

For the second quarter, SpartanNash projects earnings from continuing operations will be at or slightly below last year's $0.46 per share, excluding one-time expenses. Analysts currently expect earnings of $0.43 per share.

For fiscal 2014, SpartanNash still projects earnings of $1.65 to $1.75 per share and sales of $7.90 billion to $8.04 billion. Analysts currently expect earnings of $1.74 per share on revenues of $7.88 billion.

SpartanNash stock closed Wednesday at $21.69, up $0.16 or 0.74%, on a volume of 112k shares on the Nasdaq. In after hours, the stock gained $0.72 or 3.32% at $22.41.