Spartan Sales, Earnings Up
GRAND RAPIDS — Spartan Stores Inc. reported 2007 net sales for the third quarter increased 12.7 percent to $723.5 million from $642.3 million in last year’s third quarter. According to Spartan, net sales increased across both of Spartan’s business segments due primarily to the acquisition of D&W Food Center stores, comparable store sales growth, new distribution business, and pharmacy sales related to the company’s recent purchase of pharmacies within the acquired D&W chain.
Third quarter operating earnings increased 59.5 percent to $13.2 million, up from $8.2 million in the same period last year. Earnings from continuing operations were $6.1 million, up 26.9 percent over the prior year’s third quarter. Net earnings for the quarter increased 75.6 percent to $5.9 million, or 27 cents per diluted share.
“Our third quarter net sales, operating earnings and net earnings are at their highest levels in many years,” noted Spartan Stores Chairman, President and CEO Craig C. Sturken. “We experienced solid sales growth in both our retail supermarket and distribution businesses despite the unseasonable warm winter weather in our northern Michigan markets and a challenging economic environment.”
Operating expenses for the quarter increased to $124.1 million from $107.5 million in the year-ago period. The increase was due primarily to the higher operating costs associated with the acquired retail operations, according to the company.
Quarterly net sales in the distribution segment increased 3.2 percent over last year to $387 million. Third quarter retail net sales increased nearly 26 percent to $336.6 million from $267.3 million in the same period last year.
Consolidated net sales year to date rose 14.1 percent to $1.8 billion from $1.6 billion in the corresponding period last year. Operating earnings for the first three quarters were $37.4 million, an increase of 41.6 percent over the same period in 2006.
Sturken said Spartan’s business strategies are producing solid financial results in spite of the unseasonably warm weather conditions and the softness in the regional economy the company serves.
“We are moving forward to aggressively integrate and improve operations at our D&W Fresh Market stores to bring them up to their performance potential and up to our internal performance standards,” Sturken said.
He said that by the end of this fiscal year, the company expects to complete two D&W Fresh Market store remodels and begin a third. Spartan also expects to start construction on a Family Fare replacement store, the new Family Fare prototype store, which will include 60 percent more retail square feet. Sturken said the company plans to continue seeking acquisition growth opportunities in the Midwest market.