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Spartan Stores earnings up 20.4 percent to $6.5M in 1Q14
Spartan Stores, a regional grocery distributor and retailer based in Grand Rapids, has reported its financial results for the first quarter of FY2014.
Spartan Stores (NASDAQ: SPTN) reported adjusted earnings from continuing operations were $6.5 million, or 30 cents per diluted share, compared to $5.4 million, or 25 cents, last year.
Consolidated net sales for the quarter increased to $612.4 million, compared to $603.9 million last year.
The company noted that first quarter sales were reduced by the Easter holiday week falling in the 4Q13 and unfavorable weather conditions, as compared to the first quarter of fiscal 2013.
Gross profit for the first quarter was 20.5 percent, compared to 20.2 percent in the first quarter of the prior year. The gross profit margin rate increase reflects an improved performance in the company’s retail segment, driven primarily by the cycling of the launch of the price-freeze campaign in the prior year.
“Our adjusted earnings from continuing operations exceeded our guidance, and we generated increased cash flow from operations for the quarter, driven by an operating margin improvement in our retail segment,” stated Dennis Eidson, Spartan’s president and CEO. “We benefited from the acquisition of a retail store late in the prior year third quarter, new customer gains, the growing traction of our Yes Rewards loyalty program and increased fuel sales, as well as our continued disciplined expense management. We continue to refine our promotion and loyalty programs and to introduce new private brand products to provide even more value to our retail and distribution customers in today’s economy.”
Adjusted earnings from continuing operations in the first quarter excludes after-tax professional fees and expenses of $1.1 million (5 cents per share) related to the merger with Minneapolis-based Nash Finch Co., which will expand Spartan's distribution area.
“We remain confident in the plans we have in place to deliver our sales and earnings outlook for fiscal 2014, including investing in the consumer experience, increasing our remodeling efforts, introducing new private brand products and improving productivity across our operations,” said Eidson. “During the second quarter, we plan to complete four minor remodels, one major remodel and to open one new Valu Land store in the Lansing market.”
Nash Finch merger and “synergies”
“Additionally, we continue to focus on our integration plan for our recently announced merger with Nash Finch,” Eidson said. “As you know, we are a very disciplined organization, and the integration will be a critical priority for us.
“I am confident in the realization of the $50 million in anticipated cost synergies from this transaction, which were vetted by both organizations,” he said. “These synergies, along with the strategic opportunities provided by the combined organization and the future flexible financial structure, will allow the combined entity to execute our strategic vision and deliver continued value to associates, shareholders and other partners.”