SpartanNash Co. SPTN delivered fourth-quarter 2023 results, wherein the top and bottom lines missed the Zacks Consensus Estimate. While net sales declined year over year, earnings improved.

SpartanNash Company Price, Consensus and EPS Surprise

 

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Q4 in Detail

The Zacks Rank #3 (Hold) company posted adjusted earnings from continuing operations of 35 cents per share in the fourth quarter, up 25% from adjusted earnings of 28 cents in the year-ago quarter. The metric missed the Zacks Consensus Estimate of 38 cents.

Consolidated net sales were $2,245.2 million, down 2.8% year over year. Also, the top line missed the Zacks Consensus Estimate of $2,268 million. The decline in the year-over-year performance was driven by reduced volumes in the Wholesale and Retail segments.

Gross profit fell 0.7% year over year to $339 million. The decrease resulted from reduced unit volumes in both segments. We note that the gross margin expanded 30 basis points (bps) to 15.1% from the prior-year period.

Selling, general and administrative expenses declined 8.1% to $306.5 million. As a percentage of net revenues, selling, general and administrative expenses contracted 70 bps to 13.7% in the fourth quarter of 2023.

Adjusted EBITDA was $53.6 million compared with $47.2 million in the year-ago period. We note that the adjusted EBITDA margin expanded 40 bps to 2.4% in the fourth quarter.

 

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Segmental Details

Net sales at the wholesale segment declined 2% year over year to $1,598.2 million. This was primarily attributed to lower volume in the national accounts customer channel.

Retail’s net sales decreased 4.5% year over year to $647 million in the reported quarter. Also, comparable store sales in the retail sector declined 2.8% year over year. The decrease in net sales was mainly attributed to a decline in food assistance program benefits and a drop in fuel sales.

Other Financials

SpartanNash ended the quarter with cash and cash equivalents of $18 million, long-term debt and finance lease liabilities of $588.7 million, and a total shareholders’ equity of $778.2 million.

Cash generated from operating activities was $89.3 million in 2023. Capital expenditure and IT capital totaled $127.4 million in the same period. For 2024, management projects capital expenditure and IT capital of $135-$145 million.

The company allocated $48.3 million for shareholder returns, comprising $18.6 million in share buybacks and $29.7 million in dividend payments in 2023.