New Business Sparks Spartan Q2 Gains
GRAND RAPIDS, Mich. — Spartan Stores here on Wednesday said new customers and organic sales growth contributed to increased sales for the fiscal second quarter, while net earnings were down slightly.
Consolidated net sales for the period, which ended Sept. 14, increased 4.5% to $ 649.5 million, boosted in part by contributions from a recent acquisition in the retail segment and new customers in the distribution segment. The sales increase reflected a 4.7% increase in distribution sales of $ 271.4 million; and retail sales of $ 378.1 million, a 4.4% increase. Retail same-store sales, excluding fuel, increased by 0.2%.
Net earnings for the period of $ 10.1 million decreased by 1.9%. Adjusted earnings from continuing operations totaled $ 12.1 million, which was ahead of the company’s forecast, Dennis Eidson, chief executive officer, said in a statement. Adjusted earnings account for merger expenses associated with Spartan’s pending acquisition of Nash Finch; and an asset impairment charge taken in the second quarter last year.
Read more: Spartan-Nash Finch Deal Clears FTC
“Despite a lack of meaningful food inflation, we posted top- and bottom-line gains in both our retail and distribution segments due to strong execution across our business segments, the effectiveness of our promotion programs and focus on cost control,” Eidson said. “We will continue to invest in the consumer experience to ensure a broad assortment of brand name and private brand products and encourage sales in our retail and distribution channels.”
Gross profit margin for the quarter was flat compared to the second quarter of the prior year at 21%. The gross profit margin reflects modest inflation in distribution segment and improved fuel margins.
During the second quarter, the company opened one Valu Land store, completed five minor remodels and store re-banners and acquired one pharmacy, ending the quarter with 102 corporate stores and 30 fuel centers.
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