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SpartanNash (SPTN) Q4 Earnings Lag Estimates, Sales Dip Y/Y
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SpartanNash Co. (SPTN - Free Report) 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
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.
Image Source: Zacks Investment Research
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.
2024 Outlook
SpartanNash is making significant strides toward reaching its long-term strategic objectives, with a keen focus on enhancing value for customers and achieving additional cost efficiencies through transformative initiatives.
The company is poised for another year of substantial rise in market share across its Wholesale and Retail divisions in 2024. The foundation for this growth is enabling SpartanNash to explore growth opportunities both organically and through strategic acquisitions.
Management projects net sales of $9,700-$9,900 million. Notably, it delivered net sales of $9,729 million in 2023.
SpartanNash is anticipating adjusted EBITDA of $255-$270 million, whereas it reported $257 million in 2023.
Adjusted earnings are projected to be $1.85-$2.10 per share, down from the $2.18 per share reported in 2023.
This grocery retailer’s stock movement shows that its shares have lost 6% in the past three months against the industry’s 17% rise.
3 Promising Stocks
Some better-ranked stocks from the same space are Casey's General Stores, Inc. (CASY - Free Report) , Sprouts Farmers Market, Inc. (SFM - Free Report) and Target Corporation (TGT - Free Report) .
The Zacks Consensus Estimate for Casey's current fiscal-year earnings and sales indicates growth of 9% and 0.3%, respectively, from the fiscal 2023 reported figures. CASY has a trailing four-quarter average earnings surprise of 17.8%.
Sprouts Farmers operates in a highly fragmented grocery store industry. The company currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year earnings and sales indicates growth of 17.2% and 6.6%, respectively, from the 2022 reported figures. SFM has a trailing four-quarter average earnings surprise of 11.2%.
Target provides an array of goods ranging from household essentials and electronics to toys and apparel. It has a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Target’s current fiscal-year earnings indicates growth of 38.4% from the fiscal 2022 reported figure. TGT has a trailing four-quarter average earnings surprise of 30.8%.
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SpartanNash (SPTN) Q4 Earnings Lag Estimates, Sales Dip Y/Y
SpartanNash Co. (SPTN - Free Report) 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
SpartanNash Company price-consensus-eps-surprise-chart | SpartanNash Company Quote
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.
Image Source: Zacks Investment Research
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.
2024 Outlook
SpartanNash is making significant strides toward reaching its long-term strategic objectives, with a keen focus on enhancing value for customers and achieving additional cost efficiencies through transformative initiatives.
The company is poised for another year of substantial rise in market share across its Wholesale and Retail divisions in 2024. The foundation for this growth is enabling SpartanNash to explore growth opportunities both organically and through strategic acquisitions.
Management projects net sales of $9,700-$9,900 million. Notably, it delivered net sales of $9,729 million in 2023.
SpartanNash is anticipating adjusted EBITDA of $255-$270 million, whereas it reported $257 million in 2023.
Adjusted earnings are projected to be $1.85-$2.10 per share, down from the $2.18 per share reported in 2023.
This grocery retailer’s stock movement shows that its shares have lost 6% in the past three months against the industry’s 17% rise.
3 Promising Stocks
Some better-ranked stocks from the same space are Casey's General Stores, Inc. (CASY - Free Report) , Sprouts Farmers Market, Inc. (SFM - Free Report) and Target Corporation (TGT - Free Report) .
Casey's operates convenience stores. It has a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Casey's current fiscal-year earnings and sales indicates growth of 9% and 0.3%, respectively, from the fiscal 2023 reported figures. CASY has a trailing four-quarter average earnings surprise of 17.8%.
Sprouts Farmers operates in a highly fragmented grocery store industry. The company currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year earnings and sales indicates growth of 17.2% and 6.6%, respectively, from the 2022 reported figures. SFM has a trailing four-quarter average earnings surprise of 11.2%.
Target provides an array of goods ranging from household essentials and electronics to toys and apparel. It has a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Target’s current fiscal-year earnings indicates growth of 38.4% from the fiscal 2022 reported figure. TGT has a trailing four-quarter average earnings surprise of 30.8%.