SpartanNash's crystal ball for the start of 2021 has proved accurate: The Grand Rapids, Mich.-based grocery retailer and wholesaler saw retail comparable-store sales decline by 7% in its first fiscal quarter, in line with the company's projections back in February of a 7% to 9% slide.
Consumers' stock-up buying at the start of the pandemic a year ago made for tough-to-beat sales figures, the company stated in its first-quarter earnings release, issued after the close of trading June 2. Over a two-year period, comp-store sales were up 9.3%, the company noted.
In addition, SpartanNash's gross-profit margin improved to 15.7% of net sales in this year's quarter from 14.8% in the year-ago period. All three of SpartanNash's business segments—retail, wholesale and military—saw profit-margin improvements.
Overall, net sales were down 7% year over year to $2.66 billion from $2.86 billion. The company reported earnings per share of 54 cents and adjusted EPS of 56 cents.
"While this was a transitional quarter for SpartanNash, our overall profitability was consistent with our expectations to start the year," said SpartanNash President and CEO Tony Sarsam, who took the reins at the company in September. "We made meaningful progress against our key initiatives for 2021, including improvements in gross margin, service levels, our Own Brands offering, and associate safety and retention."
Expenses as a rate of sales were up compared with the year-ago period—14.6% of net sales in the first fiscal quarter of 2021 vs. 14.1% a year ago, which SpartanNash attributed in part to higher supply-chain expenses in the food distribution and military channels, as well as an increase in corporate administrative expenses.
SpartanNash has made several leadership moves since Sarsam took over in September, most recently appointing Douglas Hacker as board chairman to replace the retiring Dennis Eidson. Sarsam has also brought in a couple of former colleagues from Borden Dairy to fill key roles; in the past nine months, SpartanNash has named three new executives and six new VPs.
In a news release, the company said it is in the planning phase of a supply-chain improvement initiative targeting operations across its segments that is expected to begin in the second quarter. SpartanNash affirmed its full-year outlook, including adjusted EPS of $1.65 to $1.80 per diluted share.