BYRON CENTER — The latest earnings report from SpartanNash Co. reflects a surge in demand for food distribution and retail throughout 2020 and the COVID-19 pandemic.
The nationwide food distributor and grocery store retailer on Wednesday announced results for its fourth quarter and fiscal year ended Jan. 2, each of which consisted of one extra week.
SpartanNash (Nasdaq: SPTN) finished a touch-and-go 2020 with $9.35 billion in net sales, a 9.5 increase from 2019. The extra week contributed $158.9 million to the total.
Retail comparable store sales were at 13.1 percent for the year while the company delivered $2.53 in earnings per share compared to $1.10 the year prior.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for fiscal year 2020 was $239.1 million, or 2.6 percent of net sales, compared to $177.9 million, 2.1 percent of net sales, in 2019.
“Despite the continued challenges presented by COVID-19 in the fourth quarter, I am proud of our team’s performance,” SpartanNash president and CEO Tony Sarsam said in a statement. “Since the beginning of the pandemic almost one year ago, they have remained dedicated to ensuring customer and associate safety, while providing essential services to our local communities.”
SpartanNash recorded $2.25 billion in net sales in the fourth quarter, a 12.5-percent year-over-year increase that was attributed to continued growth with existing food distribution clients.
Pandemic-related shutdown orders in Michigan and elsewhere in the country closed or limited restaurants and other facilities, bolstering the demand for food from stores.
Net sales for SpartanNash’s food distribution operation increased to $1.11 billion in the fourth quarter, which was up 17.8 percent from the same quarter during 2019. Similarly, SpartanNash’s retail segment increased by $79.4 million from the same quarter last year, totaling $548 million in net sales.
SpartanNash also provides military food distribution, a segment that has been hampered by the pandemic and its restrictions. Net sales climbed to $514.1 million for the fourth quarter, a 0.6 percent tick up from the same quarter last year.
As the country looks to restore normalcy in 2021, SpartanNash is expecting demand to pull back.
The company forecasts retail comparable sales will dip 7 to 9 percent in the first quarter, with fiscal year 2021 comparable sales of negative 6 to 8 percent. Also, food distribution sales are expected to decline 1 to 3 percent in fiscal year 2021, while military distribution sales are expected to drop 3 to 5 percent in 2021.
“Fiscal 2021 will present a new environment where we expect to see a change in consumer behavior,” Sarsam said. “While we expect this may create softness in our industry as a whole, we will look to retain our customer base which has grown during the pandemic. We will also shift our focus to prioritize investments into our future.”
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