SpartanNash Q2 Results: Sales Up Amid Favorable Inflation Trends, Sees $20M Cost Savings Ahead

SpartanNash Company SPTN reported second-quarter FY23 sales growth of 1.7% year-on-year to $2.31 billion, missing the consensus of $2.36 billion.

Adjusted EPS of $0.65 came in line with the consensus.

The company attributed the increase to sales growth in both the Wholesale and Retail segments, favorably impacted by inflation trends.

Retail comparable sales increased 3.9%Y/Y.

Gross margin contracted 40 basis points to 15.2% due to lower inflation-related price change benefits in the Wholesale segment compared to elevated levels in the prior year.

Adjusted EBITDA increased to $66.1 million, compared to $61.8 million in the prior year quarter, due to the sales, gross profit, and expense year-over-year trends mentioned above.

The company exited the quarter with $16.91 million in cash and equivalents.

Long-Term Plan

Over the past several months, the company developed a refreshed go-to-market plan, which is being implemented in the third quarter of fiscal 2023.

In connection with these changes, the company expects to realize approximately $20 million in run-rate cost savings in late 2023.

Outlook: SpartanNash reduces FY23 total net sales outlook from $9.90 billion-$10.20 billion to $9.65 billion-$9.95 billion (Consensus: $10.01 billion).

SpartanNash reiterates FY23 adjusted EPS outlook of $2.20-$2.35 (Consensus: $2.25).

Price Action: SPTN shares traded higher by 1.05% at $23.10 premarket on the last check Thursday.

Now Read: Why CVS Health Stock Is Tumbling Thursday

Photo: Shutterstock