Why Grocery Store Retailer SpartanNash's Shares Are Plunging Today

SpartanNash Company SPTN reported a third-quarter FY23 sales decline of 1.4% year-on-year to $2.264 billion, missing the consensus of $2.298 billion. Retail comparable sales increased 1.2%Y/Y.

The company attributed the decrease in sales to declines in both the Wholesale and Retail segments, which were unfavorably impacted by a reduction in volume, partially offset by higher pricing from inflationary trends.

Adjusted EPS of $0.54 missed the consensus of $0.59.

Gross margin expanded to 15.35% from 15.29% in 3Q22, with a gross profit of $347.5 million (-1% Y/Y).

Adjusted EBITDA increased 6.3% Y/Y to $60.88 million, and margin expanded by 20 bps to 2.7%.

SPTN generated cash from operating activities year-to-date of $95.7 million compared to $7.5 million prior year.

The company returned $40.9 million to shareholders during YTD in FY23 through $18.5 million in share repurchases and $22.4 million in dividends.

The company exited the quarter with $17.55 million in cash and equivalents.

FY23 Outlook, narrowed: SpartanNash revised its revenue outlook to $9.65 billion-$9.85 billion (prior $9.65 billion-$9.95 billion) vs. consensus of $9.85 billion.

The company now sees FY23 Adjusted EPS of $2.20 - $2.28 (prior $2.20 - $2.35) vs. consensus of $2.26.

Price Action: SPTN shares are trading lower by 10.79% at $20.84 on the last check Wednesday.