SpartanNash has increased its full-year financial guidance for 2022 after fast-rising food prices and share gains in its retail segment drove strong second-quarter results, the grocery distributor and supermarket operator announced Thursday.
The company now projects comparable sales growth for the year will fall between 4% and 7%, up from the range of 1% to 3% it previously expected. SpartanNash also said it expects net sales and adjusted EBITDA for 2022 to be higher than it had earlier projected.
For the quarter, SpartanNash reported net sales of $2.3 billion across its three operating segments, which include military commissaries and food-distribution operations in addition to supermarkets. The figure was up 7.9% compared with the same period last year, according to the company.
SpartanNash also saw adjusted EBITDA rise 13.7% year-over-year in Q2, to $61.8 million, even as quarterly net earnings fell to $5.1 million, down from $16.8 million during the second quarter of 2021.
Speaking during an earnings call Thursday, SpartanNash President and CEO Tony Sarsam said the company achieved cost savings during Q2 stemming from its ongoing effort to improve how it handles its supply chain.
Meanwhile, the company has launched an effort to transform its merchandising operations as it looks to deal with inflation, Sarsam said, noting that the company will focus on automating promotions and pricing as part of the program.
SpartanNash is seeing price increases come in at a rate of 40,000 to 50,000 per year, but its systems are set up to manage just 8,000 to 10,000 price bumps annually, Sarsam said.
Sarsam said SpartanNash has had fruitful negotiations with vendors as it looks to head off price increases. “I think they understand the pressures that everybody in the industry and the end user, the consumer is feeling … we’re early into it, but I would say that the receptivity to finding a way has been really encouraging,” he said.
The earnings report represents the first quarterly financial metrics SpartanNash has released since shareholders voted in June to reject an effort by a group of activist investors to reshape the company’s board of directors against the company’s wishes. Those investors, led by Macellum Advisors and Ancora Holdings Group, had claimed SpartanNash did not have “any clear strategy for value creation” and needed new leadership as a result.
“We’ve seen really good momentum, we feel good about where we’re at, and we want to continue to build on that momentum and really, frankly, build long-term shareholder value creation with programs like this merchandising transformation, and we’re investing for that long-term gain this year, but we feel good about the opportunity and the progress,” SpartanNash Executive Vice President and Chief Financial Officer Jason Monaco said during the earnings call.