SPTN - Earnings call transcript Q4 2021

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Operator

Good day and welcome to the SpartanNash Company's Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the call over to Chris Mandeville, Investor Relations. ahead. go Please

Chris Mandeville

welcome fiscal and SpartanNash fourth Company Good XXXX to earnings and year conference quarter morning the call.

and and On a.m. the Chief Vice Monaco. Sarsam and release everyone the X:XX should was are company Officer, have President By Executive access now, call today approximately Executive issued from Officer, this Eastern the at Chief time. Jason Financial earnings to President which Tony morning

visit available supplemental SpartanNash's the of release well earnings earnings call presentation, company's being approximately replay please company's at For and a copy for is website as as days. This on www.spartannash.com/investors. a the website XX recorded will the be

Before will like would include today's a we number statements. the discussion that of company to remind begin, forward-looking you

from the company's a the as number statements. useful as If to these you of underlying that, non-GAAP forward-looking on SpartanNash financial now references materially in this a included could statements. factors trends to believes make over will with it's The release it morning measures Tony. or full call the differ turn undertakes financial growth the most revise no will to my these and the has perspective of see business SEC the from GAAP to And company refer the also investors filings, measures. provide earnings discussion you to these measures of pleasure comparable company a non-GAAP will of actual results with The measures. cause reconciliation to most that forward-looking release well company's to update remember recent earnings Please obligation SpartanNash's

Tony Sarsam

good XXXX you and SpartanNash's strategy. morning look and ahead I'm everyone. you, review with our excited today XXXX to performance Thank to Chris

a about high the year First let's talk level. at

serve of our COVID. way almost As to associates two into Yes, nature executed customers continuously pandemic. ensure were Through we person has military administered shells to by open, we variants, and of are needed. stores their efforts. some in healthy. the keeping safely by that we've Despite impacted and been ensured with Every vaccines. had it's over SpartanNash critical delivered medication the of excellence had and pharmacies, I'm again XXX,XXX our was heroes remained that our XXXX. unpredictable incredibly communities patients full COVID Today our access supplies stocked, they associates products the that testing in today, years our proud were our

the the Our $X.X revenues basis, consolidated start we bottom have with a of for per and in guidance $XX XXXX On net the in throughout. and top billion share. generated provided year diluted are adjusted of or results at squarely line and we reaffirmed $X.XX million earnings

reinvesting $XXX and long-term million of cash growth the while support paid leverage. debt flow future over We $XX in our did also of We this to efficiencies. to down business million driving and from greater improve significantly generated operations

retail Our our strong comps and shareholders million performance, to line quarter in X.X%. over our the fourth on cash briefly segments' top dividends flow also enabled of of repurchases. $XX Touching us stock segment X-year to with form grew return

food we've in results. increased Despite labor at execute acute home the continued strength store We see challenges, drove consumption at have well continued to which stores remarkably and the to traffic.

We industry-wide and distribution which increases and net chain we will particular, In labor food supply had the our long-term company position transformation improved focused navigate impact success. profitability the segments, on to our minimal through supply remain price continue initiative and Lastly, slight for consumption. military we pressures. on our in believe chain

inflation tailwinds, including some which margin increases gross have seeing improved rates. food our are We

I performance priorities. our driving have Since despite year operating growth the made progress top executing change returns. our in now we model I'd as with shareholder and line late through strategic to we're profitable steep to we happy to XXXX, So met our demand, and turn like facing comparisons very our focused XXXX objectives. and XXXX profitability COVID to culture the grew on enhance in against during joining strategy, company our

past team. and strategy communications. in supply legal, welcomed executives leadership strengthen We Over the marketing, merchandising, we've our new to year, continued chain,

us Last additions establish call Our two stewardship strategic our for time Morgan, winning Marketing identity include than Amy continue X,XXX our sets identity will new XXXX, most Bennett which Merchandising vendors we and to partners associates, engaged we McClellan, recent And more Chief of our our a this and recipe. guide new use year, going corporate into and resources. growth SpartanNash. management This that Officer customers, and direction of identity team to the new Chief have Officer. the we help

This Our new will life. mission mission we our expresses the customers. lives deliver better make a ingredients the difference the in for is of to

three are: insights call We and innovative insights inform take And culture; We the people there and company. to strategic a by solutions few good solutions. product elevating our will which I strategic acting earnings by capabilities four, solutions. day; signature first the detail. strength will these most our launching customer-focused, last optimize now made one, introduced five priorities. core a I chain; to be core and these discuss operational people, capabilities get in two, transforming those that capabilities, five the to these refining supply our priorities number innovative and food in strategic excellence three promises to customers customer-centric is execution our drive portfolios; minutes investing on in five, to more on the three, priorities creating win customer

for a use benefits We off. time their the entry made to announced provides Last by creating and greater XX% pay roles benefits, safety, we our all in become with associate eligible a wages, into flexibility average an let's over in experience of culture. they for year, which how policy recognition time that We enhance provided dive and communication. So paid retail in our investing priority first for associates time to strategic level supply chain. length and new increases we great strides is of off people-first shortened associates

our We chain have by programs and injury rate we new made improving and safety dramatic retail training XX%. improvements made also by supply with

environment labor all challenge, top taking the we will retaining are and expect we to critical be are continue a the talent. to actions attracting While

our the This second is Our five win development progress a on involves the strategic activities of day. winning to solutions. comprehensive In increasing we focus automation significant to made of system. technology implementing transportation execution priorities elevating on our value-added and more management XXXX,

and we We technology and to automation more invest will in continue can efficiently ensure execute beyond. XXXX to in

years. third network have strategic and priority, closed our to rationalize supply In we chain Maryland chain. date, sustainable To This XXXX, the is addition most distribution term. we some and represented which Severn, alleviating in growth our network support warehouses long to a significant in implemented of chain our Moving stress DCs new SKUs. drive supply on will improvements the the in transforming opened the facility our in short two and optimize to the term our footprint supply center savings, many

lower have customers faster, as the This we access few us The addition, shoppers square more next supplies XXX,XXX this X than allows provide Food This will save also servicing of reached they or California. customers, fleet our so West helping metric to footprint presence we month. Coastal distribution you partnership, year. arrangement critical mileage annually In a fresher through million ago, agreement facility more by foot costal's West deliveries also diesel and and to out XX% an cost-effective reducing with on food Stockton, million beginning tons. of our center work they our by in X miles begin Coast will Through ensure by can to roughly estimated multi-temperature their Having launch gallons gas by our Pacific household an a weeks have our Distributors reduce greenhouse emissions in ESG may our Coast. fuel the will carbon agreement XX,XXX need. read operations advances expand distribution footprint us to

of As transformation to efforts. our initial on with our million $XX from supply $XX are savings we chain cost million today, of track

those savings accelerate We will to in accretive and expect begin XXXX. that be

portfolios. acting optimize Our fourth insights and to product on priority strategic customer is

military for on success a diversification. We tactics, positioning our including of focused are through portfolio segment variety

We are profitability also working services. expand customer and to

we with our also upmarket to to services and assortment equipped food solutions working to retail, continue uniquely a As across distribution, more our align enhancing to retail We're retail and our company customers. and deep insights tailor wholesale provide preferences expertise with are experience. community local

fifth is and strategic launching Our priority final customer-centric solutions. innovative

We profitability e-commerce grow own will us our increase sales. leverage insights our help own data-driven their to and and brands to brands

create services our plan. our of summary the offering All new partnerships the be strategic that's right; We through strategic the operational ecosystem of foundation future. priorities, that will of five a also

are SpartanNash running We differently.

these Among excited will where initiatives been associate our ourselves we we're metrics, as we are performance As outbound a rate key success measure and XXXX adjusted safety, forward about to and continually focus tracking where these throughput, keep I'm accountable. headed and EBITDA. look company. XXXX, across our fill on retention, we've to indicators metrics

to we'll our shareholders. greater our I'll an with outlook. to With meaningful it we that, I continue and As of walk detail SpartanNash Jason? you investment to our fiscal return that through provide all will in long-term XXXX make you Jason to execute, yield turn financial believe over performance

Jason Monaco

today's Tony joining welcome and Thanks, call. us on to everyone

fourth week of Let's to the billion. $X.X the the quarter sales of XXXX's detailed portfolio. Outside compared $X sales This for were the can quarter growth food jump comparable increases inflationary with store $XXX the of sales million, continued existing into attributed well as certain billion grew million. as of fourth across results. XXrd our Net fourth in our $X.XX growth retail be sales sales customers, and segment quarter to within pricing distribution impact

The for impact $X.XX in in quarter The resulted our and $X.XX Tony came EPS last related that off one-time the paid new an between EPS of and in compared plan of gain. corresponding is share basis, the variance EPS a the GAAP quarter, adjusted Our $XX.X quarter to On transition our reduction accrual XXXX. mentioned EPS to $X.XX year. earlier. year-end a million the diluted was of fourth per the GAAP in transition primary to sheet in time balance at adjusted compared share $X.XX per

quarter, the fourth transition to grant-based the at in year. the policy resulted fiscal required elected accrual balance policy a end which to accrual-based from a the time During of an off company lower

decrease Gross overtime year expense quarter was quarter, quarter. off prior an adjusted in to million margin the Labor our a offset rate As XXXX additional flexibility increase earnings in higher earnings improvement in improvements where Adjusted This XX.X% of mix change driven quarter the during over prior to rate corporate compensation, $XX in to we distribution contractors. incentive in fourth The in was year XXrd profit accounted in create compared of third-party change decreased for reliance on expenses including compared the use partially compared EBITDA was and the military the segments, saw and profit accretive administration XX.X% fourth increased time to overall to by well the provides fourth The an to in quarter. chain greater share. $X.X the more an was higher increase in $XX gross $X On costs, costly incremental year-over-year. growth additional fourth which our policy by a benefit. million to food Also, profitability the within ongoing expense segment prior equivalent the year. last represents the continue prior an retail higher conditions per supply basis, year. to LIFO due sales. from associates million week market Tony was $X.XX Inflation drive year to led more in as as primarily million and new wages, mentioned, expenses. to increase

of for $XXX due quarter our segments. million $XX the Retail's cycling the of fourth of sales in the This came to quarter million million XXrd to net was week the primarily turning XXXX. impact compared at Now, decrease in to $XXX XXXX.

the impact increase. experienced week, solid a XXrd sales Beyond retail of the

by towards paid the Our comparable XXX X-year and while sequentially quarter accelerate sales continued X.X% an and Comparable quarter, segment asset the at of for charges. store X and quarter XXXX's the of in food the were million basis of policy, this operating million other $X.X fourth new and in sales in lower the Adjusted quarter, $XX.X compared paid million quarter. retail compared off off $XX.X favorable restructuring XXXX's $X.XX were for from benefited quarter. sales detailed third Table items in related from which quarter, transition to inflation. Fourth quarter in adjusted comparable decline earnings impairment stock offset of the shift store Net plan, transition Retail of to time This was and was in operating billion XX.X%, the sales charges impacts our excludes by cycling the rising from were year inflation sales earnings to the and $XX.X consumer $X.X XXXX. asset impact home prior in partially million earnings points distribution the and increase the $X.X comparable week the driven morning's were to new in fourth restructuring million impact the time the store fourth impact sales driven fourth segment $X.X up million. impairment up were cycling increased billion operating largely food reported of XXrd XXXX's compared fourth release. by warrant the of

grocery to of the core in further increased quarter averaging an range trend distribution inflationary into above X%. the inflation as still categories proteins Certain produce, see particularly including continue We increases business, We see X%. about categories, increases, the continue largest to core upward XXXX. while our progressed, in in and anticipate

and previously restructuring we operating $XX as increases increase the time offset distribution quarter the the earnings we off these million million will operating in of expenses new $XX.X These week. time adjusted due through of gains quarter. of the off of net year's impact noted, lower fourth earnings transition earnings in XXrd an quarter, million exclude million and $XX.X compared impairment policy the year million, customers. charges. higher sales the the $X.X chain higher in million be that in for and included charges. to Adjusted earnings decreased prior versus just fourth over $XXX million. $XX.X supply earnings shrink. our quarter However, to a the partially which were prior of operating for operating asset the restructuring operating food year Military the expect the fourth compared segment rate the impact of reported XX% transition current prior to inventory new This impairment paid Adjusted asset totaled quarter passed $XXX paid in year by to in totaled Reported related and by the to and incremental plan sales

at $X.X operating in offset decline to partially demand challenges week, was current the fourth as million, The continuation ports of quarter. gross current In XXXX's $X.X the fourth down quarter. inflation operating from in military to in volumes, the These These adjusted to of lower $X.X the what transition is million the domestic the decrease year loss the similar distribution new improvements reduction million in expenses, loss have of of and segment for current price a observed reflecting supply margin. food supply segment's sales were chain paid year off quarter. impact our the time fourth at related addition to chain The as in XXrd a transition in declines business. export commissaries shipping in and were of million excludes of higher $X.X as in continued the paid loss by result a off compared was offset policy in the impact rate decreases by the year quarter, quarter time policy reported the and well quarter XXXX's we continued international the in

of balance fiscal long-term in in Due EBITDA million the to year. end reduction is compared leverage ratio fiscal our net to the X.Xx our at the $XX.X debt compared Our prior to $XXX.X to of improved million XXXX XXXX. $XXX.X Xx adjusted million,

$X.XX resulting in return. The in earnings operating in a million significant cash equal in XXXX, COVID-XX reduction the in prior to flow in share. prior also the XXX,XXX per to shares the repurchased generated largely decline company $XXX incremental expense during enabled prior was which shareholder paydown as driven focus interest well year. sales flows For The current million, resulted million the in $X.X year compared cycling million the on continuing the dividends In we XXXX year, of a over continued debt, year. fiscal of in total as common our related $XXX to performance long-term prior working volume increases strong favorable paid the cash to for capital year. of company full year consolidated by The $XX compared cash

net As providing and elements XXXX both consolidated to release, for expectations with consistent initial past today's covered the continue for fiscal long-term of which fiscal in press sales with year we're supply to Overall, current XXXX incorporates guidance results our the our retail remain and environments. strategy sales the retail, that result and be segment. will XXXX this we to XXXX expect chain from expect into food We're to X%. will in we range a X% our and customer $X.X ranging in base from with trends corporate to revenues be distribution, increase that will believe sales we comparable to independent our of $X.X to X%. similar projecting billion. In flat In retail stable billion of to strong

growth other resulting in portfolio. expect X% decline. expect also military sales We continued our a see areas a Within demand, our we in business, to commissary decline to X% of in

Our guidance year. the the in profitability company's an prior also over includes increase

We EBITDA EBITDA to to expect $XXX adjusted fiscal in be million, compared the $XXX to XXXX's adjusted range XXXX $XXX of million. of million

revising will to per expense adjusted earnings $X.XX from compares per $X.XX evaluate fiscal revised the share non-GAAP ranging which share an share a to the our adjusted EPS increases for pro our expected Tony performance As rate forma positive executing our fiscal earnings a due to reduce from reflects will are discussed adjustment $X.XX both $X.XX the XXXX guidance of range revised in which on better presentation, beginning prepared The adjusted compared include considering presentation, and believe EBITDA our $X.XX performance fiscal elements XXXX improvement of between presentation to or measures. to adjusted and enable portfolio consistent basis. XXXX. and unnecessary LIFO the our Prior adjusted XXXX per across in variances We discussed This in to earlier. earnings benefit. our excluding EPS was in of to of impact investors this change to LIFO, we of release, adjusted strategy XXXX earnings margin $X.XX. impact be Profitability

chain challenges XXXX, product our persist of the availability offsetting some growth from potential partially same labor strategies. supply expect within into will the We and

$XX initiative million. million reaffirming supply our However, we savings chain are for rate our run $XX from of to expectations transformation

savings achieving the begin to revisited expect we capital to range We this Due improved for leverage, have our our of by XXXX. rate end within run allocation XXXX.

guidance growth the capital in to in fiscal XXXX fiscal the Our year our an core increased expenditures and reflects initiatives. total million million operations $XXX of range investment $XXX which for is

In program. $XX other share share In balanced with shareholders. creation will buyback to approved to repurchases we increase addition, in with the value our to connection be value million opportunities plan repurchases recently a XXXX, best deliver

quarterly to million regular Depreciation is $XX expense $XX We also and million. million be of amortization to dividend. $XX to our range in continue to from will $XXX a provide interest expected million and

adjusted call from the like expect reported rate back over now, to to tax turn and effective I'd range And our XX% We XX.X%. to to Tony.

Tony Sarsam

Thank Jason. you,

leading Board Before new the directors about summer, I began Board comprehensive are firm. that want assistance month we process of to remarks, refreshment company's of the turn appointed executive we independent search three address made briefly earlier my announcement to the a with I concluding Directors. a Last the to this

SpartanNash Patel benefit welcome will human Purrier their to are expertise. retail, Julian Pamela consumer Dr. from and delighted distribution, Board. technology, brand I'm Gemin and We the Minnenberg, resources certain to

re-election and On announced guidance and SpartanNash that be thank as and of board to Annual company, Nickel Yvonne to year's this We SpartanNash Meeting. want shareholders. members, their Board Jackson of I dedication Elizabeth the them right. will for years at not the and directors seeking behalf All it's also Gambino, Frank current

XXXX pleased year So in fourth very are closing, with quarter financial we performance. our and full

We a heading are solid in position into XXXX.

which our labor we our improving challenges, supply strategic we operational and industry and are excellence focused As wide chain initiative. include priorities are navigating supply five chain transformation on

well very to term. We this we shareholders are in long positioned are value and confident year the deliver that for

details more our are and to share many eager strategy. achievements around We

the Day join the With still be this working which you'll on likely I'd up meeting are is We this able to like forthcoming. due virtual COVID. be to to Investor us. to call that, turn be it hosting toward operator and our for back will to We Details your open spring later hope questions.

Operator

from Chuck comes from question go first Cerankosky ahead. Research. The Instructions] Northcoast Please [Operator

Chuck Cerankosky

everyone. Good morning,

the and you first and New chain you in If how supply versus quarter? progressed the Jason, fourth could, Tony two the about issues those supply it of talk can call over labor things Year months

Tony Sarsam

Chuck. to, Happy Great.

year tight. off year. last So at a started left it way the labor similar say in the very has is the The -- I would of end market as still of

improvements and We've even here but for sledding. offering QX the of there seen still in level market out. entry-level seen have week a difficult it's still highest as and a may number is to challenging very kind quite though improvement of in week have comments our in labor noted I we particularly modestly, have we seen for very There We turnover bit earlier, back been made, a we our the waning in high a of every but say jobs. still it's of -- and and would tightness still improving of some of QX, front-line

seen challenges, think the of to effects that are is supply struggling what's talked would on They here the it's is, any that, there the middle of make fourth chain. real candidly, and surge changed a still probably The on headline We're think to is we and seeing about we quarter. about capacity the produce overall in the have actually improvement got inbound, you that community. labor issues On worse the hasn't bit the our there, same we lesser chain that orders not impacted the our with and as that manufacturing I much since overall going I just of all labor that there. disruptive say supply type has

for so store outages effect the will at in to from normal are something and be it's whether cause linger like even So manufacturing, a like those disruptive snowstorm a agriculture, more level, trucking, bit Midwest capacities are significant limited a all longer. a more inventories little held the

that the see and seeing So, we on overall we again are on chain our issues don't optimistic very difficult. we're progress good although supply snapback on labor, a some inbound service still

Chuck Cerankosky

where months kind on and rates stocks, they also have Can out on numbers you fill the they side? your say give of maybe are, where us over you're of six some the past inbound been, seeing

Tony Sarsam

Yes. Great question.

So numbers. -- rough

course, of on rate performing, they Of fill as goods might in slower orders, SKUs the to overall back better as the and cutting overall that a around little receiving be now manufacturers lower but bigger shows had is, months. varieties you struggling than to ago, are of numbers on if know to us still volume gotten something nine XX% of that supply. for to that as moving are That XX% saw, a cuts the SKUs we right inbound inbound. on again terms right are on we go year about there we up number volume and that's are seeing over that up we're last has What closer you eroded

over year. So course the in probably decline of that the about of of somewhere overall points percentage last XX neighborhood

Chuck Cerankosky

And how about fill rates outbound?

Chris Mandeville

actually have going measure a they we our approximately how and of are that. actually our we service, better plan this have set just for we rates out on and discretely. separately building -- where And in to are top KPIs we terms year as one five We of on focus the that that what of than performance send little can we we well fill Outbound got were. bit

on -- fulfilling supply upside to be our we there well. is outbound and So comes as efficiency with from and that about XX% we're on the roughly the programs that's chain there'll number transformational that, -- believe that

what have doing months. a past inventory that number's of actually So over the pretty and good gotten the do team managing several is we job better

Chuck Cerankosky

Thank you.

Operator

The ahead. next Please from Greg go question comes Badishkanian from Research. Wolfe

Spencer Hanus

could supply just Good food for minute. you you on target XQ? get million there? during I $XX a is Hanus was bottom near-term, to Greg. in talk Spencer I about of just then walk how This top food that and the have wanted profitability million to $XX for that more And costs a cost to you sort distribution us distribution incremental through on how Maybe savings of drag guys morning. just much of chain

Jason Monaco

Jason. is This

last do bit So the the the question $XX it starting $XX to We've our is really ensuring on first the end build core about to the of and we it, million and you at and that couple operational top range. our of how quarters of get initiatives million that little with talked on bottom a over momentum building transformation warehouses against and we a continue with many to that kind a that seen execute behind then you've one the also Coast warehouse closures, optimization supply of of in couple performance. and scenes then our partnership. the bit West little of already expansion coastal opening the elements And network blocks the our of with of chain

we've is with market out got the range to backdrop amount would bottom that those of reason a to We're of programs lot the stick. the against for running the the range conditions behind earlier. make a value believe and transformation, of is move the changes you fair have but it. million in a of and a attrition, labor labor are the at to of core We broadly, warehouses. tight and that this just market the end That outlook. exceeding improvements under be or be build we're excelling to really That components real not and to $XX creation to really got that's some convinced we this to operational some the the causes opportunities get you've materialize us So conviction said for these of on codified more operating is longer a the the with $XX why see all here takes for time million time said, it not is, range that to an our overnight things and in lead to of mentioned of here top SpartanNash Tony a context

Spencer Hanus

assumptions could big the year color just for are your more for it. I guidance And that sort particular, inflation this would little underlying imply sales bit you of just and X% a in at running guess provide Got volumes. with on given in a then volume, what decline

build bit Just that little you talk guys how about sort to a up of that, more what sales outlook?

Jason Monaco

maybe I XXXX. at the from the And at in if said, the we're that expect a That projecting Yes, in XXXX. at it's we inflation least we look inflation continue see outcome totality, saw of just next few than end starting easing, months. inflation lighter don't we elevated into inflation frankly, standpoint, year an

with So and that about remember at home when post you a we're supported in COVID still also has then more stimulus going that demand support demand a of surge away And that think assumption about government inflation and the home. and lighter the versus food off the flattish food revenue it forward. you outlook, tailwinds volumes, from some coming think of

of and So, that plus-X% kind year. a is inflation of on a But continued really but is There you've we'll and think keep the market in perfect uncertainty point many crystal develops. the back moderation no look XXXX updated inflation that flattish volume cover. about I I this to the on it a in of this the lot like from ball I'm there's predicting bit early we're you and inflation going what at into a said as as support of companies with from you like sure a -- heard half

Spencer Hanus

Thank you. Great.

Operator

Scott Please Mushkin with Your next RX. question ahead. go from comes

Scott Mushkin

might have into I taking compared in a then wanted industry light. outperformance were distribution well. looking as estimates, And thanks you I did for the to the At there. itself retail, what and revenues back guys, thought some Hey to bit little have get there at my least been would our question.

be Are there kind the losses as what or well. want not I independents just just may performing that? of to customer So driving understand some

light great. that So on shed could anything you be would

Jason Monaco

Scott, the this distribution higher about comps last Thanks pace is joining. but DG to from hit business quarter, business, Jason year. grown we at a business, lapping quarter here still that with last on for similar trough again. have we're Thinking that broadly this independence important the retail is our difference our mentioned last I our the core but

of some overall. So the you're comps seeing muddy, that

Scott Mushkin

how a change bit more bit if maybe a gave the little I would? more update then a you're And little military getting great. on trying but you that's bit on detail guys you business Okay, little that I granularity, know to thought

Tony Sarsam

had years. a two the Scott, Sure. top is really Tony. on year on military We tough last line, this the

for As XXXX the sales COVID fine the were surge the base whether had done make and that as business. a margin improving actually other expectations we of of in some closures really provided in you changes cost variable declining work we but the of to there, to don't We declining complications fixed They with business, our in start than and was of military of discretely retail show had because the when broadly in business run and so know, greater opposite manifest. that will the fixed as be but sort able what is volume all margins some the because those we volume settling that business. we'll military longer think changes

for and now bases of and the base we have restrictions very monitoring groceries. the situation base are retirees are carefully. come So, to back on buy Most or few no the

So lanes, but fourth in very the little business the as at looking a -- with Also you're well shipping in still quarter the the international we that slightly difficulty disproportional at did aware. of saw closely. loss because we're

So, on international than our we higher for that represents business. total bit -- ratio more a little a decline had that business the was what

here our the and efficiency monitoring cost through the going continue be story particularly overall there. to to is drive chain, supply and efficiencies, carefully our to improve effectiveness So,

run where settled been in to the we'll and on have get be the on we from we hope we'll business to we of then is track think be long able profitability which quickly, volume here think right settle to going a make standpoint. modification other pretty As we the is going

Scott Mushkin

to going way you're And one you're last I'm excluding LIFO. to Perfect. I reporting -- slip I EPS. one in. obviously, guess the in the change wanted just

a doing got. What lot I other that? wondering at kind EBITDA I'll was I think drove that's are drove what in don't know just think I industry? I what So but of yield? decision, then we I that that people look the

Jason Monaco

Jason, EPS our already was did is Yes, the adjusted decision again. that and drove not. This excludes Sure. what EPS adjusted LIFO

confusing. we the had measures was And in adjusted divergence so believe you a that potentially

up with treatment measures done is lined to of the respect So what those two LIFO. we've

were they in or We lined the also be EPS FIFO adjusted compare to both step with to up how consistent took practice a we're -- reporting expense. this was And peers they other we wanted reporter for were adjusted to sure LIFO. predominant with we for LIFO already a how back the space, their whether found make what adjusting which

Scott Mushkin

taking questions. for all Terrific my guys. Thanks

Operator

Markets. Please question with from BMO Bania ahead. next Kelly go comes Capital The

Kelly Bania

you Hi, good our morning. taking questions. for Thank

the the just at about margin and retail. I to wanted quarter First, ask gross

drivers think at other 'XX segments should quarter about out in as think the the well? called margin what are supporting curious seeing expansion but three at how I margin retail retail gross fourth we the and you gross of as were

Jason Monaco

to This Jason. on have is here. good Kelly, you

other Our space business performers have was, looking margin retail total with earlier, improvement you the segments, comments seen the the a benefit up. share In what I the of the would margin the business down two better driving as consistent we in gross gross like. moderately talked margin the retail about say was of in as in retail total as well would what gross

So even in total modestly of as food share level margin. well unit the the retail distribution, retail represented by that margin of backwards improvements the XX.X% improvement was in in as and though helped slip quarter, gross business gross military overall

Kelly Bania

to what on color Any in expect 'XX? there

Jason Monaco

Yes.

relatively expect continuing going We forward. have strong to margins

is fuel. bit a to highlight retail One little margin of gross retail related in with the yes, there to other variability is, of nuances

year-over-year. down, So fuel per and themselves on prices gallon are fuel, you up than know, more have as up basis XX% been a

of noise retail in got little that margin. So bit you've overall a

the margin, in modest a seen other that much decline way recently. better gross I that is it variability is, and of much on wouldn't a performance bit and as the into report the is too at as some market don't than deterioration or I our read little players it, again, the of the So characterize report you've as we decline

Kelly Bania

XXXX, rate you the guidance about by think it initiative driven really to of we Okay. target, that $XX as supply is that think $XX for that million impacts or run fair reiterated help of in really segment guess, of the we driving that all but can and towards think go is improvement the maybe EBITDA through end I profitability us chain your 'XX? all that the to you And about million being year at of that about how the as majority being

Jason Monaco

Sure.

but margin that the that in, So fact to by would it's that as didn't significant costs continue gross environment and I'd plan that I be have would labor as a to continues expect highlight certainly and only transformation and increased we outlook wage significant the chain offset the we're remiss going operating the action the well we the component plan I that it's significant out there. reflect the of not headwind improvement programs supply if a say be forward. improvement as

margin about headwind gross chain topped partially to So with and gross off chain in military, be the seen we've both couple our seen transformation we context us solid last you've build stabilize expect food us or quarters. continue and retail you've and that labor the improve supply by growing, and most offset margin quarters in the supply margin distribution and solid to and margins headwinds of that talked

Kelly Bania

for help or to to able you just us cost are labor understand quantify magnitude that? your plans there the And year, of the inflation the

Tony Sarsam

somewhere we numbers, Xx XX neighborhood $XX in probably would that's at looking overall context and and the rounded somewhere In Xx between Yes. between we're that and million see. normally in put

of sort up against. that's we're numbers the So

Kelly Bania

just one Great. from leveled the me, think And segment. as we DG any through lapping noise rest we distribution the the impact is the 'XX Is now as move out as still or there we about of move for through just year? kind that of last

Tony Sarsam

in lapping We the fourth certainly are comps higher still quarter.

was, four higher but the the burn of trough quarter comps trough, So quarters off quarter lap hit the what in still have as we roughly we of periods. we we those prior kind third to talked about last

Kelly Bania

Okay. Thank you.

Operator

follow-up [Operator from go Instructions] Northcoast Research. question from is Please next ahead. The a Cerankosky Chuck

Chuck Cerankosky

Thanks. what X.X%, LIFO forecast you number of If said Jason us? I we take think of about X%, inflation does that give your kind

Jason Monaco

expense color -- about year, expense $XX million XXXX, for north little Our LIFO was in XX inflation. just a the year this this on higher LIFO slightly of

that's should expect perfectly perspective, what this you through number and precise in color as a be yes, in know a but that's number going and is teens. be It's it's going to going not you the to teens. for So the linear

Chuck Cerankosky

a saw in than perhaps XXXX? what we little less So

Jason Monaco

of we comments, that I the the versus pro noted higher versus and EPS we're because my was range an projecting that LIFO potentially for the ranges XXXX mentioned less in is XXXX. slightly my had XXXX what the that that was versus EPS than Part the Yes, what forma. comments we in range earlier than reason XXXX decline 'XX what new method, saw EPS on in in prior I differential

Chuck Cerankosky

All right. Thank you.

Operator

to any This concludes conference over for I our like remarks. session. the question-and-answer Tony would back turn to closing Sarsam

Tony Sarsam

all the right, on updating We participation today. for appreciate as the throughout thoughtful spend the look thank All time to forward questions well ability your Really you progress our with year. always you continued and today's call.

a have all great day. you again and thank So

Operator

The conference has now attending concluded. Thank for today's presentation. you

may now disconnect. You

SpartanNash (SPTN) 24 Feb 222021 Q4 Earnings call transcript