SPTN - Earnings call transcript Q1 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to the SpartanNash First Quarter 2022 Earnings 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 conference over to Kayleigh Campbell, Head of Investor Relations. ahead. go Please

Kayleigh Campbell

welcome earnings and SpartanNash first Company Good call. to XXXX conference quarter morning the

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

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

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

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

Tony Sarsam

SpartanNash. Kayleigh Thank to you, and welcome

of everyone. May earnings happy quarter. And we Investor joining Head On provided our Relations. highlights you you I'm the have to Thank We XX, are glad as board today, walk additional us. of And for morning, through you to preliminary results. good on

the in of X% of We and we all than to secured by efforts an taking meaning approximate create impressive throughput rate million expect $XX past direct by transforming million schedule. annual million our throughout a distribution in These commitment chain our network. efficiencies hold. achieve accomplishments XXXX. the are $XX are winning two in now are to delivered that supply leveraging cost this million rate to of We run supply fiscal result part to showed end chain year-over-year. of $XX for recipe, milestone improvement work leaders we We possible. transformation initiative to $XX on started. year our this I and of focused insights full which hard quarter supply foundational our As just our data and million in $XX savings, for significant are reached element ahead their making dedication chain more run We expanding is our getting profitability a this wanted initial our thank savings savings

Retail our to Moving segment.

resulting to continue comparable that associates store frontline store to service of team the shoppers quarter. up were sales Our in quality deliver X.X% in

on in we our momentum and our building are market share We strong saw grow. retail business

committed retain to more service for and We to better and have create briefly value. competitive of remain stores. ingredients our shoppers the gross are This us discovered who current our and margin a on providing helping is customers exceptional focused pricing. We drive our mission delivering market life,

outpacing brand That private penetration. the our We sales private really Overall, XX.X% increased overall label our impressive. label are expanding year-over-year, is growth. sales company's

first over business. our QX to the for year Military since Now, of XXXX. to increased I'm time proud the turning quarter say prior sales

of target exceeding EBITDA Additionally, we X%. turnaround achieved of military adjusted X.X%, margin our

we of variety business. for initiatives We see are to increase strategically a success through and further to opportunities this Military the profitability continue positioning of

contract with of extension DeCA. is of opportunities these our One around label recent the private

to us exchanges worldwide. XXX the gives service distribution military XXX and Our unique network ability commissaries

And home. supply great network across with America's food proud our Europe. we continue and taste to unique provide leveraging speaking Ukraine to Eastern supply of global military value military our heroes and families are their to and refugees critical providing are from We chain, a currently

Now turning quarter. to the impact had during that inflation the

was reflects transformation chain initiatives. our our winning continued of also our the While inflation recipe and tailwind performance execution us, a for supply

the Looking ahead inflationary in year, we to to and expect the operating environment. volatile remainder a of continue

beyond teams manage going to Our are above through uncertainties. and these effectively

the the results of our impact Additionally, in half year. of taper inflation should on second the

In recognition enhance the to talent have labor and environment. focus and the labor to heightened top to experience. in taken include additional communication. several benefits, investments These streamlined on market, and training, in our attract Turning associate we retain associate order wages, steps safety

the past flow applicant seeing improvement including X.Xx incident benefit in rate. XX% the higher We initiatives of safety two and a normal years, over these are than our

growth. to strategic Turning

couple who quarters, core and past is recipe introduced excellence During $X driven going. where three of that solutions. our and defining are insights we winning are our we operational capabilities: we The million the drive people, by

view can presentation visit supplemental of winning Investor you earnings section If overview our an provides the corporate recipe. of the which website, our QX you Relations

I'll strategy, a services our independent our network expands announced get part our of our and across and solutions partnership specifics both we're physical on us enables to customers. empower e-commerce we month, of some DoorDash. also Now, with illustrating how as retail grocery X,XXX platforms Last and into our executing partnership digital plan. This

and expand We digital resources grow businesses their they providing their with and tools them need are now footprint. additional to

delivery from offering grocery be more we'll than Additionally, stores. XXX company-owned on-demand

priority retail Our more expand partnership, driving base our will customer-centric capture digital customer growth. this offering. and omnichannel by we rapidly grocery innovation is the our a scaling new of market, With for key

will centers. grocery chain, Fare We also food X-star banner. These agreement reached an popular recently a into to Family acquire stores our be converted Michigan Shop-N-Save

us This greenhouse miles. gallons reduce a Coast servicing annually, transition pleased a launch. distribution more network. been of year million cost-effective the Distributors, allows offerings the customers deliveries save lowering to now our further footprint. helping fuel advances shopper partnership phased-in XX% We after smooth foot fleet center a California roughly emissions is anticipate we into our Pacific us members customers Food square fresher program. provide West faster, are serve. now has Stockton the by also in an our done one with by and We're gas this our facility or mileage The our by Coastal customers. focus I'm carbon Through integrated Having diesel expanding Our progressive arrangement seven also our XXX,XXX agreement and XX,XXX and they multi-temperature is our to than fully more our tons will loyalty presence for work ESG our to yet. reducing new the ensuring million robust estimated that not metric while right through announce team also

not highly the you is at encourage our Corporate review I inaugural the of ESG report If seen section to document, spartnnash.com. website which Responsibility you our have available under

targets. Now, let's talk about long-term

based strong on May XX. and a winning in our built momentum we us have our confidence recipe gives the growth We announced on foundation recently targets

reminder, least to by more sales at grow billion. from $XX XXXX, than by a expect XXXX net fiscal we XX% to As

year more And an of We expect expect $XXX XXXX. year to increase our we to adjusted of EBITDA million. from adjusted margin expand EBITDA XXXX from fiscal by sales, net XX% XX% to X% at increase than fiscal least to

long-term and believe with which is our current pleased very taken for growth shareholder executive in We team increased clear has path are performance. value. reflected strategy our the the provides a leadership actions We

Jason heartfelt made turn and excellence associates thank work has is dedication whose you possible. one the Jason, our over great I'd results over company. operational on Before leadership turn to On that, transforming With executive to of Their I through the first customers' like now and call to call these behalf being our SpartanNash winning detail. our SpartanNash you for keen in the focus to the more hard extend quarter you to performance I'll thank team, heroes. financial unsung walk

Jason Monaco

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

first increased attributed to three Net $X.XX of business This X% can or the sales compared for to positive billion. Let's detailed in about XXXX's billion million quarter first sales growth jump segments. $X.XX be quarter the into results. to all sales $XXX

of EPS came an in quarter was rate, to to year of the an increase strong in in year's margin first company the On the The first growth expense at fuel higher supply Gross Food GAAP per in per earnings. an driven prior margin $X.XX share diluted by EPS XX.X% first we adjusted in the compared higher was compared $X.XX costs in quarter. This quarter year from chain quarter basis, XXXX. due and improvements quarter. basis, from primarily prior profitability led Distribution to the margin XXXX. in where expense which prior adjusted in Our was profit during the by in increase XX.X% quarter costs, increased to higher LIFO gross $X.XX adjusted within saw $X.XX segments. profit first incremental quarter to the gross excluded the related SG&A compared quarter diluted improvements share On in included offset million for increase the incentive but compensation is and the to over partially was prices gross Inflation higher retail increased and store $X.X including to labor, performance. is the Military

third-party of labor chain wages, in on also drive our these includes This related $X.X commitment on our higher costs of overtime cost savings, within made run during more million chain. schedule. headwinds, continue we've full million conditions reported XXXX include transformation costly supply than rate our our addition, initiative range supply $XX the activism. significant GAAP ahead shareholder progress reliance of quarter. results achieving contractors market the In original to of The and additional to Despite use year reaching

first sales inflation increased by X% to on the in million our by impact or quarter, Food $X.XX favorable Turning of segments. Net the billion driven primarily to almost Distribution $XX in about pricing.

in see to an continue We quarter as inflation progressed. upward the trend

quarter, overall including the fact, see by end continue XX% categories, exceeded In proteins the while certain and to largest dairy, the of increases. inflation

offset compared $XXX margins, the reported increase year's of $XXX million. totaled operating $XX.X million over Military supply decline the Food adjusted incentive The partially of year. prior our the was year higher trends gross in of increase million sales in XXXX quarter inflationary the X.X% million. experienced prior though earnings impact quarter. by assumes slowed $XX.X Military for the by driven increased year in of compared pricing, segment with quarter offset first operating the The first in increase compensation totaled $XX.X for the by prior higher $XX.X forward, an sales was case tapering quarter million by by volumes. net operating the the compared the remainder Adjusted versus wages. the results outlook Looking in of reduced to first previous year. inflation and million of volumes operating earnings earnings the first to in on case declined second chain partially the driven the Reported rate earnings quarter, to in in quarter for half Notably, continued Distribution

million The operating sales chain $X.X reflects net quarter incentive of of of to X.X%. business first came for Military at the XXXX's XXXX, in a by of million were segment's to benefits well in adjusted million earnings $X.X first an loss the compared in first improvements quarter, as compared labor of These the as up the operating quarter increased $X.X gross reported supply Retail quarter is in for $XXX earnings quarter partially of the first increased quarter expenses. The $X.X rate. loss margin million from compensation XXXX's million. in $XXX million $X.X million increase offset

X.X% store remained at comparable the Our for momentum quarter. first strong sales

market the exclude Retail by of anticipation reported year. a years costs of inflation The compared competitive year $X.XX to and inventory $XX.X driven last achieved course The adjusted supply LIFO related Retail shareholder the year-end. compared quarter higher EBITDA operating segment's earnings adjusted increase debt investments first quarter adjusted first to wages The current company's million XXXX's Each the and of to due utility to for product was at in both quarter, decrease were in and compared record in in the earnings to in adjusted year. long-term million X.Xx X.Xx $XX.X $XX.X prior impact the to increased $XX.X ratio increased activism quarter pricing, of of were compared $X the expense million the and operating quarter. we made Overall, customers. in to prior our quarter. to slightly strategic further current the of largely was the million million service First purchases to costs, maximize cost in in results EBITDA segment million throughout expenses. operating XXXX to net

inventory. using primarily to prior the cash from due we operating cash in to million changes of $XX.X For compared prior generated in activities the cash is year The activities these to quarter, the quarter. $XX increase and of million in activities year operating operating compared from

company repurchase returning the current We company million well remaining through during continued quarter, declared and the equal repurchases $XX dividends. the $X.XX share currently have on to our common per $X.X to shares million not During value as authorization The approximately quarter. in as are dividends, to cash did repurchase share. share shareholders regular committed our

include As May million. per EBITDA gives the operating supply improved Military million Food rising now $XX of to from limited chain in adjusted $X.XX expectations million ranges results, transformation the we The in range confidence the segments, segments XXXX expected guidance. outlook. future as economic EBITDA increased $XXX our of as our rate to to tempered margins Adjusted from on and increases. across of wages range year fiscal to EPS us expected planned EPS Distribution gross announced interest by improved well labor These XX, the raised ahead range our availability $XXX now impact $X.XX and to the by recognized partially and strong headwinds start is was headwinds, updates and to These diluted share. is and

raised net an $X.X also sales, billion. fiscal with as billion it consolidated to range $X XXXX updated of to We relates our guidance

reflects improvements in segments. reporting Our outlook three now all

positive now we the as the X% Military year. full expect business, With negative Military to of be year prior sales results continuation compared in to the will flat

up We comparable the also sales prior X% X% X%. Distribution now that Food positive to range from from will year X% sales expect will be that and retail to

to managing back sustainable recipe, shareholder on delivering volatile Tony. on conditions And turnaround I'd winning on are focused to goals to executing being call We create over now, the through and value. like our are our turn while

Tony Sarsam

Jason. Thank you,

value. with We we've the clear pleased long-term believe for performance actions very shareholder of and direct growth is taken our business. are continued strategy our the a provides momentum We increased reflection which across path our on a

before Q&A. open Now, Kayleigh the will statement for make brief we up a line

Kayleigh Campbell

Tony. Thank you,

and a the call purpose to progress conversations our the the making keep reminder, Please today's results As we're topics. these of discuss on through our of our is strategy. focused first quarter execution

meeting, more As best are remain annual all encourage ensure we will shareholders. with and to in it continue relates visit in you to actions our matters dialogue the our interest to I shareholders spartannashtransformation.com for and information involving of our our updates. website

of in filed for we are contain Additionally, carefully a with they definitive documents card our or strongly the on website. website the and the their all no with copy definitive white proxy the with our other and have obtain statement, in at may read SEC's the at by annual and the to other filed proxy the with SEC connection a proxy a SEC Shareholders any filed because entirety solicitation statement relevant will documents proxies meeting. important information. spartannashtransformation.com company SEC documents Shareholders charge of encouraged

questions. to to turn it like call the back I'd open operator over for Now, up your the and

Operator

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

Chuck Cerankosky

excluded what but and was gas could like you look gallons quarter how Could sure you some gas? the on with not quarter. the the a Great the gas without from numbers commentary gas bit talk give you how and profitable little retail about I'm in sales trended? comps

Jason Monaco

X.X% comps. dollars saw it significantly to And It's we itself, the price marginally profit first were quarter momentum with per our basis fuel to front. is margins were of raised higher from themselves in the fuel and points. on year. sales flat continued on question, about Gallons up gallon your a comp On last that and in naturally excluded the

Chuck Cerankosky

That's great.

strong inflation? pandemic? strong it pretty from include you tell numbers. those the Because that left Or is can Now comps, mostly is that anything just that's does over are

Tony Sarsam

obviously. habits to the pandemic anymore from we going I but that that is now are they're longer think Yes, sticky the there numbers. look think waned, some long we temporary point. And don't what for for pandemic are at -- this at The be has great the it's haul

their just with retail we unit follow job in think, that rising, the products, in job the They're performance, availability the has It's budgets. we So Naturally, almost there. they're seeing quality think and -- the way brands I a with But to done really as of done, -- sure has we're quarter key well. pricing done with there's been during consumers you brand and little our at consumer. really And get historically brands good items great price our of we've value slight currently have find know, manage in inflation we think to price decline. the growth slightly overall overall. inflation a of team the good. as good the that. We can that, I bit, the the own a -- managing mentioned points with a XX% space ago, lower national managing difficult, great our had own to And you kind really, for make moment a about have

So have on the been driving of a has availability solid our I component think great the we comps. own fact that also brands, partnerships and

Chuck Cerankosky

in what the terms Are affecting purchasing a fuel acceleration to be how habits? might product comment, mix please, costs and of you you're seeing in of inflation on in-store as changes result able and

Jason Monaco

Sure.

couple of business significantly. I'd look And I a our Tony seeing impact is, And kind are as we're before, step owned and brands. fuel performance, So of at things back highlight. performance up order mentioned, first you the the as noted prices if in

of brands portfolio and growing private own Our our at about non-private twice label is label portfolio. the rate

on front. shifts consumer seeing we're So that

to needs. reminder, the offerings retail as footprint we Secondarily, and really just and our business our in products these of cater store that a have the sorts

smaller in shops we're to consumers what are but fill kind loyal on winning also that those So as characterize winning we with our in, we're for stores of example, as well.

supermarket need we're seeing strong smaller basket, convenience the and money growth is pocket really have we winning consumers our perhaps performance less and front. to as a and they offer with on that that their formats in buy So

Chuck Cerankosky

say option purchase finally, of fits logistics Spartan Is Are how it mechanics of then with it network? an any California, to been And the phased Pacific your Coastal this for in Stockton, in with that? leasing facility in. it's you What there in sort are way? fully you

Jason Monaco

Yes. Great question.

So I'd Military Coastal this really operations. characterize from on operating partnership side. They're we as finish. long works way The it are had we a And arrangement that, with Coastal's is to that Pacific leveraging the partnership a site. the start

to or kind ensure -- on a have -- our a service fee but that our We basis, there and of it's quality site. of customers will. we on But if consumers to presence have a out you to

what the but So gallons program, if is by one about XX% to of of us the XX,XXX do not our being located of us over our our customers West allowed of you to of out deliveries this take take us our to think footprint. diesel it's closer to customers. It's allowed allowed out it And Coast. fuel our network to last fresher to have carbon that miles about is consumption million of on and carbon tons least out

the we're a been that So have teams found West our for ourselves. creative arrangement to the and the an really That's win-win environment, proud access for the way Coast. and of customers our

Operator

next from question comes Research. The Wolfe with Badishkanian Greg

Spencer Hanus

to quarter in is profitability business, of there? inflection EBITDA, Could driving between for can the you've you're now Spencer your in an there And Military what is segments? about sort of how at just when the step on spin almost then improvement in a for minute. the is take the $XX a we there? profitability the about Greg. you synergies thinking that opportunity Hanus look that we back three generating This seen if million talk Maybe segment's performance And

Tony Sarsam

to if because recipe is and And business go our for and business services, we are a on customers an a understand difference segments. XX%. winning we have allows services those what our larger the stores, very grocery different And our think we're to our customer between them pricing that resource have can way in the have And retail, model services services and works we and business grocer, average those fundamentally geographies. business shoppers, have the provide wholesaler a stores grocers business management and to show part shared, serve, IT are together about a make those our business you All to about We of X,XXX to that. XX% our business business, generate identity that So to of we to the really difference category full-scale our larger we how the and wholesale. it we how that makes is retail than to, from they everything independent of our segment those -- leverage our part nicely that opportunity that folks and again, of which we and the human so can we -- -- -- unique think us corporate back to

So great drive to the that. insights and difference taking a that solutions on continue customers. that mining as we leverage next the can and step we're feedback getting We're make for our

delighted we're our where good together. of about also how so are We our right all -- from great performance nice run. And getting now. had a feedback great We're We is really the delighted customers Military. a a had quarter. that We're we working about

And be I had it a provide military You to make and our that. improve life I may the back improvements and and how the DeCA job good We've to made we better We've work here, men the efficiency started the -- figure we've a better globe. network to improvements women across to ingredients first directly operator facilities, to Military with with our done remember operational one changes. got can made there. to network all out our when for to

the on as in made manufacturing with dray our All seen. our together profitability and have suppliers. is great that growth arrangements have improvements coming we some you've We there

something at It's focused was, making think that's sell We overall not all. of focus the better not. the a But organization. than in question certainly And that's it more exclusively your the to on that's better team. that's that great something we of focus a position our I profit Certainly, making focus the now. still are business. sell to That's are

operations, the we going Our fine why the a now the of path portfolio. reason balance profitability be that that's -- actually we any be is focus the right see same as and of improving can't service to don't think continuing it improving business the our and

Spencer Hanus

if to the target. could maybe then savings we pivot And cost

$XX You What's outlook? change raised to do long-term then from million those to EBITDA that that that $XXX driving year million. in much And there? you million out $XX contribute guys million $XX how for the to this of target savings you put expect

Tony Sarsam

Yes.

So -- I'll let pick Jason up and me little a start let bit here, too.

So the -- operational Very of supply we've team. work overall our the of and success. focus chain by had really the transformation supply chain great the in excellence proud done we've on the

schedule We schedule. delivered that some throughput schedule has ahead progress and is have network been we've of changes terrific. And -- savings We're of We're all of that the our ahead productivity there. made. of has ahead on

quoted felt $XX we continue will bullish we've $XX the this The up for to increase for on our year that So grow. and taking million year, number to number will carry and over. million that continue will

ideas wave roughly gets $XXX million. the next overall $XXX profitability the that would improvements. -- come it significant be transformed will will X/X of probably from say that supply and the within way has the range player how team I Our a in of to chain on of and million supply chain the

Jason Monaco

putting maybe far and of we're the performance building Thanks, a headed. thus on detail where more out, Tony little that kind and

warehouse pretty performance beyond before, we've of to the talked and about notes. a warehouse increase cost kind you and throughput the There's about Just X% the may chain step as reminder, that, in got the reflects Spencer, our warehouse up, you've throughput in and in as think a operations. operations. this closely you But in supply back as that transformation, pick

transportation improvements we and at delivered inventory, have with place. That, improvements our schedule. ahead executed the both ensure and route sites delivered of the We the also to all right the with manage the and last where subtraction addition locations way to months got frankly right inventory XX have XX the and over network we've in and optimization, the we've of together that right

by $XX feel So that for done of the of the guidance, we've and the a on to We million million bottom total for run range. taken overall what the million and $XX guidance company exit million $XX rate also that performance, raised $XX the both end that's the of about we've three EBITDA role to at bottom plus that is range. year so raised good and the brought to end forward playing it the XX% quarters top this and

Operator

question The Scott RX. comes from with next Mushkin

Scott Mushkin

So diesel I one that little move bit even the we say wars guys prices I through of we've research year. somehow just course, is move our I Ukraine push going believe, -- but to least inflation macro forward. the I actually to to and things from decrease of said, should is continues and a you don't as I at you not in reflected going want I'm And heard yet. that companies other -- -- there, this more start guess, expect would this back --

was were just I up. -- So

get just that I this better? confidence dependent on guidance So you how idea was wondering is and that will what much of gives your things

Jason Monaco

Yes.

So working backwards.

say talking where Our go wane, may to better is in the inflation inflation We're we quick that we from last things to to that XX% things time. inflation we're a about there. like We saw getting the what inflation -- around month for guidance XX%. The we think when not the on long retreat agree a at front. we is expect looking tied not

you're I think right.

that around going of country, more other we be missed kinds things and in have rates are There's horizon of that's disruptions may war significant be we agricultural think may extended. shipping and chain wave looking We labor inflation disturbances contracts at the in more supply the a and other whole the our the I at the are Ukraine. own cycle all on to ports be may There that in yet. a things very from another railroad looking hit and have. fully not of Ukraine number

transitory. may early Now, see tend overlaps quick the balance hit We've to our cycle digits the the going end were of to at we're -- some be -- all rate in at this fixes not around least. be are for not been underlying don't inflation -- agree. decline, so of the as the on of going contraction couple causes it's a is that now -- about that to years, think last We talking It's think, some we the we for dialogue we of we year. a that year. on and when they're we we of from double talk inflation going while. that And the a be We're about to here

Scott Mushkin

kind the other I guys push a but want I monologue question on maybe idea in say and hey, this that from distribution So say, seem, business the of a on to would business into you it that your What perspective. do way? almost little naysayer someone looks does a bit a on back the had profitability dime it this went to you of turned would then, military and pushing kind -- like gosh, that,

Tony Sarsam

to back pushing They're dime? turn on a

Scott Mushkin

it's be Yes, fast that it than turns temporary got more to permanent. so that

Tony Sarsam

I see.

we not arguing that be should So slower. you're

Scott Mushkin

No.

Tony Sarsam

saw that And here, some are a very I they there some seasoned that operators could quickly. think got team there I we are -- as I've things Look, a things do brought that in.

right and profitable the were maintains is But thing now some in effectiveness have network, a the fast. our great to warehouse us our changes, way schedules more for there are for And we things delivery and so making that we're the done commissaries. the commissaries came changes that our permanent in that and

baked those with agreements suppliers the And them. to be relook our with are manufacturing contracts changes We our they'll are around. and that in are working

we here business found that got ones so when make I really to think very had was acted a quickly. to we doing had we quickly because and changes I had first not quick some good So that and productive we well We make.

Scott Mushkin

I this before then your one you final Fill My fill manufacturers and real is yield rates from customers? quick. guys and to rates your to

Jason Monaco

question. Great

same and a fill have the mentioned staffing I've of that manufacturers So -- suffering for on that last and couple are The the from remained rates come disappointing. types as staffing other lot of disruptions manufacturers, calls, the are of issues. from in businesses problems

from modestly terms of and -- between our gets sort received making suppliers. what We're what been kind shipped have rates candidly the improving fill gap better they're Our headway of internally of -- out. we've in

out So we we than going here's here's better us. points what we're on versus historically of to now, about around has we terms it's eight portfolio goods we've were right order nine to -- seven been in way performing of for pre-pandemic the business. gap now we and or points are the That our fulfill now that got right and are internally six

manufacturing community. our we're tough in still performance feel we from circumstance where about So -- in receiving our the great really numbers still

Scott Mushkin

heavy And done of during obviously, lot the quarter. a lifting

to congratulations that. guys. on team Good work So the

Operator

Saleh The next question Peter with BTIG. comes from

Peter Saleh

quarter. consumer quarter. hoping Congrats the the on the Can could you much bit really a the trended in about increases that in or maybe number X.X% up pricing the was us that quarter. the strong transaction think Just basket mentioned give understand a you little Tony, color on actual versus was how I quarter. retail to the comps, down you I bit in trying XX% inflation how more growth? break was of little

Tony Sarsam

Yes. Great question.

we're to in what our now, stores. trips -- seeing an right So we're increase seeing

bit might -- when be where to them a have I as you here are making getting we little of comfortable the expect more is our we're more increasing. out at this audit are the people a a of little my scenario gas after while trips fewer prices There's getting think where there's pandemic, on going bit opinion. time

The The have of in of higher the is But pretty we Slight more X. So rings was but competing modestly trips. we're net decline to close we we that roughly because trips. overall significant of course, basket seeing negative, inflation. then saw our smaller. have these kind units. And a in effects size uptick of

a the little on. what's of mix bit So of that's going

fill-in by encouraged more shoppers. We're -- coming trips. fact of the that we're loyalty category for seeing So in. adopting the we're them the shoppers more people are them routinely -- mix and seeing into and more in more for their of come customers, of our also We're

think seeing good you should things some lower the higher what stores. prices. basket, is of business course, we're expect, seeing sort slightly And units of around really overall what So the of we're and, the we on

Jason Monaco

that discussion. just I'd to modestly Absolutely. add

parts basket with the comps -- it's beneath size. the you and the pull back as moving Just and you trips said, at look some but Tony surface of the at if there's cover inflation-driven same-store X.X%, of largely if up kind back

you or as point I'd at is the thing would retail than this other median that performing, I characterize better is grocery to of business retail The what general kind the for space.

And the we to think so well there's relative a many lot space. of the but in of players we parts moving other comp

Peter Saleh

just up. like some It talk impact seeing wages another maybe applicant Just flow wages and segment. there? on to Can retail the what one the the leg about starting you're you're more more yet you on took -- sounded but maybe see

Just trying this comments on to understand morning. that your

Tony Sarsam

Yes.

X.X% we normal up, you in almost taken times sort right we seeing XXXX. in think the during that we effects. We about saw -- combination our pandemic. We've So believe of almost around sort that's entry-level of and know, applicant -- the pre-pandemic applicant are just XX% just of wages flow better as a flow

to here XXXX. We will probably take them same up number that close in

as better communications, to woven we stickability not big a so applicant what -- -- has our -- changes together, improvements, with around with organization wage once the better get wages. they -- with training, a it's there's benefit the entry-level home gone stay things have led and done of can of around The improvements They we've here think flow overall people culture big So overall those that combination well. just find all at.

good there's for of of out businesses. overall, the not talent quality we're tough a that and yet we So think woods real the -- shortage all

changes. fronts. to compete big we so And have entry-level why has The on pay be we offer a those all to know made compete. have solid and we those that's opening that to We

Peter Saleh

forward? of go-forward And in or we should would lastly, going then in these there. we Military seasonality that basis? a of know margins a hitting segment Is improvement of expect anything you aware conclude we on the this just terms the from Should that targets nice there kind any be

Jason Monaco

in being ourselves range X% margin We Yes. question. the see passed EBITDA as Great going forward.

So a to run here, X% applied we're forward, be was that enhanced in there We've practices as expect customer and that to Tony X% going operational and at level. I said, We've when going business. continuing or performance we challenge we've applied and got above goal engagement improvements. that a first reached

Operator

King. question next The from comes with Andrew CL Wolf

Andrew Wolf

distribution the retail, through you went real sort on kind growth just on of exercise. So a sales of side,

cases your math, if adjusted are So sales inflation, up down X%. almost cases as X%, XX% versus not be but would mix around simple X.X%

you as mix understand But don't also, Is that. this some customer the why us big ordering So maybe something, else that? the on independent left we there about? help it like going at just much if that there's Or typical is something know can is not or juncture? business customers is

Jason Monaco

the of mentioned quarter. think we one of in I'd call that calls, of that we've the the the into over process on to insourcing we're is, and thing lapping carry out do this here expected used with I we've the still business of the through to prior And some DG. some third

on negative from or we're network in the comps of positive, but It's the that case out So the of the prior down. this seeing all kind phase year. you're

Andrew Wolf

much isn't stuff. much Can we cases go ourselves -- going you get at? to better that's say that how the so So Fresh your is how look a much sense how can of DG

Jason Monaco

the business the business our I'd space. retail is characterize core of of our What independent rest in a wholesale that like I would kind suggest our lot -- looks

Andrew Wolf

to competitive was you back in a guys, something that for And assume to retail, mention you pricing. response the I market. did

to your seeing Or something caused discounters? to pricing? what sharp on other response pricing? more with starting dynamic that their to are is supermarket was already the do your going just inflation be Like guys chains and that naturally you there get customers to So

Tony Sarsam

think we're in of we're environment. had What -- in, in and you characterize as been an it Sure. step inflationary that about I'd operating back -- accelerating kind if -- the context

good you think it consumers we may through about those to do doesn't inflationary pace end. on and needs, focused stores. what the necessarily And down. we're share flattish value It we're the the about changes, properly, taking we we outcome instances. about those understanding what want prices on in the as when managing up in pricing, need at the maintain environment drove price rising a sensitive pressures [ph] to that key And comps, pricing are feel are back group which and mean we going that the and price volumes mean competitive So is match X%-plus ensure prices think consumer the our to that the many we items in the we're

Andrew Wolf

I answering seems or were two And throughput. lastly, on chain, cost Jason, think realizing main that X% referenced is results? up that quite this savings -- of an being the But juncture, times Is in improvement. just supply productivity you driver main you're you throughput your product mean driver? or -- I the in one the when your at and what like what's

Jason Monaco

The efficiencies, portion But that is -- to flows it management a coming about efficiencies, in Yes. like. throughput inventory the line. I'd significant route would characterize transportation the characterize as benefit. it's of from it I bottom half right the remainder practices optimization, and network

Operator

comes Krisztina The Deutsche next with Katai question Bank. from

Krisztina Katai

is growing you there imagine inflation I at this And trade to private exiting ceiling? prices? best label high prolonged that about which these wanted think go consumer in resistance from retail Can stores means have I down behavior? quarter. the you to some talk mention food a remains nice higher, perspective. the any did very rate double know inflation that you just would a of reached the specifically But XX% sort a said higher are on if what you I period to happening. Congrats are is for seeing Do or back quarter time? mean, inflation. I of how we you you think you do regarding seeing

Tony Sarsam

Yes, it's a great question.

vigilant foremost, this, so and that exists the very we in -- of years the are because last playbook we So how XX behave. remain a will there's not study first consumers for on

world inflation different the advent of in then. food quite XXXXs this back since the and haven't had was double-digit prolonged the We country

vehicles. the we're price So that look great as looking things bit I We're to to learning seeing label get might like stuff along for We're some seeing lowering a experience mentioned those a at we little -- and the ways slight to private of way expect, well. -- earlier though. the

also higher ago. the and strong that a margin growth mentioned typically higher have is obviously just higher mentioned you cost, of it we part really seeing and So store. Fresh a second Fresh in We're --

save food at on value to So are items maintain them of ways their sort look money will people we indulgence that items -- everyday living home. key for we'll for and way to to and joys ways find continued explore the through see think actually that is element what again, of some that look of for to

seeing that up not And floral. so, we're business seen really We're bit of example, as doing with doing is be floral well be an bifurcation well. with as and business but a and a staple might is -- we important well certainly our quite market there'll think a then we're Inflationary our little say. flowers we'd deli doing

is and So easy and prepared quite still meals that that business an in deli a way convenience -- seeking again, doing our to get well regard. solution are people

restaurant. higher the because the I analysis. are and strong higher the items people -- aggressive Deli So also these know are to note well very strong a But in in on those costs, at way to margin time, feeling we're trying making -- of precise complicated choices. Fresh, people find might should don't not store same that lower growth it's items. lot reason again, be seeing doing going center why priced we're their -- those growth business seeing are to really We

Jason Monaco

of consumers. adding at that, this bring whether -- solutions with the we're meals is to prepared demand home consumers to it's would And likely those label I offering continue food just plays to inflation say price-sensitive lives private behaviors ease is believe strengthen, a as this continue -- in trends to food to won't through it today. for to or here we unprecedented cycle everybody continue on to work but as phone is characterize Tony which, said, business the budget. the we unprecedented going But probably inflationary as I to are

Krisztina Katai

which question on just chain one obviously very challenging. remains the guess supply And I

challenges it I dislocated we think thought? the of it bit a essentially about as to that seeing, chains improvements especially remaining ongoing of you some market, supply for perspective, overcome think initially in Can sounds are like logistics operations mentioned than talk a these improving. we longer the although really the tightness more is just you from you some labor about

Tony Sarsam

Yes.

on Coastal. we've overall a certainly you looking have transportation our -- hit or consumers, ways we and actually we allows focus additionally, science to to was that our We always network tools to and DC. mentioned be our That part that great But the of at there's up -- prior business. new about piece talked big already that the improving So business dialed our can of logistics regard. shopper, that about the we're that that the customers, lot reposition our more through get closer And efficient a today. in

management up we're be a network wrapping in it's giving went just -- efficient. can going overall system transportation here just So live that's recently effectiveness and great us that about the and the maintain more we some insight how

in area diesel continue will to us. focus that big It's an and fuel a escalating cost cost. faster It's that's pricing. because So pricing the for of be

as we've mentioned of that last some here quarter. seen we've in So Jason earlier, this --

focus us. came to on those for of area. future productivity from continue our will part well; be to as a pathway that significant it so It's in growth Some improvements a that XXXX of

Operator

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

Tony Sarsam

report on quarter today's by look results. with in call. again we Well, right. like thanking XXXX you their certainly participation start for All I'd to We second everyone just to speaking and forward our

So a with wish that, great day. I everybody

Operator

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

may now disconnect. You

SpartanNash (SPTN) 2 Jun 222022 Q1 Earnings call transcript