Earnings call transcript Q2 2023

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Operator

Welcome to the SpartanNash Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session.

I would now like to turn the call over to Kayleigh Campbell, Head of Investor Relations.

Kayleigh Campbell

Good morning, and welcome to the SpartanNash Company second quarter 2023 earnings conference call.

from Sarsam, are and and Officer, Monaco. today Executive and Chief call Jason Tony Officer, Executive the the President Company Chief Financial On Vice President

which have a.m. X:XX Time. the By at Eastern access everyone this morning should earnings now, release, was issued approximately to

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

like would will results Company uncertainties remind you of the statements. expressed discussion begin, we cause are to and to that today's from those certain in include forward-looking actual Before materially that could risks number the a differ subject forward-looking These statements to statements.

earnings as as this to filings, actual SpartanNash's release differ factors recent discussion SEC Company's from If from the statements. will most could these you well see a that results materially you of refer morning, Company's the will cause to forward-looking

at growth trends today expectations will financial measures, also forward-looking which has can with Company number update perspective forward-looking the measures The Company a all The the that no these SpartanNash references comparable to GAAP statements. the of certain to www.spartannash.com/investors. or most website provide on revise our believes investors to in only, reflect statements make non-GAAP business be and of remember useful obligation on it the reconciliation undertakes measures. of underlying included full and release these earnings financial SpartanNash's measures Please made non-GAAP current a found

over my to now, the turn is call it And pleasure to Tony.

Tony Sarsam

everyone. and good you, morning, Kayleigh, Thank

tours X,XXX our recently finest auctions. with we Solutions More And Attendees days terrific and they to robot XX Expo. in-stock ever shopper saw suppliers. experience. suppliers Robotics. our want by and networking, program for partnered for our for model to a I sample awards Impact got thank offerings. top First, a powered our gathered the folks Food customers, to Simbe store instituted Award fresh of independent a sessions, grocery educational largest private were a create industry new of customer upscale autonomous SpartanNash three and demonstration and Those presented label who analysts attended our scanning us new They with companies than ways

celebrated also their are to communities. our customers, our above beyond Vision fastest-growing so new We to did with and we going back program. customers our And Awards and give who

them", a day "I came Our customers when without live to can't seeing vision the at of really say, expo. our life

seen plan strategy. providing year. morning have starting cost earnings the specifics refreshing will most into that builds our food being this our the this Along customers to innovative signature on the run minutes. are strength may expected get you our with in later customers, of service, release customer-focused, is of company. in we savings, go-to-market in Speaking with rate this million This of solutions plan program $XX contribute few enhanced I a our

Right which story. progress on our want demonstrates highlight now, we making to strong turnaround are plan, our I the strategic

creation through value to transformational momentum. our margin transformation, gain opportunities. initiatives, and We long-term expansion our transformation These plan continue are chain innovation and the how merchandising about marketing initiatives energized incorporates related supply

than achieving our our progress gives expect more of total This adjusted confidence year. than target in realize end long-term to the gross by $XXX over by XX% fiscal of from we fact, XXXX. more the EBITDA In this to increase XX% benefits initiatives of us million transformational in

say guidance delivering line we our am of details year. to team in later. expectations. bottom our Turning first on of that to proud I'm I the proud for very half the provide results year XXXX. reiterated Jason solid current today will And our full

$X.XX to quarter, year our to increase. strong highlights increased pivot retail X.X% billion, sales and comparable second our our quarter. Compared prior let's to net from with X.X% Now remained sales a

improved rate And EBITDA by we our X% notably, most X% adjusted throughput to increased We last our quarter. since by also $XX.X million.

highlight work. to from the retail our Another banner quarter consolidation relates

last our remodeled and experience we X% banner. store consolidated announced the representing Fare, stores enhanced are flagship three were These of As brands base. Family our program. loyalty Shoppers embracing month, rebannered we new and retail store as

were Our of rebanners growth. year sales small remodeled investments continue our sales to experience Overall, an continue stores bottom are average our a total, lift line drive remodels of accelerating the growth benefits. sample year-over-year. although double-digit and delivering And and upmarket to that XX% last

our Banner operational consolidation growth of the and leverages is part strength equity our which and plan, efficiency. for strategic brands long-term of

we or remodel of our part of XX% to plan, As the refresh remain stores. on target

the mentioned strategy. overall able industry despite go-to-market macro determined earlier, were entire success, to pressures execute are changes We And the credit initiatives we to we team we announced that is So, and an for our that continues our aggressively our upon. the customers our In experiencing. transformational profitability to maintain provide this like to Retail shoppers. this, environment solutions I Wholesale as quarter, for

efficiency Our our both which plan, and team the deliberately organization. developed of has effectiveness improves this

who operational Our the service stores an into point Two, and by sales Three, customers expanding contact, enables customers support their a strategy and focusing the future. our on setting highly contact One, new for easier grocery up organizational to value-added so on involves: excellence the function, brand that integrations executing integrations activities and go-to-market providing on is of completing all independent M&A training Four, prior in with provide and single realigning we have all from associates our them customers with service standard; structure help to and grow; coordinated;

most us innovative, help realize customer-focused, strength solutions to company. the our signature be to food will changes These

plan, to and and strategy, to execute on in prime teams we long-term the our have capabilities We right position are a grow.

to to turn about I share things CFO, Monaco financials. more mean, I'll details our Jason over our

Jason Monaco

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

into successes detailed pleased the I want we the jumping with our results. some to before extremely are of We progress making. are highlight key

of year. net leverage earnings quarter of reported to year. increased second in our were from million X% last an Three, million, sales. percentage our compared we to last $XX.X times of $X.X $XX.X of improved X.X as significantly operating QX adjusted One, EBITDA a increase Two, earnings million million net $XX.X

operating reported long-term And support our plan, four, giving decreased Our flexibility inorganic basis investments. both strong, expenses remains to including and organic our liquidity us strategic points. XXX

Our plan is working.

We are of market are driving results ahead. growing growth share and with we years

Now, let's the results. jump into quarterly

be by trends. the XXXX in positive second sales to $XX Retail to for both to increase X.X% impacted were sales the attributed $X.XX segments compared Wholesale Net inflation quarter quarter. million or increased second can favorably This and billion, which

the to the prior year's $XXX XX.X% of quarter. XX.X% in by $XXX decline the for margin prior profit our or quarter. The inflation segment. in as related offset higher rates This elevated a million driven Wholesale Retail sales segment the change or and by quarter an Gross partially price of was the million result profit second in initiative year benefits overall cycling in rate was merchandising benefits sales gross of compared was transformation

by XX Additionally, LIFO prior or the $XX decreased to year points, compared expense quarter. basis million

due supply and environment. incentive expense charges. our $X.X to chain As year the asset of sales, efficiencies our compared million to Interest a reported expenses quarter, $X.X realized year rates lower as result the to increased percentage reduction the a points from impairment transformation in expense to: higher the a million and lower operating rate of One, quarter supply chain prior Three primarily basis Two, improved due compensation; XXX initiative; restructuring from prior

due to changes to The our by primarily second national segments. in to demand X% million year net to $X.X was pricing. In one the increased Wholesale from inflationary account. was compared quarter, billion increase sales period. offset Turning than $XX prior more on This impacts the partially

about a more For Wholesale context, little our let's volume. talk

are customer Amazon achieved with grocery pleased Fresh, its quarter in who exception addressed update. of the during the that to recent all share of We business its core we our earnings expectations maintained changes channels and

that them are line through they that have more its our we closely We leveled bottom been this profile With the at demand run customers. changes time, its already has built expectations. with and said, working impacts believe into with resonate manage rate as out format

they to profitably. support We as our strive customers grow

touched both earlier, extremely custom and the organic and to that us business our customers future. strategy right help we will that from encouraged remain to we we customer, And go-to-market place for in teams now continue believe With provide the new into and the have Tony changes solutions grow each programs on share.

Moving to in partially million adjusted price profit $XX.X chain XXXX EBITDA prior The related adjusted EBITDA offset segment by totaled year These to lower the was in quarter benefits include expenses of our quarter supply were gross the bottom decreases million. $XX.X primarily leverage due the This which versus second line. better Wholesale transformation. operating cycling inflation-related of of quarter. gains to the

from as XXXX. through a did team expected job Our managing inflation-related gains challenging we environment cycled a price macro solid

increases For faster second in we the of year the pace moderating. the quarter, reported million million period. inflation expected, $XX.X $XX.X quarter earnings eased were operating previously Wholesale prior compared than with to price

to turning million Retail X%. our the $XXX quarter to in the segment. Sales at $XXX million increase in of came compared XXXX, for of quarter an Now second

quarter, X%. at to strong sales reducing lower by offsetting inflation-related the sales second primarily solid store the fuel pricing. remained comparable net in due Our momentum the in X.X% prices Partially same-store quarter, were sales

and benefits. conversions; our the and of returns adjusted lower Four, Two, EBITDA gross to: $XX.X Retail Three, increase our million to profit in million operating reported prior innovation; was $XX.X This quarter. marketing pharmacy year on was million Retail a in volumes, success second rate; One, increased quarter from increase which market higher remodels $X.X consistent the reported The due banner margins. XXXX, are earnings and strong store quarter. trends of wages operating in million the lower by and offset to compared partially of reduced loss with $XX.X

balance sheet. to our Moving

operating X.X ratio year the year. and to continued driven the flow. of basis strategic improvements. earnings sequentially year, on plan. million half to to million cash times, giving the our cash of by to $XX.X this from we from net liquidity generated million, prior support period. And $XX.X remains was adjusted due activities, the points activities to long-term our In improved to delivering debt strong, compared the $XX.X Our XX compared In EBITDA us first was inventory quarter of flexibility first quarter, increase operating strong by focus second This in cash primarily of

we half paid more in of the $XX dividends, common $X.XX cash per first the to year, million than equal share. During

of in as $XX.X And shares for quarter, Company half million In to the the shareholders We also we $XX.X approximately second bought end over the of total, share million back have repurchase of our first remaining of on total returned the a authorization. million. $XX XXX,XXX XXXX.

As and EPS transformation our from release the initiatives. we guidance operating to adjusted adjusted based benefits our outlook reiterated positive to date, and full mentioned, on realize performance from earnings our our continue EBITDA year our we

we continue that range We expect to of the share. be million $X.XX our of $X.XX $XXX adjusted to And EPS in to range will the continue to expect adjusted million. in $XXX to be per EBITDA

Today, we changes to year mentioned $X.XX I slightly reflect guidance billion national account lowered to sales from the $X.XX demand net that our few full ago. a moments billion the to

despite revision, However, our we in confident this to remain maintain profitability. ability

and made website. deck, the initiatives comments, strategic our Tony's to This significant echo refer on go-to-market we we've in our further To with goals. which slide tracking, transformational confidence are how are our our achieving posted strategy. advancing the progress our in step see bolsters planned on launched benefits is and supplemental please plan long-term X our To long-term

now, I'd Tony. the over turn call to back And to like

Tony Sarsam

three plan, of delivered a implemented close years, record adjusted Thank transformational built share, recruited team ahead our a grown long-term initiatives. about and customers, have you, to growth Jason. also the few of and than compelling EBITDA. won strategic I and turnaround executed thoughts and story culture In us. we people-first talented have with developed and on less a We've key want leaders, we've we

are With to grow. accelerating this progress, we our capability

ahead continued scalable about of growth optimistic the We driving for growth. the a this to results center on on path at business the our shareholders. our and we model trajectory to confident a we on, as have recipe. of days continue a so I'm winning focus profitable with I'm And all sustainable increase execute in value highly are is

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

Operator

first And Charles from our today question Instructions] [Operator Cerankosky with Northcoast comes Research.

Charles Cerankosky

everyone. Good morning,

opportunities With in inflation buying abating, business? forward you wholesale anticipate rate do a to the return the more normal

Tony Sarsam

activity price believe requests requests. where a obviously Yes. and way the is in pacing number years have those out the more in find in on we that price situation normal been We our coming price been of might off Those of last -- have And the couple have we'll more as -- normal a leveled of requests. of terms extraordinary we're from flurry number ago I of situation certainly, ourselves we Tony. with think place. to Chuck, year of I we and down. leveling the here, the this back that

Charles Cerankosky

And to profit does gross due that buying? the wholesale for what forward in mean benefit directly the

Jason Monaco

Chuck, this Hey Yes. is Jason.

think So of the a we of about talked that prior we've way price quarter. inflation-related about wind year is got last down the I which it gains, lapping

on to or volumes entire we We expect that to more ability those in as continue weaker benefit to COVID on a capitalize promotional headwind vendor last spending we'll a forward have community to to as face And the normalized year. that buy we continues promotional across continue industry, ramp or environment. buying into capitalize opportunities up the did with the prior investments from promotions,

of total, wind but it a we price as down have piece the to for So, forward. margin-enhancing a benefits year opportunities It wind change at of last business from in see growth. about drive if we of programs the and up profitable a its activities. going But the think necessarily you one-for-one, the we'll entirety a and to promo look in be won't look it continue

Charles Cerankosky

store well as what sort you you're both seeing in Wholesale? Retail normalization. as comment of So, in brand in And your a segment sales, could on

Tony Sarsam

national brands? positive quarter. basis. collectively a nice brands negative that our our change we net For were because EBIT brands saw outpaced own grew national Yes, for a brands own -- again on and We net the

the continued significant to growth of brands So, even as after which had we is that grow see a for products vote continue our last really growth we year. own nice we confidence of there,

So, we're brands. about there where the again, decent and great brands we seeing national own versus feel our growth

Operator

Your next with question CL Wolf will come from Andrew King.

Andrew Wolf

start and on you -- I to was volume you wanted core maintain sector, that whether share. understand decline asking I the Wholesale market the --

is we national the implication I'm rest driven portfolio that of by side, of sort be national just or trying the was if at the customers sequentially, volume the portfolio -- So, see to market? or sort demand if down, core there's of the it's less that even change in more account, example. of with margin if the should improvement account, any on down for the the the it's down on

Jason Monaco

that primary you've Jason. driver -- account. national This Andrew. we the morning, conclusion miss drawn we Yes, was Good right of is see kind the versus the what the of thought quite that Wholesale our X%, volume than of call unit were industry-wide kind that mid-single Outside favorably decline units less an to down digits. account, of of in marginally, national business it, which compares would

the our we So, about in when segment we think it, space, customer. we grew core one in space, and were with in Wholesale account military share challenged our national

Andrew Wolf

Okay, great.

So quarters side? in X% outperformance, in you could still than of kind or side that improving grocery quarter, grocery into down and doing the I of is case, the better X% than still any -- lot previous the was a this less coming sequentially? Is the core way think that the the military say

Jason Monaco

in that of export military particularly business, the our work saw experiences to off the customers past. repositioned solutions seen way. to and to on we've to own it we've see work start demand ourselves that profile, them standpoint, continued along And seen portion to closely the seen customers food what With together help and through we've company, the as the characterize the with we business strength we our And channel work slight growth related deceleration we've we in is to as pay that win. from those leverage a drive to independents. to our with a of of And stabilization business, trends our rest growth globally. then the a the similar I'd Wholesale Yes, of as our retail

Andrew Wolf

Okay.

year one inflation missed in on from Wholesale -- might Just off or sort business. this, accelerating? gains ago holding -- comparisons, I this when that a period? still And you are so -- Like have to of we is did year the the for the but quarter when more that does cycle are with begin was ago toughest

Jason Monaco

question. Great Yes.

last record naturally, that quarters on all they're -- we all a to to forward. we build going had expect tough continue So, year, record because they're and performance

we wind-down quarter. in we in further from this as speaking, biggest generally about So the QX, year had we benefits change expected through and middle the winding headwinds the -- price year, a of the part prior price-related inflation-related and think down fourth

thought look probably back If expected. of what and quarter later quarter. inflation how third in faster step I seen rates expected and the the inflation would at second coming out, have played kind we we declined what we We've in through for coming it's be than

significant the a more facing comparable and still expect in a so, in second we're third I from the And quarter. headwinds the in standpoint, fourth. wind-down

Andrew Wolf

One a Is inflation. for helpful on sticky other could transition contribution follow-up items impact inflation has look there the you different and/or any more little retail your it’s both of to in in us and a you unit in disinflation segments. versus pricing? if two at better things, Wholesale deflation a sense because little or that Retail could, there's slowing answer question, give I They you're Is if segments? commodities might phase, and more that dairy, on some poultry, get deflation on since -- impact of of the is a your in whether chicken

Jason Monaco

was to exited both it in mid as I sitting filings really from end digits. demand a to There differential From in and an at wind of what really low-Xs changed. seen we rates as where seen year we isn't segments standpoint, end beginning high and between the the Yes. low in inflation kind high-Xs, And big look public in inflation where It pretty down from single quarter to hasn't was inflationary our quarter the in segments the last the were -- the a the of standpoint. this the of public the this we've of two kind of were quarter, a across mid-teens general, data, you've of we of close.

So, our we're our shoppers and our our and seeing slow, seeing as as we're price to the in drive our increases offer compelling stores. through provide possible performance stores we and customer pace to customers customers help volume that and price of pass as to an

Operator

And our Scott Mushkin from RX next question Capital. will with come

Scott Mushkin

Thanks my there thanks ago. weeks questions. a Hey us And for two out event. guys. for It was taking great having

about shocked the a someone the supermarket a are down. if I I price deflation, increases. and the bit uttering us just how fairly by actually place us to we want didn't get Remind little think, D guys you there's word, it So, to climate knock that facing. company, large did where talk call would on A perform business or your they no

Jason Monaco

Yes. Hey our here Thank Expo. a you I of And appreciate to having out couple you have great you. Scott, in weeks ago.

So, seen this does up ourselves perform? as our and and the how down of We've even on deflation market in business in We disinflation resilient current commodity some environments. both see cycles environment, you notion move they the industry store. know, And And fresh in the unusual products time, quickly. fact, being around a goods. particularly and quite aren't in areas of deflationary perimeter in as the long

accustomed and right right segment. and for and that right the Wholesale our we're consumers the value customers we price to downs, our the points So, equation value and quite through ensuring getting for ups those buy our through who managing have shoppers

Scott Mushkin

the We're the seeing? it What promo think but seeing seeing or Jason climate? guys is back putting are that you parts certain in of investing. at like also their risk CPG, of country. pockets I looks P&L kind are that. retailers answering was Certainly, are What coming some of in from And own competition more you

Tony Sarsam

Tony. what is So, you're I think this -- seeing

been growth bit excited stretch keen look we had second the promotional them as seeing activity promotions in promotional little definitely, our and more the our there's to well than to and a their activity. more. get offering continued We as opportunities as So in we're offering more that the about more first, for quarter ways did well there's quarter we consumers dollar in as took some

obviously then So, pickup we into quarter. the the little we worked for them it with has drive well traffic into aren't ways the previous promoted. all see versus promotions, We quarter. get as saw that folks those that foot actually store reasonably to And bit unit saw really us and better get the a important last items other asset and

well. And marketing have we So, more working. of our that's activity similar with and people we're other think informed think competition. our also -- we've to those landslide involved a promotions, tools appears that digital seeing it work done but going the in promotions to I really wasn't And was It on it with similar and is more. get definitely working

natural So, environment. I of we right where guess in outcome that's overall now a are the

Scott Mushkin

had just one I then, last one. And

wondering driving guys you I lower incentive And obviously, but what's wage benefits about also that is? how and both lower comp overall And was to continue in across think and repeatable talked rates that retail? retail. wages I climb just

Jason Monaco

about is a Yes. Scott, the this variable think way it, I’d comp.

positive So this last was seeing year, those not. plan that look a that you're figures. above in year-over-year, variable organization. at relates to -- cascade through to last running labor comp we our as retail wage some when the comp the variable that in year, And year, Even referred component we and the component result, comps you it's

Scott Mushkin

reason better or it mean -- for what's below it you're that coming is little in the on be your bit Does variable? to a plan, the

Jason Monaco

last Yes. little of being combination this below bit It's being year and year a a plan. both above

Operator

Our Markets. with Capital next Kelly comes question Bania BMO from

Benjamin Wood

This on Kelly. Thank is for questions. Ben taking for our you

thinking the around fit how or could forward, about generally agreement. hoping time to changes? a Amazon, there is fresh is does Just provide going lead couple changes of risk Trying what to upside And more Amazon then clarity into long-term to a demand little you The to sales visibility or determine how your start. guide? comments from you're those your

Tony Sarsam

Yes.

on what they they're time as of plans have pretty -- to learning get make. the to -- business. forecast closely about what's with with lead we what So, work are They goes, a as as them, Amazon can the we determine, going their -- far best

extraordinary an time. not lead it's So

that but way rate much get tools in So, not have to servicing between of you make have a situation inventory. we fill have the we and with right we them, great us place that a getting product and -- right obviously sure in and the getting too where have we them

So, business. together between on us things I their we're those all think and learning Amazon well work of as sort

Amazon They're customer. is great a --

And continue so and we going to with -- to of business that business part work be sure to we're them their business make a their plans. productive could can their

they've a their As little in bit flux. recently, business plan is announced

So going doubled partner down sure we're they've that them also and journey. player grocery, to are a and in so they want in going to they be a for be make to great their

Benjamin Wood

$XX expect that last Was or Okay. outlined see that that the That's that? you million benefits a on the just $XX of savings. on strategy, helpful. of And clarity that then P&L? the of plan maybe in incremental decision million guys cost million quarter? drove where think previous we refreshed to go-to-market is in I the kind behind And should chain And that the supply $XX what to to then

Tony Sarsam

Yes.

So, I’ll have a question.

all, we that wake the to could focus, first of a we on on from functions and our overall we past the been So an some activity ways really mentioned the forces some in we've combine laser-focused our largely be some And earlier, as an a the streamlined of where of the look so working as quite structured that's while, a opportunity M&A strategy and we it's were combination, why and and mentioned getting them of for earlier, efficient more of at with exercise had customers. more where And go-to-market. make organization effective. heavily was so serving in taking sort

are serving who customers sure our team, that folks organization. make of sales with the all our to ways, want We customer that are in part

customers And we customers. information so, think -- again, actually we us our and that's our of really, along well more serve contact for going with forward. really efficiently, for passed the get work we we get ways have points as innovation provide to to and great simplified moving find And we

of retail, an of with as overall both -- it and from was for So, organization. that's sort marketing sure from the we that between of through -- of the right from kind really the team expect and previous to rightsizing element the well some and sales go-to-market entirety thinking get merchandising as M&A of growth make

And as in the savings, plan long-range the far as about. was previous that it talked contemplated fully we

So, transformation, but necessarily for to it $XXX of the chain, a our supply overall part it the million. of build XXXX discretely wasn't was part a plan

Benjamin Wood

Great. That's helpful. one And just if more, then, I may.

expectations? you forward? have expectations commentary guys profitability promotional what your relative called strong, earlier, outlined? higher up us sustainability what the plan of Retail tracking at the margins. estate And Retail what's Just the was on the Wondering kind environment beyond progress those maybe out the gross you Kind of just was understand some going And and to help of following and that? of strategy drove real is remodels then, how or promotional your the -- in

Jason Monaco

Thanks the this for is Ben, Hey question. Jason.

segment, The improved job loyalty establishing we've the marketing engagement made a and a communities. with highlight the I remodels, customers performance XXX we've done just banner seven the We really in So, driving Omaha but those and it's in number I'd on converted conversions. Retail in our results. and seen team also if stores growth. stores fantastic good driving those I'll the feel and did plan, things, the the of work start and in a market, banner We we've with remiss and investments terrific what's of building double-digit and be our conversions didn't our about shoppers,

course, that and, it right of we've to addition right balanced from In price promotional have ensure hard in assortment, a worked our the that, the to stores we points, margin standpoint. activities, the right

have we improved. us stores, has the than delivering in our or because the price a better shopper right see improved traffic. led improved points, right Margin we're margin proposition, right service heard which collectively You winning assortment, the to market and

for our rest experience we creating markets, with us. shopper outperforming of filling the their pleased being proposition the they the a in see have So, and traffic very and is significantly market in our winning baskets the those store, shoppers getting

all solid and, that together tough investments, rebanners, structures a to performance that the is pair market. remodels, growth the improved You what's the margin contributing with from a frankly, store capital of in standpoint

Operator

we'll next with Saleh And Peter BTIG. move to

Peter Saleh

to operating want expenses, quarter. come much this what which were to back I we better were than anticipating

about was comp we of guys terms the supply lower year? just initiatives the the buckets in And second terms that the of much half that how on think be you in restructuring. three and should of each basis help unpack I and savings? thinking Can outlined in chain you how a us year-over-year bucket really going incentive and in forward

Jason Monaco

Yes. Pete, thanks question. for the

the chain start standing to we're have as we and transformation. -- behind unpack commitment supply you on commitment, that So, that, a

expect deliver we're this chain in at well from million improvement that supply that's annualized and $XX playing We're $XX our million role way We that our significant rating to a on level, front. year on and in of to benefit run transformation, OpEx.

comp is things we role call. variable earlier in playing see the a we piece as management. second the expense And mentioned those together, that The our significant overhead in

roll to bit end little be strategy of Collectively, changes million the of about our basis, on we but run the rate fourth and will there by as pickup there. go-to-market least, Tony a little the a that OpEx go-forward we've in that Last but bit $XX we not expect quarter. the see talked a the year, made of into

Peter Saleh

Understood.

I just then long-term pulse by guidance take your on the XXXX. And Okay. wanted to

morning EBITDA. of reiterated guys this million $XXX of I think that you

get there, get you the another given top to your Just I more can modest top Thank your How are mean the sense that? in down that number? EBITDA wanted step thinking and you still guys line, we line, if to confidence you. about get

Tony Sarsam

still but as terms of about environment, times feel out, overall you great overall certainly, it's pointed our the these are challenging plan. we Well, in

macro our of lot a transformations. -- marketing transformation we've moves mentioned, merchandising was on the doing market. the movement, about, just the done important have built in to And but chain the in work We in plan these go and just that the well environment not all work, really transformation we work the supply ones as Jason these other as we're innovation talked

times. in supportive macro those as all see elements to resilient we even help be So us being more tough that

and feel there, about we really be So, that. we good said we're going to

Operator

And Bank Katai will your with next question Deutsche Securities. from come Krisztina

Jessica Taylor

ask on about Taylor for Krisztina. for Jessica business. retail per transaction I is units your your to wanted This

inflation a basket? in corresponding Just the in seeing you're see you wondering, increase as falling, if units

Jason Monaco

What standpoint. the from of the we've foot a improvement in and is seen in dollar performance both size basket and traffic

I we've As together the back inflation, the with quarter, grow baskets to second and with to continue look pleased been results.

Jessica Taylor

that And Okay. talk they you your where expected, rates and to fill a are right you saw rates. and bit just you on little pre-COVID? now, the your inbound are hitting outbound are then, about another question what levels they back and Can fill

Tony Sarsam

All right.

fill our where rates fill points the be than what -- ahead right suppliers. our we inbound to of or in terms both our So, performing expectations are our now, what now, XXX believe probably basis plan -- from XXX from get rates are of better we we're running we right was our

of ahead they're pandemic. To -- It's where were about be And question them back where great. clear, now, behind. the be they they're they'd but right your we see they're thought before way do when still not we coming to

-- We getting in and in XXs, fill that those have were are we XX, XXXX, fill were now. in XX. running mid-XXs the the right XX, in been high for rates So rates the example,

for slow road back the it's supply a So group. been

of our Our as experience. terrific shield and or job that can it from team a making sure has here mitigating that of done we customers sort that best

stores see fill in rate we great So the outbound. on are the shelves is

terms favorite my are of delivery of One stats delivery. on-time outbound in

suppliers, coming delivery we at is what in Our out the our still ship inbound XXs. from on-time in XX% high is XX%,

of So, our what they're effects supposed those they does some customers. do, from our shield team to

feel feel to good to this a to the We rate long be we point. were at Still fill that where fact way on we're ahead in the So that progress. go XXXX. get about where expected about to good we back we

Jessica Taylor

speak you. to? you of CPGs there that in are the terms are changes with Thank finally, promotions can work or -- then any that that funding are And more seeing days, seeing just you these on promotions, you you

Tony Sarsam

price central the and for of our and customers a of points was is our the for shoppers. merchandising our -- element right transformation price to kind right get exciting That

our so, on stepped that. And community supplier big up

right we in a points enthusiasm, of seeing marketplace. price we’re So the are those out getting lot

and that. last been -- this stronger we quarter were I a quarter -- they stronger are they last they are quarter as ago, mentioned were before than moment say quarter I'd than they've the

we as on grocery it's we'll got continue the and see believe. But, natural think see we've to with and store. a great partnership I that that suppliers more movement, that. energy So, been get our And to we into try more

Operator

take Charles Cerankosky question Research. from a with now follow-up We'll Northcoast

Charles Cerankosky

the independent shares, as terms of would channel Retail how as view and the health you you in some M&A bigger have Walmart? retailers. My to expand them segment? of club And gauge follow-up How market gained competitors your Spartan's opportunities such do their involves

Tony Sarsam

they've continue overall in their well. as with work X,XXX few and these far to years. as done tremendous I very one of They a grocers So, perform just our was health, resilient group, are last to do how and continue them to they and their have fine. yesterday. what They understand they -- fine. really those is really They -- going inspiring they understand communities, they're really matters to communities independent do

of the as to far I'm what -- unpack little question? that trying Chuck, part bit. your was As a second

said go our that on Can how retail. about something little further that? you You a impacts

Charles Cerankosky

As to Are looking Retail part through Spartan's the out? segment to case they M&A? strategy Spartan’s sell to still want still grow of acquirer be you in

Tony Sarsam

Yes. it. Got

about if you current of growing going of growing include So more are we business and business. growing share more growing can stores can very on be together, to grow terms of aggressive meaning our current faster they It we growing base grow share M&A. great there, That in that growth the current growth, pursuit. are providing solutions with customer focused think includes and and overall much the for and will our that includes and our customers business, more our Wholesale our taking in

And grow so the for to and to work things together grow those us plan. all have we way

So, you'll things see including that you just working, mentioned. those all M&A the

Operator

at Sarsam remarks. are closing now I'll call there back questions for the no this Tony to turn time. And other

Tony Sarsam

Great.

So, overall. that for our call wraps today up

your for you, all to like And a your want day. questions. our your you interest we great participation everybody. thank offer today. family to yours, of and pleasant I from you So, very Thank rest thank the to everyone for

Operator

today's conference for call. you This concludes attending. Thank

SpartanNash (SPTN) 17 Aug 232023 Q2 Earnings call transcript