SPTN - Earnings call transcript Q4 2024

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Operator

Welcome to the SpartanNash Fourth Quarter and Fiscal 2024 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Kayleigh Campbell, SpartanNash Head of Investor Relations. Please go ahead.

Kayleigh Campbell

Thank you, and good morning.

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 the By at access everyone this morning should earnings now, release, was issued approximately to Time. Eastern

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

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

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

Tony Sarsam

be Thank you, everyone. good here. Glad to and morning, Kay,

win do, our people. both in on normally to the call culture performance I our people-first and a is start today's SpartanNash to of would our with culture we like grocery. harnessing As focus power

During XXXX with hall, provided we associates a town our of details recent plan. our Action company-wide Master

point with our proof disciplined our on new culture we year. cross-functionally the our imagination our will the with results. XXXX, with new to by Finishing working to within to focus things are every every have Since KPIs the to mission desire also get overcome finishing and to reflects the done XX-day our One plan. yes, We say rate possibilities, improved a by sheer we safety obstacles goal and our haste discipline that XX%. mission requires for explore the progress remarkable people-first with strategic hire safety. a in retention exceeding X%, has XXXX, improved nearly And do drive

digits, expect industry, master to the in innovation. our the is into element Before our provide market capturing Inflation some industry. they geographies center promotional food grow single about financials, conditions our this providing what jumping key at around largely One pre-pandemic at at of plan and want around solutions grocery through SpartanNash XXXX. essential action on of low to are Overall, the returned grocery share. rates sits X.X% in were has industry XXXX. to in color I overall we

many and of Our work, synergistic of We've to I this highly retail. core want still complementary, opportunities and our incredible of thank This team unique is and space. being wholesale between of difference a ton is having the all ahead, done leveraging journey. segments, for insights us a in associates X but part others have the

billion, at a the of to to compared increasing with strong, momentum stores sales X% existing sales our XX basis from finished the year delivering prior net We Okay. we consecutive than sales to Incremental than some to QX increased than little sales In offset growth more the of points returned adjusted year contributed to retail, year. our our results. record points experienced $X.XX we basis year within net third full softer billion. down made EBITDA. we more our the Though gears stores. Shifting our to were in acquired of sales XXX the $X.XX acquisitions XXXX end in The quarter. demand over slightly than year more less

comp We QX. are the had we've positive in retail our the very pleased comps newly largest XXXX, Notably, ending sales of positive X market, early the sales performance From year progression our a of stores. decrease comparable quarters. comp standpoint, a throughout with a sales X.X% in acquired in last Michigan, with seen

which independent and national Net over wholesale channels wholesale. for our includes Turning accounts were grocery military customers, sales business, billion. to $X.X

an around, and we now serving this accretive in business, with avenue consecutive we organic sales to that very additional unique of pride XX team a forces was results. our veterans, to Along have military able great quarters. is is This sense grown channel's the having as of it Military for channel also be see turn consistently growth. generating this pleased Speaking sales continue for performance. with a and channel armed our

we EBITDA year acquired our expanded Okay. basis in stores. increased margins, expectations to relative EBITDA one, third points. due and recently by more contributions We XXXX, improved we XX accomplished to exceeded to from billion; retail wholesale We over our of year prior margin our generated QX with a DC the in efficiencies more results, net sales in $XX Pivoting by and adjusted two, than context by XXXX more consecutive in have, little new adjusted the coming give EBITDA network $X than three, Notably, of bottom adjusted And you in our higher adjusted million; to made the we at X% the quarter. record our to EBITDA improvements line. compared profitability increasing $XXX million.

I Before I over and turn the strategy our M&A. an both retail update provide Jason, to call want to on

the to within morning's you this the I we on opportunities discuss press goodwill retail but As charge a focus in segment. will quarter. took release, details, impairment saw in the Jason the want

leaning through to growth These by stores; inorganic growing initiatives. leveraging store retail focus into platform conventional vectors Hispanic capabilities attractive in convenience two, XXXX. in and a and store on: footprint select organic implementing capital the our ethnic deployment in markets will remodel expanding are our food our We three, and capture one, the business our growth sector; upmarket into

we customer As last year, value you launched proposition. recall, our may

as are leadership brings his last to in you the implement now Officer, begins new in taking operations call. wealth on our retail plan. other Retail some introduced Juma a our We look more into our program about of Juma months from strategy. recall, pilot and the implementing as learnings I details transformation We and Barry, Chief retail experience stores. Juma the providing and earnings components forward Also, segment's to knowledge CVP retail of coming may

Now on retail to acquisitions. our recent

are with As convenience the very I performance stores grocery acquired XXXX. in and moments a the we of mentioned few we pleased ago,

In fact, these in forecast stores QX. outperformed our

evaluate and M&A will small, our based M&A to we to to overall. opportunities, on ahead, segment continue both improve continue framework retail the large Looking

We and are greater taking inorganic now maximize over are a quarterly to you balanced walk shareholder results the call initiatives, XXXX designed through turn the and to approach value. improve and detail. to outlook to and organic growth all in With financials Jason methodical which that, I'll

Jason Monaco

today's us past of include: $XXX.X one, $XXX on These in adjusted plan of programs, successes and plan joining progress our benefits, transformation, the to strategic which $XX giving in still strategic detailed XXXX; $XXX,XXX; our repurchases $XXX includes we of Tony, schedule. maintaining share marketing supply that margin-enhancing before with plenty million net we total our target EBITDA a liquidity, initiatives. cash us XXXX, year These this planned runway million work generating activities, four, go-to-market strong to our compared a quarterly jumping almost ahead launching Thanks, million from benefits organic We million support since in achieving have record drove of key long-term This year to initiatives. highlights I million Notably, and two, the to year, inorganic earnings approximately chain dividends; our $XXX highlight have transformation, call. our past from returning made million of fiscal also everyone of $XXX through with a innovation margin-enhancing and achieving XXX% three, both ahead nearly $XX welcome generated million XXXX. significant want plan into and flexibility some on increase results. shareholders in and operating represents to investments. merchandising to in

In plan. fact, recently leadership we new cost a implemented

are we pilot, center. This removing labor successful an and inventory using robots is in manual a flight processes system selecting hours. largest our already solution streamlining certain Following implementing innovative distribution in automated

pivoting finished the quarter versus by We to results. strong sales by XXXX billion. to net quarter year quarter increased fourth in growth. our fourth $X.XX $X.XX billion the points XX Consolidated back basis of to sales turning Now

our fourth in quarter net basis sales million year's $XXX than Wholesale transformation XX.X% our of we or XX.X% for While increase of those more incremental compared profit volumes in or quarter. segment. shrink experienced prior trends increased merchandising offset with $XXX to reduced sales segment, lower expense. The by the benefits the sales Gross to pricing, million driven XXX point was we and Rail net margin in

million provide expenses retail wanted impairment the Tony charge to on moment reported more a to charges. operating the Our $XX.X color notably related that impairment mentioned to included I goodwill take earlier.

have improved acquisitions and performance portfolio, our the in some profitably. improve our portfolio, to led retail our grow will business. We the acquisitions legacy with the evaluating impairment by recent are While our underperforming us we and process that we our the subsequent is retail retail stores. goodwill of acquiring assets continuously impairment, existing of To the balance closing driven that contributed operations to further Along that stores. are the the underperformance help scale believe

Okay.

year our million $X.X $XX.X primarily share $XX.X net Turning QX $X.XX diluted On of Compared the our diluted compared earnings recent in to year. back $XX.X per expense reported an to basis, related million per to to interest borrowings adjusted This increased year or acquisitions On increase $X.X was an million last a to increased basis, net our and diluted or to million to loss due partially quarter, quarterly prior investments. of offset the share. results. in capital million year the earnings is increase benefits as net well health per in $X.XX from $X.XX And in higher from transformation, QX The acquired margin administrative higher $X.XX driven by finished the volumes QX to Wholesale lower increase EBITDA within costs. $XX.X of including merchandising rates year. we was the contributions and increasing as retail expenses. segment stores compared by compared case adjusted gross share lower prior million, to corporate recently was with the insurance in segments, both last This strong X.X% notably, quarter.

our to retailers. rate former independent profit customer and reduced This our of the of quarter, in retail net million. decline operating represents $XX.X prior fourth decreased results approximately X.X%. sales. Wholesale the some turning gross transformation to X% accounts fourth These The year's Compared wholesale X.X% year's primarily higher to XX.X% the by were quarter. wholesale elimination to is Wholesale includes national initiative. case driven decrease to certain performance reported intercompany a increase acquisition, were segments. adjusted $XX.X This last compared prior components, improved accounts the a million, to of which an Wholesale a from a earnings in segment the recent in with sales EBITDA million, and $XX.X Now the wholesale compared was due the quarter year segment. reported to $XX.X and national volumes revenue benefits customer merchandising million was movement of encounter related of Fresh previously in the

Retail the to Now segment. moving

progression for quarter. As the were the Tony of centers million Retail X.X% quarter. XXXX, fuel seen year sales in And X.X% sales a year ex segment supermarkets the up positive concluding grew prior The versus prior a comp $XXX mentioned, compared quarter. X.X% decrease the our with to we've year to throughout

XXXX. $XX.X we XXXX EBITDA As to With compared an prior loss million demand mentioned, sales of fourth from higher adjusted volumes, health $XX stores to the offset compared to the contributions quarter. operating of $X.X $XX insurance year's costs. that, reported softer million sheet. acquired balance quarter let's million was Retail to in rate our turn improved to the the million in improvement more than earnings quarter. The sales margin Retail and in due consumer the of in lower increased

EBITDA increase quarter. the Our we fourth due fourth increased made to quarter. debt leverage quarter of The acquisitions in ratio the to to X.Xx at end adjusted of net X.Xx in to was third the the the compared long-term

activities largely As nearly during I funding integral capital due generated from year. to XXX% increase of earlier, operating and The million working improvements mentioned has $XXX we cash been inorganic was the growth. in

plan us giving $XXX at strategic quarter liquidity the end with fund Our growth the our million, the was M&A opportunities. capacity flexibility of to pursue about to

strong will continue feel results. to that Following we plan our driving finish a the year, confident

incorporates we fiscal date offset release, have that realize ongoing press industry, to from XXXX, grocery today's performance our challenging benefits for and we include been in our initial market guidance which items our in which the to the are providing conditions covered As transformational partially operating by initiatives. the several expect

tuck-in As capabilities includes we long-term an XXXX. that a reminder, of acquisitions our and outlook additional initiatives this week fiscal plan, impact invest deliver in execute to To and our the in shareholder value. continue

As programs. mentioned, a build will I launched leadership that margin-enhancing the previously success recently cost new we on of plan our

cost to weighted begun, in already expect the in and we first investments have invest expand to growth year, more on enables margins. us focus This throughout Our leadership the continue them half. and year's

this last QX round equal run value rate compared about in We as margin-enhancing maximize of QX's to programs expect invest be line exiting new bottom to we to year's XXXX.

Consistent XXXX X.X% to net November, million to in growth. third preview And billion release be the $XXX million back our to EBITDA to with X.X% midpoint provided $XXX expected a expect the we growth. we with quarter is Turning adjusted of ranges. to midpoint be $X.X earnings a guidance $XX sales with of billion in

For a noncash have expenses, your expected about D&A, primarily are drag EPS. on models, to $X.XX

We per our driven impact by D&A part $X.XX growth made to adjusted diluted our strategy. The EPS $X.XX of share. is acquired to and deferred we've assets investments capital as expect be

XXXX, this outlook a acquired $XXX million, by an annual earnings On assets, compound $XXX rate expected food ongoing million, Achieving net we fiscal the growth margin about flat. Our $X.X X% EBITDA deliver would since requirements and year. to recently inflation essentially to million to in decreased be capital expect net approximately while basis, is X% for range CapEx adjusted XXXX. for of the compared of inclusive be reported was to of

pleased XX billion, basis net sales back call by by And results. margin To EBITDA been to the with earlier, over $X EBITDA XXXX, to that, reiterate turn expanded comments our However, and we've over I'd than to relative Tony's adjusted adjusted by million $XX have increased we more points. like Tony. improved with

Tony Sarsam

Jason. our inflection tangible transformational returned meaningful an progress in you, We year delivered past at and and results journey. to This point year-end. Thank growth hit

innovative and adjusted working. We new our cash EBITDA. additional we and that flow cost efficiencies our retail year X new created also savings, completed our in consecutive into programs, improved tested margins The strong accomplished plan acquisitions, third distribution network, record have momentum captured is launched XXXX generated confidence of and going gives us strategic

Our winning will maximize guide bottom grow line and drive recipe right. value. share, to our capture All results, market business, new shareholder as serve win

call to for life would growing finish for associates. a turn to that, commitment associates to open our open I careers like who With the I'd the Q&A, operator Before going like of I'd your are questions. every and mission. for it to a we all. for and you call for steadfast take over the to back up better thank to Thank beyond above creating leaders our our also family moment thank like their to

Operator

Instructions]. [Operator

Markets. Your BMO first Wood from question the Ben comes with of line Capital

Benjamin Wood

So out the have can start parse customer any if from of and some that? within Just around customer cadence guys softened? puts can we trying the was a national happening you demand you quarter it volumes Or know stable? kind with incremental and but the and some pressure, behavior? and to takes acquisitions provide account the with inflation with I perspective? underlying details sales Anything quarter-to-date

Tony Sarsam

Yes.

I'll and perhaps. Jason color some me, add to let ask Just

our and most was conventional in roughly flat our So better we saw from traffic standpoint stores, grocers. foot than broadly a customer

story more has there's XX that been see -- deep of months the migration last the a So in to discounters. the really we

progress So we've seen progress comps. sequential on sequential traffic, our on

good overall direction feel where about we the of So going. we're

we feel our in also that customer, customers. our we good the grocery primary the So stores, about see independent shopper about progress great with and

the in the there and movement So we're direction. seeing movement right

Jason Monaco

Yes, is Ben, Jason. this

positive strength within few we stable was Tony Michigan cadence that our business, retail comments, called in more the pretty minutes a Tony's really build comps, within our as pleased business. traffic, was, than progress that on that nice of which finished maybe outcome. and we we're underlying Tony label to but our private ago penetration, where continued really stores quarter performance which with half solid had on said, So not out the saw of represents owned only Kind our north XX%. of brands quarter

completion closed weeks delivered of cadence. solid of to So in the the in we -- add even a after last of that maybe or closure And the solid them. handful quarter overall, kind the of X quarter, solidly our I'd acquisitions

So we're really the outcome. pleased with

Benjamin Wood

single-digit That's just little my low strip guidance. a looks in dig math, to think that sales XXXX on maybe Is acquisitions, how Great. of imply way kind by growth midpoint. the volumes? which like it industry and basis? compare from And to kind the your wanted out maybe about And that you're does Okay. on bit the week to extra an flattish positive contributions EBITDA And and organic helpful. negative it then of expectations, we the the at right slightly if seem to implying

Jason Monaco

a XXrd the the color maybe is a less little little worth Ben, and $XXX Yes, than guidance. on The million. year week

finished $X.XX at -- billion. Our revenues we XXXX

step-up on see a were of kind the line you mentally the the that of top out back if you'd so million pretty guidance, the to at And revenues even impact from impact in sub-$XXX solid still midpoint.

intercompany transactions annually a our impact hundred up that. piece wholesale pick late we revenues lose incremental revenue, are dollars that by of in the of closed As retail million but impacted expected we year the reminder, couple as to the the a kind revenues of we

our relatively modest inflation. is that environment have in growth we organic an flattish We expect all-in where

we're the share X% this year. inflation And market assumption in our growth our pursuing at is point So markets. for about

Operator

comes And Scott Capital. the Instructions]. your of [Operator Mushkin next with RX question line from

Scott Mushkin

Yes.

Sorry, I was mute. on

hear You guys now. can me

Jason Monaco

hear can you. We

Scott Mushkin

Great.

you So ethnic in 'XX. which wondering your on mean more to 'XX, opportunity revenue us it's maybe there is if there. wanted what store the your bit Tony, 'XX, mentioned remarks, it was footprint little more and something prepared into details Maybe I could I to in the growth. it's not growth But much so dive expectations give a and you would

Tony Sarsam

Great Sure. question.

long run they're at time. angles, have where have well. in for We've Nebraska faster. years. a -- us, grow X where a been we've those ethnic And we stores stores the in They places where So different for way. terrific great else got we're performing margins in are have couple as could stores in And great of we that -- looking Midwest there presence a for

number amongst even And cities opportunities of at increased this greenfield this for well. or stores. where acquisitions will right, other of as stores Hispanic the you're our so impact current footprint or we on looking at development And can the brownfield at looking But a within look have year, long-term we're we have. either footprint an as we start-ups

have growing it of we and of We profitability serving segment. long community, that lot a in that terms ahead growing a it's also the it's in in those runway has a and believe both types of and community expertise growth stores, of

sites out to that, years. more So double got a We've grow got about and essentially footprint sub team looking then we're kind significantly the that. some that's and looking of excited in into year our and this are we've

Scott Mushkin

again, acquisitions of material? tuck-in just wanted with I kind is included to, more you something guidance. think Perfect. are adjusted Jason, that the EBITDA to go EBITDA that that in -- Is the rounding? guidance I Or then, back And said

Jason Monaco

guidance. the those themselves it in being way based think -- as way as But of execute our the we'll kind to tuck-in And point. think is is the XXXX about in value, I'd already Scott, and at about we we've strategy. full the near-term so on continue on not think about you this think reflected in completed acquisitions to M&A this remainder, material The create going what's of opportunities should the to are frame in those. particularly I and about present we're XXXX the impacts year some pursue

to think that retail bag made largely Scott, on build is speaking, got and completed M&A in broadly about are I comments in the smallish kind term, the Tony where business our energized When guide about already. included. the earlier. And the of think kind tuck-in our acquisitions by really of current long business, The to So we're -- way is overall, going. we've maybe,

the to about comp X.X%. had both And business, we about about as trends business. X.X% of XXXX, our the I really change think trends the negative in in that the segments our a as growth operations think as outlook comp the you operations. as that of to we C-store certain execution Tony of year, the of seen second comp look the to had we on XXXX, If as And half turn the first growth forward our well of nice or we've we're of in retail we in first expecting within mentioned our half the and platforms Hispanic -- within XXXX, and opportunity positive. progression In or half that see negative of both a call,

thinking most to we're most in And we going elements you're retail the how in can growth how drive traditional going value we that time. business. see of the about So things over that invest reshape and the our portfolio, the are to do

business dynamics vectors of continue going to of as to a we to build has really and XXXX to what XXXX beyond and market the going is growth be the respect growth we see performance great our and have opportunities. those you're X see we elements operations the in the attractive outsized You're in. where business, create we which participate going of think with see outcome. going to that And be in and momentum it to ethnic us to C-store demographics All on are in for

and in guidance of to the this the growth bottom our excited X%-ish space. would opportunities the us annual performance front the compound we're value. the capabilities, outperforms reminder, have many in X-plus year deliver midpoint -- shareholder And a grocery at the create by line we for since As that rate of XXXX

Operator

line of [indiscernible] question the And your comes next Northcoast Research. Arvin with from

Unknown Analyst

With past, So M&A more do in willing the with could. potential independent more go these in is improvement? pertaining were what of sentiment and they there you going to in because in have as just up economic I conditions, engage In where any looks and guess C-stores. a reservation bit little you're discussions while kind a talk things the of is. you the the color smaller be particularly of the kind sell the pressured and operators, see out to M&A they macro particularly that you shift some about to think was to sentiment kind C-store economy M&A market, on of just of might operators interest on some kind picking regards wanting of like expressed to some guys, what interest there for market environment get

Tony Sarsam

Tony. It's

would see We and are that are tell who and and for opportunities mix. very strategies you I run to active us. their full folks ideas are in a terms There is of looking things engaging they the There continue that folks as ahead, saying exit want looking business. great there's in those conversations they -- for to are around right for

continue. whatever. that around convenience seeing the going trend have That's that's think idea for runs one-stop is gamut. in base to snacks a What good to or able grow. is to going business, a The we the it that great operators full they fuel -- and this and picking to and being offer we're continue up So space

but time at there's And as great and again, us stable. we If the post are shopper over period how C-stores operators shifts as pandemic, have play shifts, the you for pandemic, of in that changed well. kind to the of of place a pretty good lot growing, a been see the look around

the kind runs it So of gamut.

more We past are things doing We would again, folks. Markham always the XXXX. you'd we talked acquisition And with year. this those of the expect in Group. of engaged see I types did with about us

Operator

to Sarsam the no Thank turn I questions you. back at call this for will Tony And remarks. now there are closing time. further

Tony Sarsam

thank Well, in call. in appreciate everybody right. for the All you to participation We interest today's your certainly SpartanNash.

our good to from like a day. to you pleasant very wish family all so we'd And yours,

Operator

concludes And today's Thank you. attending. this for Thank all conference you call.

disconnect. now may You

SpartanNash (SPTN) 12 Feb 252024 Q4 Earnings call transcript