SpartanNash Company (SPTN) Q2 2024 earnings summary

Executive summary

• Net sales for Q2 2024 decreased 3.5% year-over-year to $2.23 billion, with declines in both Wholesale and Retail segments, and net earnings per diluted share fell to $0.34 due to lower volumes and higher restructuring and asset impairment charges.

• Adjusted EPS was $0.59 versus $0.65 last year; adjusted EBITDA was $64.5 million compared to $66.1 million.

• Cash from operating activities rose 166% to $132.1 million in the first half of 2024, reflecting strong working capital management.

• $30.4 million was returned to shareholders in H1 2024 through $15.1 million in share repurchases and $15.4 million in dividends.

• Piloted a Customer Value Proposition initiative in Retail, lowering prices on 6,000 products as part of a store modernization program.

Financial highlights

• Gross profit for Q2 was $353 million (15.8% of sales), up from $352 million (15.2%) last year; gross margin improved by 60 basis points.

• Adjusted EBITDA for Q2 2024 was $64.5 million, down 2.4% year-over-year; adjusted net earnings were $19.9 million.

• Operating earnings for Q2 were $26.1 million (down 27%); net earnings for Q2 were $11.5 million (down 41%).

• Capital expenditures and IT capital for H1 2024 were $73.4 million, up from $63.5 million last year.

• Net long-term debt to adjusted EBITDA improved to 2.2x from 2.4x sequentially.

Outlook and guidance

• Fiscal 2024 guidance reaffirmed: net sales $9.5–$9.7 billion, adjusted EBITDA $255–$270 million, adjusted EPS $1.85–$2.10, and capital expenditures and IT capital $135–$145 million.

• Long-term plan targets adjusted EBITDA of $300+ million by 2025, driven by transformational programs and acquisitions.

• Management expects supply chain and merchandising transformations, along with go-to-market strategy, to favorably impact future results.

• Inflation expected to remain modest; national accounts to stabilize as Amazon headwinds lap, while military business continues to grow.

• Broader rollout of Customer Value Proposition planned for 2025, with learnings to be shared across wholesale and retail.