SpartanNash(SPTN) - 2025 Q1 - Quarterly Results

First Quarter Fiscal 2025 Performance Highlights SpartanNash achieved a 3.7% net sales increase to $2.91 billion and record Adjusted EBITDA of $76.9 million in Q1 2025, despite a decline in net earnings due to higher expenses - CEO Tony Sarsam highlighted the strong start to 2025, citing record adjusted EBITDA, strong Wholesale margins, positive comparable store sales, and increased sales from recent Retail acquisitions as key achievements for the quarter[3] Q1 2025 Key Financial Metrics (vs. Q1 2024, in millions, except EPS) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $2,910 | $2,810 | +3.7% | | Net Earnings | $2.1 | $13.0 | -83.8% | | Diluted EPS | $0.06 | $0.37 | -83.8% | | Adjusted EBITDA | $76.9 | $74.9 | +2.7% | | Adjusted EPS | $0.35 | $0.53 | -34.0% | - The decrease in net earnings was attributed to planned increases in depreciation and amortization, organizational realignment expenses, and higher Retail store wages, partially offset by improved Wholesale gross margin rates and lower restructuring charges[6] - The company returned $8.0 million to shareholders through dividends during the first quarter[6] Fiscal 2025 Outlook SpartanNash reaffirms its fiscal 2025 guidance, projecting net sales of $9.8-$10.0 billion and Adjusted EBITDA of $263-$278 million Fiscal 2025 Guidance (53 Weeks, in millions, except EPS) | Metric | Low | High | | :--- | :--- | :--- | | Total net sales | $9,800 | $10,000 | | Adjusted EBITDA | $263 | $278 | | Adjusted EPS | $1.60 | $1.85 | | Capital expenditures and IT capital | $150 | $165 | - The fiscal 2025 Adjusted EPS guidance incorporates an approximate $0.30 negative impact from higher non-cash expenses (primarily depreciation and amortization) and incremental interest costs related to recent acquisitions and investments[7] - The 53rd week in fiscal 2025 is expected to contribute approximately $0.2 billion in net sales, $4.0 million in adjusted EBITDA, and $0.06 in adjusted EPS[7] Segment Performance Analysis Retail net sales grew 19.6% to $947.2 million in Q1 2025, driven by acquisitions, while Wholesale net sales declined 2.6% to $1.96 billion Q1 2025 Segment Results (vs. Q1 2024, in millions) | Segment | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | :--- | | Wholesale | Net Sales | $1,962.4 | $2,014.0 | | | Operating Earnings | $33.2 | $36.0 | | Retail | Net Sales | $947.2 | $792.2 | | | Operating Loss | $(14.3) | $(5.4) | - Wholesale net sales declined primarily due to reduced case volumes with national accounts customers and the elimination of intercompany sales to newly acquired stores, though partially offset by higher military channel sales[6] - Retail net sales growth was driven by incremental sales from acquired stores, complemented by a 1.6% increase in comparable store sales[6] Financial Statements Consolidated financial statements show 3.7% net sales growth but lower net earnings, with stable assets and decreased operating cash flow Condensed Consolidated Statements of Earnings Net sales grew to $2.91 billion in Q1 2025, but higher expenses reduced operating earnings to $19.0 million and net earnings to $2.1 million Q1 2025 Statement of Earnings Highlights (in thousands) | Line Item | 16 Weeks Ended April 19, 2025 | 16 Weeks Ended April 20, 2024 | | :--- | :--- | :--- | | Net sales | $2,909,624 | $2,806,263 | | Gross profit | $481,494 | $440,344 | | Operating earnings | $18,961 | $30,616 | | Net earnings | $2,080 | $12,971 | | Diluted EPS | $0.06 | $0.37 | Condensed Consolidated Balance Sheets As of April 19, 2025, total assets were $2.58 billion, with total liabilities at $1.84 billion and shareholders' equity at $739.5 million Balance Sheet Summary (in thousands) | Account | April 19, 2025 | December 28, 2024 | | :--- | :--- | :--- | | Total current assets | $1,098,616 | $1,091,811 | | Total assets | $2,580,576 | $2,602,296 | | Total current liabilities | $662,597 | $695,239 | | Total liabilities | $1,841,039 | $1,858,806 | | Total shareholders' equity | $739,537 | $743,490 | Condensed Consolidated Statements of Cash Flows Net cash from operating activities decreased to $25.8 million in Q1 2025, resulting in a $1.6 million net decrease in cash and equivalents Cash Flow Summary (in thousands) | Cash Flow Activity | 16 Weeks Ended April 19, 2025 | 16 Weeks Ended April 20, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $25,828 | $36,463 | | Net cash used in investing activities | $(36,960) | $(38,104) | | Net cash provided by financing activities | $9,532 | $2,645 | | Net (decrease) increase in cash | $(1,600) | $1,004 | Non-GAAP Financial Measures and Reconciliations SpartanNash uses non-GAAP measures like Adjusted EBITDA and Adjusted EPS to clarify operational performance, with Q1 2025 Adjusted EBITDA at $76.9 million - The company uses non-GAAP measures like Adjusted EBITDA and Adjusted EPS to assess performance, allocate resources, and provide investors with a better understanding of underlying business trends by excluding non-operational or non-core items[22][24] Reconciliation to Adjusted EBITDA Adjusted EBITDA for Q1 2025 increased to $76.9 million, reconciled from net earnings by adding back key non-cash and non-recurring items Adjusted EBITDA Reconciliation Highlights (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net earnings | $2,080 | $12,971 | | Depreciation and amortization | $36,843 | $30,646 | | LIFO expense | $4,634 | $2,020 | | Acquisition and integration, net | $3,840 | $327 | | Organizational realignment, net | $4,617 | $306 | | Adjusted EBITDA | $76,864 | $74,895 | Reconciliation to Adjusted EPS Adjusted EPS for Q1 2025 was $0.35, adjusted from net earnings for LIFO expense, acquisition costs, and organizational realignment charges Adjusted EPS Reconciliation Highlights (in thousands, except per share) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net earnings | $2,080 | $12,971 | | Total adjustments, net of taxes | $9,880 | $5,509 | | Adjusted earnings from continuing operations | $11,960 | $18,480 | | Adjusted EPS | $0.35 | $0.53 | Other Reconciliations Net long-term debt increased to $757.1 million with a 2.9x debt-to-Adjusted EBITDA ratio, and capital expenditures were $34.6 million - Net long-term debt stood at $757.1 million as of April 19, 2025, with a net long-term debt to adjusted EBITDA ratio of 2.9 for the rolling 52-week period[36] - Capital expenditures and IT capital, a non-GAAP measure combining property purchases with cloud computing development spend, was $34.6 million for Q1 2025, compared to $44.1 million for Q1 2024[38]