SpartanNash(SPTN) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In 2023, the company's net sales increased nearly 1% to $9.73 billion, despite a 2$257 million, compared to $243 million in the prior year [80] - The company reported net earnings of$52.2 million, a 51% increase from $34.5 million in 2022 [84] - The gross profit for Q4 was$339 million, representing 15.1% of net sales, compared to $341 million or 14.8$647 million, down from $678 million in Q4 2022, with comparable store sales decreasing by 2.8$33 million to $1.6 billion, primarily due to demand changes within the Amazon business [86] - Retail adjusted EBITDA was$13 million, down from $19.9 million in the prior year quarter, impacted by lower volumes and a decline in gross margin [87] Market Data and Key Metrics Changes - The company experienced a drop in demand within its Amazon business, affecting overall sales expectations [83] - Fuel sales in the retail segment were down by more than 19$50 million to 60 million in benefits from supply chain and merchandising transformations in 2024 [55] - The company is actively evaluating M&A opportunities to enhance its overall business offering [25][42] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the macro environment has changed, but emphasized a strong foundation to adapt to these changes [17][65] - The company expects full-year net sales for 2024 to be in the range of 9.7 billion to $9.9 billion, with adjusted EPS projected between$1.85 to $2.10 per share [15][16] - Management expressed optimism about the consumer returning to stable growth, despite current headwinds [96] Other Important Information - The company improved its turnover rate by more than 9$300 million of EBITDA by 2025, while acknowledging uncontrollable external factors [20] Question: Insights on the Wholesale business performance - Management noted that the Wholesale business is performing well, with military and national accounts showing strong growth [30] Question: Clarification on gross profit trends - Management explained that gross profit trends are influenced by inflation-related price gains and ongoing transformational programs [44] Question: Impact of fuel sales on Retail segment - Management indicated that lower fuel sales had a $20 million drag on the top line, with a$4 million impact on the bottom line due to lower margins [106] Question: Expectations for inflation and supplier promotions - Management projected a modest food inflation assumption of about 1% for 2024, with expectations of stabilizing inflation levels [110]