• Full Year Net Sales: $9.55 billion, down slightly less than 2%.
• Q4 Sales Growth: Increased by 70 basis points compared to the prior year quarter.
• Retail Net Sales: Increased over 100 basis points to more than $2.84 billion.
• Retail Comparable Sales: Decreased by 0.7% in Q4.
• Wholesale Net Sales: Over $6.7 billion.
• Military Sales: Growth for 12 consecutive quarters.
• Adjusted EBITDA: $258 million, a record for the third consecutive year.
• Q4 Adjusted EBITDA: $58.6 million, up 9.2% from the prior year quarter.
• Net Earnings: Nearly $300,000 for the year.
• Cash from Operating Activities: $206 million, a 130% increase from fiscal 2023.
• Gross Profit Q4: $365 million or 16.1% of net sales.
• Retail Segment Sales Growth: 7.7% to $697 million in Q4.
• Retail Adjusted EBITDA: Increased to $14.8 million in Q4.
• Net Loss Q4: $35.1 million or $1 per diluted share.
• Adjusted Net Earnings Q4: $14.4 million or $0.42 per diluted share.
• Leverage Ratio: Increased to 2.8 times net long-term debt to adjusted EBITDA.
• Liquidity: Approximately $300 million at the end of the quarter.
• 2025 Net Sales Guidance: $9.8 billion to $10 billion.
• 2025 Adjusted EBITDA Guidance: $263 million to $278 million.
• 2025 Adjusted EPS Guidance: $1.60 to $1.85 per diluted share.
• 2025 CapEx Guidance: $150 million to $165 million.

• Warning! GuruFocus has detected 3 Warning Signs with SPTN.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• SpartanNash Co (NASDAQ:SPTN) achieved a record adjusted EBITDA of $258.5 million for the third consecutive year.
• The company returned $45 million to shareholders through share repurchases and dividends.
• Military sales have grown for 12 consecutive quarters, indicating strong performance in this unique sales channel.
• SpartanNash Co (NASDAQ:SPTN) generated $206 million in cash from operating activities, a 130% increase compared to fiscal 2023.
• The company has improved its safety KPIs by 83% since 2020 and increased its 90-day new hire retention rate by nearly 5% in 2024.

Negative Points

• SpartanNash Co (NASDAQ:SPTN) reported a net loss of $35.1 million in the fourth quarter, primarily due to a $45.7 million retail goodwill impairment charge.
• Full-year net sales decreased by nearly 2% to $9.55 billion.
• The wholesale segment experienced a 2.1% decrease in net sales due to reduced case volumes with national accounts and independent retailers.
• Retail comparable sales decreased by 0.7% in Q4, indicating challenges in consumer demand.
• Interest expense increased by $1.2 million to $10.9 million due to higher borrowings related to recent acquisitions and capital investments.

Q & A Highlights

Q: Can you provide insights on sales volumes and inflation trends within the quarter? A: Tony Sarsam, CEO, noted that foot traffic was stable and better than most conventional groceries, with sequential progress in traffic and comps. Jason Monaco, CFO, added that Michigan showed strong performance with positive comps, and private label penetration exceeded 27%. The recent acquisitions also contributed positively to the quarter's results.

Q: Regarding the 2025 guidance, how should we interpret the organic growth excluding the extra week and acquisitions? A: Jason Monaco explained that the 53rd week adds less than $200 million to revenues. Even without this, there is a solid revenue increase at the midpoint. The acquisitions will add a couple hundred million annually, and organic growth is expected to be flat with modest inflation of about 1%.

Q: Can you elaborate on the growth opportunities in the ethnic store footprint? A: Tony Sarsam highlighted that SpartanNash has operated ethnic stores in Nebraska successfully, with plans to expand in the Midwest. The company aims to double its footprint this year and sees long-term growth potential in this segment due to strong margins and community growth.

Q: Are tuck-in acquisitions included in the 2025 EBITDA guidance, and are they significant? A: Jason Monaco confirmed that the full-year impact of 2024 acquisitions is included in the 2025 guidance, but future tuck-ins are not expected to be materially significant. The company will continue pursuing M&A opportunities that create value.

Q: What is the current sentiment in the M&A market, particularly for convenience stores? A: Tony Sarsam stated that there is a mix of operators looking to exit and those seeing growth potential. Good operators continue to grow, and SpartanNash sees convenience stores as a stable and attractive market. The company remains active in seeking opportunities similar to the recent Markham Group acquisition.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.