Smart & Final Stores (SFS) Tops Q3 EPS by 6c, Revenues Miss; Boosts FY18 EPS Guidance Above Consensus

Smart & Final Stores (NYSE: SFS) reported Q3 EPS of $0.23, $0.06 better than the analyst estimate of $0.17. Revenue for the quarter came in at $1.5 billion versus the consensus estimate of $1.51 billion.

• Net sales increased 2.8% to $1,497.7 million with a comparable store sales increase of 0.6%
• Gross margin increased 8.7% to $232.4 million
• Adjusted EBITDA of $62.3 million
• Net income of $10.2 million or $0.14 per share, including benefit of lower tax rate
• Adjusted net income of $16.9 million or $0.23 per share, including benefit of lower tax rate
• Debt reduction of $23 million in the quarter and $46 million year-to-date

"Our third quarter performance was solid with 2.8% year-over-year growth in overall sales. We also delivered our sixth consecutive quarter of positive comparable store sales, with growth in both average transaction size and merchandise margins despite greater pressure from deflation in product prices," said David Hirz, president and chief executive officer of the Company.

"We also continue to allocate our strong free cash flow from operations to reduce outstanding debt with a year-to-date reduction of $46 million. Our focus on our key customer segments, including small business customers, is growing sales despite deflation, as we build on our core strengths in value pricing and unique merchandising. We continue to support our value proposition through targeted investments in digital commerce and infrastructure, which are helping to drive strong online sales gains in both our Smart & Final and Smart Foodservice Warehouse banners."

GUIDANCE:

Smart & Final Stores sees FY2018 EPS of $0.46-$0.48, versus the consensus of $0.44.

For earnings history and earnings-related data on Smart & Final Stores (SFS) click here.

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