SpartanNash (SPTN) Tops Q3 EPS by 8c, Revenues Miss; Offers FY20 EPS Guidance Below Consensus

SpartanNash (NASDAQ: SPTN) reported Q3 EPS of $0.70, $0.08 better than the analyst estimate of $0.62. Revenue for the quarter came in at $2.06 billion versus the consensus estimate of $2.14 billion.

Third Quarter Fiscal 2020 Highlights

• Net sales growth of 3.1% to $2.06 billion from $2.00 billion in the prior year quarter, representing the eighteenth consecutive quarter of growth.
• Retail comparable store sales of 10.6% were positive for the fifth consecutive quarter.
• EPS of $0.56 per share, compared to a loss of $(0.01) per share in the prior year quarter; adjusted EPS of $0.70 per share, an increase of 133% over $0.30 per share in the prior year quarter.
• Adjusted EBITDA increase of 37.2%, to $57.0 million from $41.6 million in the prior year quarter.
• Subsequent to the end of the third quarter, the Company extended its commercial agreement with Amazon. In connection with this agreement, the Company issued stock warrants to a subsidiary of Amazon, subject to certain vesting conditions.

“In the past nine weeks since taking the CEO position I’ve visited a great number of our distribution centers and retail stores. The passion demonstrated by our associates is nothing short of inspirational,” said Tony Sarsam, President and Chief Executive Officer. “I am energized and excited about the profitable growth opportunities that lie ahead for our business. As I immerse further into our business, I will continue to assess our long-term strategy, focus on motivating our associates and recognizing their accomplishments, identifying opportunities to make investments to improve the efficiency and effectiveness of our supply chain, and evaluating how to best position SpartanNash to deliver shareholder value for years to come.”

GUIDANCE:

SpartanNash sees FY2020 EPS of $2.42-$2.50, versus the consensus of $2.55.

For the 53-week fiscal year ending January 2, 2021, the Company is updating its annual outlook from what was previously provided on August 12, 2020 to reflect actual financial results, its expectations for the remainder of the fiscal year, and the forecasted impact of stock warrants, which were granted early in the fourth quarter.

For fiscal year 2020, the Company now anticipates adjusted earnings per share from continuing operations(7) of approximately $2.42 to $2.50 compared to its prior projection of $2.40 to $2.60. The Company’s updated guidance reflects the continued benefits of sales trends associated with COVID-19 and the related increase in consumer demand, offset by estimated non-cash stock warrant expense of $6.0 million to $7.0 million, or $0.13 to $0.15 per diluted share. Reported earnings per share from continuing operations are expected to range from $2.09 to $2.17 compared to its prior projection of $2.13 to $2.41.

The Company now expects fiscal 2020 adjusted EBITDA to range from $237.0 million to $242.0 million compared to its prior guidance of $232.0 million to $242.0 million.

The Company's updated guidance now reflects capital expenditures and IT capital in the range of $80.0 million to $85.0 million for the fiscal year. Depreciation and amortization have been updated to a range of $88.0 million to $90.0 million. Interest expense is now expected to range from $18.0 million to $18.5 million. The Company’s updated guidance now reflects an adjusted effective tax rate of 23.5% to 24.0% and a reported effective tax rate of 13.0% to 13.5%.

For earnings history and earnings-related data on SpartanNash (SPTN) click here.

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