SpartanNash (NASDAQ: SPTN) reported Q4 EPS of $0.23, $0.04 worse than the analyst estimate of $0.27. Revenue for the quarter came in at $2 billion versus the consensus estimate of $2 billion.

Fourth Quarter Fiscal 2019 Highlights

• Net sales growth of 5.3%, to $2.00 billion from $1.90 billion in the prior year quarter, representing the fifteenth consecutive quarter of growth.
• Retail comparable store sales of 0.5%, were positive for the second consecutive quarter.
• EPS of $0.15 per share; Adjusted EPS of $0.23, including $0.11 in CEO transition and supplemental incentive program costs (“Transition Costs”).
• Significant working capital improvements over the prior year, including over $45 million in inventory reductions, excluding the impact of the Martin’s Super Markets (“Martin’s”) acquisition.

“We are pleased with the progress that was made in the last quarter,” said Dennis Eidson, Interim President and Chief Executive Officer. “By focusing on execution, we were able to deliver positive retail comparable store sales for the second consecutive quarter, reduce working capital and increase our free cash flow, while making improvements in our supply chain operations. As a result, we were able to deliver results consistent with the guidance we provided following the third quarter and are optimistic about our future outlook.”

GUIDANCE:

SpartanNash sees FY2020 EPS of $1.12-$1.20, versus the consensus of $1.24.

For the 53-week fiscal year ending January 2, 2021, the Company anticipates low-single digit percentage sales growth. On a 52-week basis, the Company expects the Food Distribution segment will continue to achieve mid-single digit sales growth driven by existing customers and new business, partially offset by attrition in the independent retail base and the closure of the Fresh Kitchen operations. The Company expects positive Retail segment comparable sales for fiscal 2020 to range from 0.1% to 0.7%. In the Military Distribution segment, the Company expects a continued decline in the DeCA comparable sales trend, partially offset by growth in DeCA private brands, resulting in a mid-single digit percentage sales decline. The Company will also benefit from an additional week of sales compared to the 52-week year ended December 28, 2019, which will be reflected in the Company’s fourth quarter fiscal 2020 results.

The Company is also initiating fiscal 2020 adjusted EBITDA guidance of $180 million to $190 million, compared to fiscal 2019’s adjusted EBITDA(2) of $177.9 million, consistent with the Company’s projected increases in operating earnings.

For fiscal year 2020, the Company anticipates adjusted earnings per share from continuing operations(4) of approximately $1.12 to $1.20, excluding restructuring charges, merger/acquisition and integration expenses and other adjusted items totaling $7.5 million to $9.0 million before taxes, as detailed in Table 7. The favorable contributions from initiatives associated with Project One Team are expected to be partially offset by the increase in costs to achieve normalized incentive compensation levels. The Company anticipates that reported earnings from continuing operations will be in the range of approximately $0.93 to $1.04 per diluted share, compared to earnings from continuing operations of $0.16 per diluted share in fiscal 2019. The anticipated adjusted and reported earnings per share from continuing operations include approximately $0.02 in benefits from the 53rd week in fiscal 2020 as compared to 52-weeks in fiscal 2019.

The Company’s guidance reflects an effective tax rate of 23.5% to 24.5% for fiscal year 2020. The Company expects capital expenditures for fiscal year 2020 to be in the range of $80.0 million to $90.0 million, including the $12 million in 2019 capital expenditure accruals mentioned previously, with depreciation and amortization of $88.0 million to $94.0 million. Interest expense is expected to range from $27.0 million to $28.0 million in fiscal 2020.

With the low volume post-Easter week moving into fiscal 2020’s first quarter, the Company expects Retail comparable sales to be approximately flat. Adjusted diluted earnings per share from continuing operations for the first quarter of fiscal 2020 are expected to be slightly above the first quarter of fiscal 2019.

The Board of Directors has continued a comprehensive process to identify the Company’s next Chief Executive Officer and has made progress in the search over the last quarter.

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