SpartanNash (NASDAQ: SPTN) reported Q1 EPS of $0.67, $0.20 better than the analyst estimate of $0.47. Revenue for the quarter came in at $2.86 billion versus the consensus estimate of $2.62 billion.

First Quarter Fiscal 2020 Highlights

• Net sales growth of 12.4%, to $2.86 billion from $2.54 billion in the prior year quarter, representing the sixteenth consecutive quarter of growth.
• Retail comparable store sales of 15.6% were positive for the third consecutive quarter, representing a significant acceleration from recent trends driven by the COVID-19 pandemic.
• EPS of $0.43 per share, an increase of 105% over the prior year quarter; adjusted EPS of $0.67 per share, an increase of 179% over the prior year quarter.
• Adjusted EBITDA increase of 35%, to $74.0 million from $54.7 million in the prior year quarter.
• Cash generated from operating activities of $129.3 million, leading to an over $90 million pay down of long-term debt.
• Raised full year outlook to reflect actual year-to-date results as well as for increased sales and earnings trends the Company began to realize prior to the onset of the COVID-19 pandemic. First quarter results include an estimated $0.38 of additional EPS from increased consumer demand related to COVID-19.

“I am incredibly proud of our family of associates, from those within our retail stores to our supply chain team and all of those supporting their efforts to serve our local customers and communities during this significant time of need for food, pharmacy, household and personal care products,” said Dennis Eidson, Interim President and Chief Executive Officer. “Our number one priority continues to be the wellbeing and safety of our entire team, particularly those on the frontlines, who have been driving our business forward every day. Our ability to respond to unprecedented consumer demand during the quarter enabled us to significantly exceed our expectations for the quarter and we are raising our annual outlook to reflect our strong first quarter execution in a challenging and evolving environment. Going forward, we remain committed to enhancing our long-term strategy as we build upon SpartanNash’s existing foundation and increasingly position the Company to sustain profitable growth.”

GUIDANCE:

SpartanNash sees FY2020 EPS of $1.85-$2.00, versus the consensus of $1.68.

Revised Outlook

For the 53-week fiscal year ending January 2, 2021, the Company expects to continue to benefit from higher consumer food-at-home consumption related to COVID-19, however, the duration and magnitude of the impact are uncertain. As a result, although the Company believes that its sales for fiscal 2020 will materially exceed its initial 2020 guidance, the Company is unable to fully estimate the impact COVID-19 will have on the remainder of 2020. The Company is updating its annual outlook, originally provided on February 19, 2020, to reflect actual financial results experienced to-date, as well as expectations for the remainder of the fiscal year related to earnings trends. Specifically, these updates include incremental adjusted earnings per share from continuing operations for the COVID-19 impact experienced to-date, other first quarter earnings in excess of management’s initial guidance expectations as well as the benefits associated with cost reduction initiatives and increased sales and earnings trends the Company was experiencing prior to the onset of the pandemic. The Company’s updated outlook for the second half of the year does not include any adjustment for future impacts from the COVID-19 pandemic. However, the Company currently anticipates any incremental costs related to COVID-19 will be more than offset by the improved food-at-home sales trend.

For fiscal year 2020, the Company now anticipates adjusted earnings per share from continuing operations(4) of approximately $1.85 to $2.00 compared to its prior projection of $1.12 to $1.20. Reported earnings per share from continuing operations are expected to range from $1.48 to $1.81 compared to its prior projection of $0.93 to $1.04. For the second quarter of fiscal 2020, adjusted earnings per share are expected to increase 70-100% over fiscal 2019 second quarter adjusted earnings per share of $0.33.

The Company now expects fiscal 2020 adjusted EBITDA of $205 million to $215 million compared to its prior guidance of $180 million to $190 million, consistent with the Company’s projected increases in operating earnings.

The Company's guidance continues to reflect capital expenditures and IT capital in the range of $80.0 million to $90.0 million for fiscal year 2020. Depreciation and amortization are now expected to be $88.0 million to $92.0 million for the fiscal year. Interest expense is now expected to range from $19.5 million to $21.0 million in fiscal 2020. The Company’s guidance reflects an adjusted effective tax rate of 23.5% to 24.5% and a reported effective tax rate of 14.0% to 18.0%.

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

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