Spartan Stores, Inc., (Nasdaq:SPTN) a leading regional grocery distributor and retailer, today reported financial results for its 13-week fourth quarter and 53-week fiscal year ended March 31, 2012.
Fourth Quarter Results
Consolidated net sales for the 13-week fourth quarter increased 7.6 percent to $614.8 million compared to $571.5 million in last year’s 12-week fourth quarter. Both the distribution and retail segments reported increased sales during the quarter. The extra week in this year’s fourth quarter and fiscal year contributed $49.8 million of consolidated net sales.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) for the quarter increased 9.6 percent to $28.0 million, or 4.6 percent of net sales, compared to $25.5 million, or 4.5 percent of net sales last year, primarily as a result of the extra week in this year’s fourth quarter.“We are pleased with our ability to generate financial results ahead of our expectations for the fourth quarter through disciplined management of expenses and working capital. These results enabled us to return capital to shareholders through our quarterly dividend and share repurchases, while also repaying the $45 million balance on our revolving credit facility,” stated Dennis Eidson, Spartan’s President and Chief Executive Officer. “We continued to execute on our strategic initiatives during the year as we successfully completed the rollout of our loyalty program to all traditional supermarket banners, increased our private brand development, enhanced our focus on fresh excellence and converted one of our existing Glen’s locations to a Valu Land, our new value-focused store format which is currently under development.” Fourth quarter gross profit margin decreased 70 basis points to 22.0 percent from 22.7 percent in the same period last year. The decline in gross margin was primarily due to a shift in the mix of sales between the Company’s business segments and within distribution, the impact of the 53 rd week, as well as lower retail margin rates partially offset by a LIFO credit. Fourth quarter operating expenses were $115.6 million, or 18.8 percent of net sales, compared to $113.9 million, or 19.9 percent of net sales in the year-ago quarter. The Company’s expense leverage was improved by the impact of the extra week of sales, the shift in mix of sales, lower incentive compensation and benefit costs associated with the timing of the prior year’s provision and less total expense, as well as lower occupancy expense driven principally by general cost containment initiatives and the unseasonably warm weather. These items were partially offset by increased health care and credit card fees compared to the fourth quarter of fiscal 2011.