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SpartanNash's (SPTN) Shop-N-Save Food Purchase to Boost Sales

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SpartanNash Company SPTN has been making smart moves to enhance customers’ experience. In a latest move, SPTN informed that it acquired Shop-N-Save Food Centers (SNS), which is a three-store grocery chain in the Northwestern Michigan. The Benzonia, Fremont and Ludington, Mich. grocery stores are now converted to SPTN's popular Family Fare brand.

Customers can get fresh produce, a deli, bakery, floral department, pharmacy, meat, seafood counter and a lot more at SNS, including SPTN's Our Family products. They will also be offered SpartanNash’s loyalty program yes Rewards, providing guests with digital coupons, featured clubs and special perks so that they can save on groceries and household products. Established in 1962, SpartanNash acquired the Family Fare stores and currently operates 86 Family Fare stores across the Midwest.

We note that SNS was a food distribution customer of SPTN for about 25 years. SNS is quite a popular family-owned and operated business, and is expected to provide a lot of new offerings to the shoppers. This also brings an employment opportunity for all the SPTN’s associates. Hence, the acquisition of the aforesaid stores will widen SpartanNash’s customer reach and boost its sales.

What’s More?

On Jun 3, 2022, SpartanNash posted a solid earnings performance for the first quarter of 2022 wherein the bottom line beat the Zacks Consensus Estimate and grew year over year. SPTN posted adjusted earnings from continuing operations of 83 cents a share, outshining the Zacks Consensus Estimate of 65 cents. Also, the bottom line increased 40.7% from 59 cents a share earned in the same quarter a year ago.

Further, consolidated net sales of $2,763.7 million rose 4% year over year on higher sales across all the segments. Comparable store sales rose to 7.2%, reflecting the momentum in its Retail segment. Following robust quarterly results, management raised guidance for 2022. Net sales are guided in the range of $9-$9.3 billion, higher than the earlier projection of $8.9-$9.1 billion. Adjusted earnings per share are projected in the bracket of $2.17-$2.32, up from $2.10-$2.25 estimated earlier.

In addition, management issued long-term financial targets, which are likely to be accomplished by 2025. It projects net sales of more than $10 billion, indicating growth of at least 12% from the fiscal 2021 figure. Adjusted EBITDA is anticipated to be more than $300 million, suggesting an increase of at least 40% from the fiscal 2021 number. SPTN expected adjusted EBITDA margin to be 3% of net sales, showing a rise of 25% from the fiscal 2021 reading.

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This currently Zacks Rank #3 (Hold) stock has gained 2.6% in the past three months against the industry’s 17.7% decline.

Stocks to Consider

We highlighted three better-ranked stocks in the Retail - Wholesale sector, namely Boot Barn Holdings BOOT, Costco COST and Fastenal FAST.

Boot Barn, a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories, currently flaunts a Zacks Rank #1 (Strong Buy). BOOT has a trailing four-quarter earnings surprise of 25.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and earnings per share suggests growth of 17% and 4.4%, respectively, from the year-ago period’s reported figures. BOOT has an expected EPS growth rate of 20% for three-five years.

Costco, the leading warehouse club operator, currently has a Zacks Rank #2 (Buy). COST has a trailing four-quarter earnings surprise of 28.3%, on average.

The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share suggests growth of 14.5% and 16.9%, respectively, from the corresponding year-ago period's reported figures.

Fastenal, a national wholesale distributor of industrial and construction supplies, currently has a Zacks Rank of 2. FAST has a trailing four-quarter earnings surprise of 5%, on average.

The Zacks Consensus Estimate for Fastenal's current financial-year sales and earnings per share suggests growth of 15.6% and 17.5%, respectively, from the corresponding year-ago period’s tallies. FAST has an expected EPS growth rate of 9% for three-five years.


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