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SpartanNash Beats Q2 Expectations, Updates Q3 Guidance

SpartanNash (SPTN) reported better-than-expected Q2 results, topping both earnings and revenue estimates despite ongoing labor and supply-chain constraints faced across the industry.

Shares of the U.S.- based food distributor and grocery store retailer dropped 1.6% in Wednesday’s extended trading session.

Adjusted earnings of $0.54 beat analysts’ expectations of $0.48 per share. The company reported earnings of $0.73 per share in the prior-year period.

Net sales declined 3.6% year-over-year to $2.11 billion but exceeded consensus estimates of $2.08 billion. Notably, the prior-year quarter’s results were positively impacted by higher consumer demand across all segments due to the COVID-19 pandemic.

Comparable-store sales declined 2.7% in the quarter. However, comparable-store sales grew 12.1% on a 2-year stack basis. (See SpartanNash stock charts on TipRanks)

SpartanNash CEO Tony Sarsam commented, “Our updated outlook reflects the improved trends in Retail, but also recognizes the headwinds related to sales trends in our Military business and strains on our supply chain that have been significantly impacted by historic labor shortages.”

Sarsam further added, “Following the recent announcement of our supply chain transformation initiative, our team has completed the blueprint phase and begun work in areas that will best position us for sustainable, profitable growth and will enhance shareholder returns.”

Based on the Q2 results, management raised the lower end of the financial guidance for the third quarter of Fiscal 2021. The company now forecasts adjusted earnings in the range of $1.70 to $1.80 per share, while the consensus estimate is pegged at $1.77 per share. Net sales are forecast to be in the range of $8.8 – $9 billion, versus the consensus estimate of $8.89 billion.

Following the Q2 results, Jefferies analyst Matthew Fishbein reiterated a Hold rating on the stock with the price target of $18 (12.7% downside potential).

Overall, the stock has a Hold consensus rating based on 3 Holds. The average SpartanNash price target of $19.50 implies 5.4% downside potential from current levels.

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