SpartanNash stock drops on lower-than-expected quarterly earnings and profits for the grocery chain

SpartanNash Company (NASDAQ:SPTN) stock slumped on Thursday after it reported lower than expected earnings and profits in its second quarter fiscal report.

The grocery chain operator said after the close Wednesday that earnings per share was US$0.50 against the expected US$0.57. Gross profit came in at US$265.7mln compared with US$271mln in the same period a year ago.

Shares were down 17% to US$19.75 in the opening minutes of trading.

Net sales for the food distribution segment increased 4.3% to US$941.7mln from US$903.1mln in the prior year quarter, primarily due to sales growth from new and existing customer programs which were partially offset by reduced sales volume as a result of a product recall.

That recall was from its Caito Foods unit and was for certain fresh-cut products produced at the Caito facility in Indianapolis, Indiana. The company temporarily suspended production and distribution of the recalled products due to potential contamination with salmonella.

“The voluntary product recall at Caito negatively impacted both our sales growth and profitability in food distribution during the quarter,” said CEO David Staples.

SpartanNash serves customer locations in all 50 states and the District of Columbia, Europe, Cuba, Puerto Rico, Bahrain, Djibouti and Egypt.

It currently operates 140 supermarkets, primarily under the banners of Family Fare Supermarkets, D&W Fresh Market, VG’s Grocery, Dan’s Supermarket and Family Fresh Market. Through its MDV military division, SpartanNash is a leading distributor of grocery products to US military commissaries.

Core businesses include distributing grocery products to a diverse group of independent and chain retailers, its corporate-owned retail stores and U.S. military commissaries and exchanges, as well as premier fresh produce distribution and fresh food processing.

Contact Rene Pastor at [email protected]

Story by ProactiveInvestors