Spartan Stores has reported a strong first quarter with both sales and earnings growth.

Consolidated net sales for the 12-week first quarter increased 5.4% to US$556.7m from US$528m in last year's first quarter.

The US retailer said that contributing to the net sales growth were 3.6% comparable store sales growth (excluding fuel centre sales) in the company's retail segment, incremental fuel sales and distribution segment sales growth.

Operating earnings improved for the sixth consecutive quarter, increasing 87.4% to $12.8m from $6.9m in the same period last year. The operating earnings improvement was due primarily to the absence of the above mentioned charges, higher net sales and better leveraging of expenses, the company said.

"We are certainly pleased with our business plan execution and steady sales and profit growth," said Craig Sturken, Spartan's chairman, president and CEO. Year-over-year quarterly net sales have grown steadily for the past five quarters and operating earnings have again improved by double digits in this quarter, despite a difficult economic environment."

First-quarter earnings from continuing operations increased 158.2%, reaching $6.8m, or $0.31 per diluted share, compared with $2.6m, or $0.12 per diluted share in the same period last year.

Looking forward, Sturken said: "During the remainder of the year, we will continue working to fully transition the new distribution business with Martin's Super Markets and to integrate our Felpausch acquisition.

"As a result of the market exit of certain Farmer Jack stores, a number of our distribution customers recently expanded their store bases in the Detroit area, and we expect to begin ramping-up incremental distribution business to these customers during the second and third quarters of our fiscal year."

On a 52-week basis, the company expects comparable retail store sales to increase in the low single digits for the remainder of the year. The Felpausch retail stores should add approximately US$70m of incremental consolidated sales in fiscal 2008 and be accretive to earnings in the second full year of operation.