US grocery retailer Spartan Stores has posted a 13.5% increase in second-quarter net sales to US$627.1m, while earnings from continuing operations increased by 19.6% to $11.5m.
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Lower interest charges, due to the company’s private placement of convertible senior notes and the amendment to its revolving credit facility during the first quarter, contributed to the rise in earnings, the company said.
The rise in Q2 net sales was primarily due to the acquisition of stores from Felpausch Food Centers, strong comparable store sales growth of 2.8% (excluding fuel), incremental distribution sales to Martin’s Super Markets and new distribution business, the company stated.
On the back of the strong sales growth, Spartan recorded an 11.9% rise in Q2 operating earnings to $20.1m.
“We are very pleased to continue our consistent record of sales and profit growth,” said CEO Craig Sturken. “Our strong sales growth and efficient operating cost structure led to a near 12% year-over-year increase in second-quarter operating earnings, marking another consecutive quarter of double-digit operating earnings growth.”
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By GlobalDataFor the six-month period, consolidated net sales rose by 9.7% to $1.2bn, with the increase also attributed to the Felpausch acquisition, higher comparable store sales, fuel centre sales growth, and additional sales from new and existing distribution customers. Operating earnings for the six months rose by 33.5% to $33.0m, while net earnings increased by 52.8% to $18.4m.
Sturken said the year-to-date performance had been better than anticipated, and the company “remained confident” about its performance for the remainder of the fiscal year.
Spartan expects comparable retail store sales to increase in the low single-digits during the second half of the 2008 fiscal year, and the Felpausch stores to add around $85m in consolidated sales during the fiscal year.
