Nash Finch Company
) reported first-quarter 2013 earnings (excluding one-time items)
of 20 cents per share, which is 57.4% lower than 47 cents per
share in the year-ago period. Earnings, however, surpassed the
Zacks Consensus Estimate by 42.9%.
Nash Finch's total sales in the first quarter of 2013 were
$1.09 billion, up 2.3% from the year-ago quarter. The takeover of
12 Bag 'N Save stores in May 2012 and 18 No Frills stores during
the quarter boosted total company sales by $35.0 million. Sales,
however, missed the Zacks Consensus Estimate of $1.19
Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) in the first quarter of 2013 declined 22.2%
to $18.6 million. The EBITDA margin shrank 50 basis points (bps)
to 1.7%. Selling, general and administrative expenses amounted to
$75.1 million up 28.8% from the prior-year quarter.
Sales declined 0.4% year over year to $532.0 million in the first
quarter of 2013.
The segment's EBITDA decreased 41.0% from the prior-year
quarter to $7.9 million, owing to the decline in gross margin
related to reduced contractual margin rates, low inflation and
higher transportation cost. The EBITDA margin was 1.5% in the
reported quarter, down 100 bps from the prior-year quarter.
Food Distribution sales declined 11.0% to $385.3 million in the
quarter. The decrease was primarily due to the impact of the
acquisition of Bag 'N' Save and No Frills supermarkets, which,
however, benefited the Retail segment.
Segment's EBITDA decreased 50.8% to $3.2 million in the
quarter. EBITDA margin contracted 70 bps year over year to 0.8%
in the reported quarter due to inflation.
Retail sales went up 72.1% to $176.9 million, driven by the
benefits of the acquisition of Bag 'N' Save and No Frills
Segment's EBITDA stood at $6.6 million in the quarter compared
to $2.9 million in the prior-year quarter. The EBITDA margin
inflated 90 bps year over year to 3.7% in the reported
While the acquisition of Bag 'N Save added to retail sales, as
it was a Food Distribution customer, it was also responsible for
the year-over-year decrease in Food Distribution segment
Cash and cash equivalents for Nash Finch stood at $1.2 million
as of Mar 23, 2013 compared with $1.3 million in the prior
quarter. Long-term debt went up to $381.4 million in the quarter
from $356.3 million in the prior-year quarter.
Nash Finch's earnings results were not very encouraging.
Bottom line suffered year-over-year decline, while top line
delivered modest growth of 2.3% in the quarter. Moreover, a low
food inflation rate continues to affect the company as it limits
the company's pricing power.
We are continuing to see pressure on gross margins in the
military segment from lower contractual margin rates.
Currently, Nash Finch carries a Zacks Rank #4 (Sell).
Other Stocks to Consider
Investors may consider other Consumer Staples stocks that are
currently doing well.
Flowers Foods Inc.
Green Mountain Coffee Roasters Inc
) carry a Zacks Rank #1 (Strong Buy) and
Kraft Foods Group Inc.
) carries a Zacks Rank #2 (Buy).
FLOWERS FOODS (FLO): Free Stock Analysis
GREEN MTN COFFE (GMCR): Free Stock Analysis
KRAFT FOODS GRP (KRFT): Free Stock Analysis
NASH FINCH CO (NAFC): Free Stock Analysis
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