SpartanNash Co (SPTN) AI Stock Analysis

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SpartanNash Co

(NASDAQ:SPTN)

63Neutral

SpartanNash Co's stock score of 63 reflects stable financial performance with operational efficiency but challenges in revenue growth and negative free cash flow. The technical analysis indicates bearish trends, while valuation appears fair with a strong dividend yield. The mixed sentiment from the earnings call reflects both strategic growth initiatives and ongoing challenges.

Positive Factors

Earnings Report

SPTN reported $59mm in adjusted EBITDA, beating consensus estimates for $53-54mm.

Expansion Plans

Management has outlined plans for expansion into higher growth retail channels, Hispanic and C-store, both organically and through M&A.

Negative Factors

Competitive Challenges

Despite solid execution of initiatives, management hasn't yet been able to overcome headwinds from AMZN and negative volumes at key independent customers.

Top-line Pressure

Longer term, there is a challenging outlook for SPTN’s top-line, as small- and mid-sized food retailers remain pressured due to competitive disadvantages to larger peers.

SpartanNash Co (SPTN) vs. S&P 500 (SPY)

Market Cap

$649.85M

Dividend Yield4.54%

Average Volume (3M)282.22K

Price to Earnings (P/E)2206.9

Beta (1Y)-0.07

Revenue Growth-2.66%

EPS Growth8.18%

CountryUS

Employees11,000

SectorConsumer Defensive

Sector Strength94

IndustryFood Distribution

Share Statistics

EPS (TTM)>-0.01

Shares Outstanding33,846,210

10 Day Avg. Volume265,482

30 Day Avg. Volume282,217

Financial Highlights & Ratios

PEG Ratio1.70

Price to Book (P/B)N/A

Price to Sales (P/S)0.07

Price to Cash Flow (P/CF)2.00

P/FCF Ratio2.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$20.00

Price Target Upside4.77% Upside

Rating ConsensusHold

Number of Analyst Covering3

SpartanNash Co Business Overview & Revenue Model

Company DescriptionSpartanNash Co. is a leading food solutions company in the United States, operating within the sectors of food distribution and retail. The company is headquartered in Grand Rapids, Michigan, and serves as a distributor, wholesaler, and retailer. SpartanNash's core products and services include distributing and supplying grocery products to independent and chain retailers, offering value-added support services, and operating a network of retail grocery stores under various banners.

How the Company Makes MoneySpartanNash Co. generates revenue primarily through its wholesale distribution segment, which supplies grocery products, fresh produce, and other consumer goods to independent and chain retailers, military commissaries, and food service distributors. The company also earns revenue from its retail operations, which involve selling products directly to consumers through its chain of grocery stores. Additionally, SpartanNash provides value-added services such as private label development, marketing support, and logistics solutions, which contribute to its earnings. The company's significant partnerships with retailers and military commissaries enhance its distribution capabilities and expand its market reach, further bolstering its revenue streams.

SpartanNash Co Financial Statement Overview

Summary

SpartanNash Co has stable profit margins and operational efficiency but faces challenges with revenue growth and free cash flow management. The balance sheet shows moderate leverage, posing some risk. Strong operating cash flow contrasts with negative free cash flow, indicating the need for improved cash management.

Income Statement

Positive

The company shows a solid gross profit margin of 15.6% and a net profit margin of 0.5% for TTM, indicating modest profitability. The revenue has slightly decreased compared to the previous period, reflecting a revenue growth rate of -1.14%, which could signal challenges in maintaining sales levels. The EBIT margin is at 1.1%, and EBITDA margin at 2.3% for TTM, showing operational efficiency but room for improvement in profitability.

Balance Sheet

Positive

The debt-to-equity ratio stands at 1.18, which suggests moderate leverage and potential risk if not managed carefully. The return on equity (ROE) for TTM is 5.8%, indicating moderate profitability for shareholders. The equity ratio is 31.7%, showing a balanced structure but with a significant portion of assets financed by liabilities.

Cash Flow

Neutral

The operating cash flow to net income ratio of 2.56 in TTM highlights strong cash generation relative to net income. However, the free cash flow is negative at -$15.08 million, showing challenges in cash management and capital expenditure. The free cash flow to net income ratio is also negative, underscoring potential cash flow issues.

TTM	Dec 2023	Dec 2022	Mar 2022	Mar 2021	Dec 2019
Breakdown
Income Statement		Total Revenue
9.53B	7.48B	9.64B	8.93B	9.35B	8.54B
	Gross Profit
1.49B	1.15B	1.50B	1.40B	1.42B	1.24B
	EBIT
105.20M	83.17M	-23.33M	23.39M	38.73M	-37.66M
	EBITDA
214.80M	83.17M	70.85M	116.10M	128.60M	52.94M
	Net Income Common Stockholders
45.69M	41.93M	34.52M	73.75M	75.91M	5.74M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
9.17M	17.96M	29.09M	10.67M	19.90M	24.17M
	Total Assets
753.48M	2.36B	2.31B	2.21B	2.28B	2.28B
	Total Debt
221.21M	865.58M	788.10M	720.27M	811.09M	998.34M
	Net Debt
212.04M	847.61M	759.01M	709.60M	791.19M	974.17M
	Total Liabilities
479.58M	1.58B	1.54B	1.42B	1.54B	1.59B
	Stockholders Equity
273.90M	778.18M	766.07M	782.87M	735.05M	687.54M
Cash Flow		Free Cash Flow
-15.08M	95.68M	13.07M	81.73M	239.42M	105.38M
	Operating Cash Flow
116.90M	95.68M	110.35M	161.16M	306.72M	180.19M
	Investing Cash Flow
-145.17M	-82.00M	-100.95M	-47.98M	-57.22M	-143.17M
	Financing Cash Flow
28.22M	-25.21M	9.02M	-122.41M	-253.76M	-31.22M

SpartanNash Co Technical Analysis

Technical Analysis Sentiment

Negative

Last Price19.09

Price Trends

50DMA

19.58

Negative

100DMA

18.94

Positive

200DMA

19.52

Negative

Market Momentum

MACD

0.17

Positive

RSI

59.32

Neutral

STOCH

70.57

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPTN, the sentiment is Negative. The current price of 19.09 is below the 20-day moving average (MA) of 19.84, below the 50-day MA of 19.58, and below the 200-day MA of 19.52, indicating a bearish trend. The MACD of 0.17 indicates Positive momentum. The RSI at 59.32 is Neutral, neither overbought nor oversold. The STOCH value of 70.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SPTN.

SpartanNash Co Risk Analysis

SpartanNash Co disclosed 26 risk factors in its most recent earnings report. SpartanNash Co reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

SpartanNash Co Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SYY	74 Outperform	$34.77B	18.26	87.49%	2.86%	3.95%	-5.04%
KR	73 Outperform	$43.51B	17.92	26.59%	1.84%	-1.94%	23.94%
COST	71 Outperform	$427.85B	56.29	32.89%	0.48%	6.13%	12.14%
PFGC	71 Outperform	$11.79B	30.42	9.54%	―	3.85%	-9.74%
SPTN	63 Neutral	$649.85M	2,206.90	0.04%	4.54%	-2.66%	8.18%
Sector *	63 Neutral	$20.53B	14.04	-16.01%	3.27%	1.30%	4.55%
UNFI	55 Neutral	$1.52B	―	-4.94%	―	4.73%	29.70%

* Consumer Defensive Sector Average

Performance Comparison

SPTN

SpartanNash Co

19.46

1.54

8.59%

COST

Costco

963.41

236.08

32.46%

Kroger Company

68.22

14.20

26.29%

SYY

Sysco

70.43

-2.77

-3.78%

UNFI

United Natural Foods

24.21

14.31

144.55%

PFGC

Performance Food Group

75.48

6.26

9.04%

SpartanNash Co Earnings Call Summary

Earnings Call Date: Feb 12, 2025 | % Change Since: 2.52% | Next Earnings Date: May 29, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong performance in adjusted EBITDA, retail segment growth, and military sales, alongside significant margin enhancements and cash generation. However, these positives were counterbalanced by challenges such as a slight decline in net sales, a substantial goodwill impairment charge, decreased wholesale sales, increased interest expenses, and an operating loss in the retail segment.

Highlights

Record Adjusted EBITDA

Achieved a record adjusted EBITDA of $258 million, marking the third consecutive year of record performance and a 9% increase compared to the prior year quarter.

Retail Segment Growth

Retail net sales increased over 100 basis points to more than $2.84 billion with positive comparable sales progression, notably in Michigan, which had positive comps in the last two quarters.

Military Sales Growth

Military sales have grown for 12 consecutive quarters, consistently generating accretive results and serving as an avenue for additional organic growth.

Margin Enhancing Initiatives

Margin enhancing initiatives drove approximately $50 million in benefits in 2024, achieving the plan target of $125 million to $150 million a year ahead of schedule.

Strong Liquidity and Cash Generation

Generated $206 million in cash from operating activities, representing a 130% increase compared to fiscal 2023, and maintained strong liquidity of about $300 million.

Lowlights

Net Sales Decline

Full year net sales were down a little less than 2% to $9.55 billion, although Q4 saw a slight rebound with a sales increase of more than 70 basis points compared to the prior year quarter.

Goodwill Impairment Charge

A goodwill impairment charge of $45.7 million was taken in the quarter, attributed to underperformance in the legacy retail business.

Wholesale Segment Challenges

Wholesale net sales decreased by 2.1% primarily due to reduced case volumes with national accounts and independent retailers.

Interest Expense Increase

Interest expense increased by $1.2 million to $10.9 million due to an increase in borrowings related to recent acquisitions and capital investments.

Operating Loss in Retail Segment

Retail reported an operating loss of $46 million compared to earnings of $1.9 million in the fourth quarter of 2023.

Company Guidance

During the call, SpartanNash provided clear guidance for fiscal 2025, projecting net sales to range between $9.8 billion and $10 billion, with an anticipated adjusted EBITDA between $263 million and $278 million, signaling a midpoint growth of 4.6%. The company also highlighted their strategic focus on both organic and inorganic growth, incorporating tuck-in acquisitions and the impact of an additional week in fiscal 2025. They expect food inflation to be around 1% for the year. SpartanNash aims to expand their retail footprint, particularly in the ethnic and convenience store sectors, and plans to continue leveraging their market position to capture market share and drive long-term shareholder value.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.