Q2 2022 SpartanNash Co Earnings Call

And the day and welcome to the national company's second quarter 2022 ourning conference call. particip will Al list only need assistance, Please conference speional by presressing the ke followed by the after today's presentation and will be operort ask Quest to ask question. May star than one under Jo to Jo question. Please star than two Please out the event day. coured would now to turn the conference to K the CAM head Investor relation. Please Co head the morning every one and welcome to the national company's second courarter 20 20- two earnings conference call on the call today from the company. Our presentident and ief execut Officer 20. our Executive Vice present and Chief Financial Officer change and monicillby now every one should access to the earnings release which was issued this morning proximally sevenvent and these turn timeour copy the release as well as the company's supple mental earnings presentation. Please visit national' website at W? W W national com facts Flash investorsthe call is the courted and every replay will be available on the company websitebefore we begin, the company would like to ourremind that today discussion will inclued a number of fourforward looking statement: the overfer national earnings release from this morning, as well as the company's most re at se C filing. We will see discussion of factors that could con the company's actual results to differentfer materily from these forward looking statement. Please, member national under TA no obligation to update V these forward looking statementthe company will also make a number of references to non-GAAP financial measure. The company believe these measures provide investors with these full pected on the underlying rends of the business and it has included in the earnings release a full recon reation of non-GAAP financial measures to the most comparable GAAP measurewhich can be found on national' website at W W? W national com Flash investors. And now is my pleasures turn the call over to twentythank the morning every one as reflected in our strong second quarter earnings are winning. Rest be te to drive results. Increase UE of our shareholders compared to prior year. This past quarter we inclcreaseed net sales the 8% to two point three Bill and we achieve ggjusted EBITDA of sixty one point eight million and impressive thirteenam 1% increase Turning courarterlylease segment performance. We improved our gth proof rate in both food distribution and military. Additionally, are Military sales positively impacted by a case increase of 3%. We are also pleaseed that our military EBIT margin improve year over year in the second quarter. Moving to our retail business, we gain the share and maintain momentum with the strong sto siles of 6% and we completeded the acquisition of the shop food centars at three sto mission grocery chain. We welcome our 400 new associates to the ash famililyoverall, we continue to make progress on our supply chain transformation goals. We exed the quarter with an impressive 9% improvement and three put rate year over year and we are reaffirming our current and lineines cost savings range of two 20, five mill the $35 million. Following the success of our supply chain transformationwe are enterizise about the launch of our merchandising transformation. This as a another Reed to our winning recipeover the past year. Product cost increases have out P underly commodity price changes and many category. Our team is an acttively tracting these trends and industry data. We have always always had a bus process from thenegotiating price. We are bling down on these efforts due to the presentcedented inflation, to the impact of these rising costs. We pro actively rlled out a new cost policc and new hance category planning program. The program include additional Chex and balances to insure cost increases are justiffive, which allows us the provide a more competitive offering to our customers and retail shops, strengthening our business. These actions will lease to top line growth and marg expansion, even during the earlyase stages. We are Please report that many leading venders our partnering with us. The five CRE solutution at the end of the day, when the consumer W we all W. importantly, the merchandising transformation include three key components: improving category management, grating merchandising capabilities and automing omtions and pricing. We are the initial stages of this initiative we. four providing more information on the expected benefits during our upcoming Investor Day I would discuss moment arly. Over the past year, we have invesested in our three courre capabilities: people operation, excellence and incights that drive solutionsas reminder these three court abilities and form our five strategic priorities, which are our: creating a people first culture, elevating execution to win the day trans forming the supply chain. Acting on incites, drive growth and launching consumer cent TR innoated solutions. Due to the success of our winning recipe and momentum in our results, we are increasing guid for the second time this year, the raises driven by our food distribution and military gth margin expansions, as well as the benefits we are capturing from our initivesj thirity tail on the call out: our adjusted EBIT, our rage of 2, our 20, Seven million dollars to 2, our $4 million, which now include the cost associated with the new merchandising transformation initiative. Now is turn to our long term financial targetentsthe ongoing success of our winning recipe. Give of confidence in the growth targets we in May this year to review compared to fiscal twotwentthousand 20: one by two thousand and 20: five we expected net saliles by lease we percent to more $1 billion and we expect to increase adjusted EBITDA by lease 40% to more. The three hundred million doll. Now how regoing to achieve target- great question. Our team diligently planning and Investor Day Ed for W day, November . Second, the imress of event will include a form presentation and Q and a, which will also be Li stre. Additionally, we will be hosting and trade show wewhere investors and andalylist interact with our executive team on our 1: one bases are very exc to share detailes at the event, which will include and update on our winning B and K PI, the long term benefits we expect capture from our supply chain transformation and more detailes on the merchandising transformation, inclued the exciting changes we are making and the initatives projected benefits.