BYRON TOWNSHIP -- Despite recently backing off plans to build two local stores,
says it's ready to expand its footprint.
The Byron Township-based grocer says its future looks brighter after fourth quarter results were better than expected, boosting overall 2010 year-end profits to the second highest in the company's 92-year history.
With signs that Michigan's long-suffering economy appears to be on a slow mend, the grocer predicts 2011 will be better than 2010.
The news apparently impressed the Street. The company's stock closed Thursday at $16.91, up $1.51 or 9.8 percent on Nasdaq after reaching a 52-week high of $17.22 in the midst of a down market.
For the fourth quarter, sales were $558.8 million for the period, down 4 percent from $581.3 million for the same period last year. Quarterly profits were $3.2 million or 14 cents per share, down nearly 62 percent from $8.4 million. When adjusted for a $4.8 million one-time charge, profits were 29 cents per share, beating analysts' expectations by 7 cents.
Sales for the year totaled $2.55 billion, down about 1 percent from $2.58 billion the year before. Profits hit $25.6 million or $1.14 per share, down 44 percent, from $36.9 million or $1.67 per share. Adjusted for the charge, the company's earnings per share is $1.29. Analysts, on average, expected $1.25.
The charge stemmed from the closing of the company's Plymouth warehouse as part of a consolidation expected to save the grocer up to $3 million a year.
As he looks to the future, CEO Dennis Eidson says he sees growth potential both in and out of the state.
Spartan currently operates 96 grocery stores statewide under the banners of Family Fare, D&W Fresh Markets, Glen's Markets, Felpausch Foods and VG's Food and Pharmacy. It also is a supplier to about 375 independent grocery stores in Michigan, Indiana and Ohio.
"We will be opportunistically seeking growth in the market or outside the state through acquisition," Eidson told analysts during a conference call Thursday morning. And smaller-scale growth will also come through the construction or remodeling of stores "where they make sense," he added.
After the meeting, Eidson says that approach continues to be a long-term strategy for the company.
In that vein, the grocer on Sunday will open Knapp's Crossing D & W Fresh Market near the East Beltline and Knapp Street. The full-service grocery includes a fresh market section intended to make the store a destination for foodies. It will offer a range of organic, international and freshly made foods not found at its other locations.
In the last quarter, Spartan stepped back from two high-profile planned stores.
-- Last month, Spartan scrapped plans to build an $8 million D & W Fresh Market store at Michigan Street and Fuller Avenue NE that would have served Medical Mile and the downtown. The uncertain economy made it too risky to make the investment, the company said.
-- In February, the grocer and its developer dropped plans to build a $9 million Family Fare store in Georgetown Township. Hit with lawsuits, the plan was controversial because it required the relocation of a Little League baseball site. The company declined to say how much the economy played in its decision.
E-mail Shandra Martinez: smartinez@grpress.com and follow her on Twitter at twitter.com/shandramartinez