Spartan Stores: Ready for the Competition

Over the past several years, while the grocery industry was experiencing significant consolidation, Spartan Stores (SPTN) began to implement its strategy of owning and operating retail supermarkets. This plan should enable the company to compete more effectively in this rapidly changing and dynamic business. Spartan Stores owns and operates 68 supermarkets and 19 deep-discount food and drug stores in addition to distributing to more than 350 supermarkets.

The Company expects to close on the acquisition of 20 retail stores from G&R Felpausch Company, in the first quarter of 2008.

SPTN Investor Highlights

Consolidated net sales for the 13-week fourth quarter increased 23.6 percent to $559.5 million from $452.8 million in last year's 12-week fourth quarter.

Operating earnings improved for the fifth consecutive quarter, increasing 34.2 percent to $14.0 million from $10.4 million in the same period last year.

Net sales have improved by at least 12 percent for the past four quarters and operating earnings have grown by double digits in nine of our last 11 quarters.

Net earnings for the quarter increased 36.4 percent to $7.2 million, or $0.34 per diluted share, from $5.3 million, or $0.25 per diluted share, in the same period last year.

Reduced outstanding borrowings by approximately $19.2 million during the fourth quarter. The reduction in outstanding borrowings was the result of improved cash flow from operations due to higher earnings and improved inventory turnover rates.

Added to Standard & Poor's Small-Cap 600.

Entered into a purchase agreement to acquire 20 retail grocery stores, two fuel centers and three convenience stores, from G&R Felpausch Company.

Spartan Stores is the nation's tenth largest grocery distributor with warehouse facilities in Grand Rapids and Plymouth, Michigan.

The Company distributes more than 40,000 private-label and national brand products to over 350 independent grocery stores in Michigan, Indiana and Ohio. Spartan Stores also owns and operates 68 retail supermarkets and 19 deep-discount food and drug stores in Michigan and Ohio, including Family Fare Supermarkets, Glen's Markets, D&W Fresh Markets, and The Pharm.

SPTN 1-yr chart

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[investgeek]

five days later ...

SPTN now down 8%. Another SeekingAlpha guru is born.