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SpartanNash Q3 Earnings: Is NasdaqGS:SPTN Cheap at 0.9x Price/Book?

in EARNINGS/INVESTING IDEAS by

SpartanNash Company (NasdaqGS:SPTN) is scheduled to report Q3 earnings results after markets close for trading on November 11, 2020.

The company is expected to report earnings of $0.60/share on revenue of $2.137 billion. The consensus earnings per share (EPS) of $0.60/share is based on a poll of 6 analysts and represents a growth in eps of 101.6% over the same quarter last year, when the company reported earnings of $0.30/share.

The revenue forecast of $2.137 billion based on a poll of 4 analysts implies a year-over-year (YoY) growth in revenue of 6.9%. Last year the company reported $2 billion in revenue for the quarter.

Expected to report EPS growth of 101.6% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $2,137.04 $1,999.81 6.9%
EPS $0.60 $0.30 101.6%

Earnings Call Trends

Historically, management has exceeded analyst expectations 3 out of the last 8 tracked quarters, missed 4 quarters, and met expectations 1 quarter.

What are your expectations from SpartanNash Company for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.63 $0.73 16.3% Beat
Q1, 2020 $0.48 $0.67 38.1% Beat
Q4, 2019 $0.27 $0.23 −13.7% Missed
Q3, 2019 $0.38 $0.30 −20.3% Missed
Q2, 2019 $0.34 $0.34 0.0% Met
Q1, 2019 $0.31 $0.24 −21.9% Missed
Q4, 2018 $0.38 $0.32 −16.3% Missed
Q3, 2018 $0.48 $0.50 3.4% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending July 11, 2020, the stock price reacted by falling −6.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 12, 2020 $21.58 $20.25 −6.2% Decline
May 27, 2020 $20.60 $20.68 0.4% Increase
February 19, 2020 $13.30 $14.74 10.8% Increase
November 6, 2019 $13.99 $12.63 −9.7% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.94, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.94 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

SpartanNash Company is currently trading at $18.45/share, up 0.2% for the day. The company is trading at approximately 77.7% of its 52-week high of $23.94/share. The company’s stock price is down −8.9% since the last earnings report and down −1.5% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 50.40 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:SPTN Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 13.12 and a forward P/E multiple of 7.07.

SpartanNash Company’s current share price also implies a price-to-book (P/B) multiple of 0.91. The following table summarizes some other key fundamental ratios:

Data as of November 9, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date July 11, 2020
Stock Price (Current) $18.45
P/E Ratio 13.1x
P/E Ratio (Fwd) 7.1x
PEG Ratio 0.0
Total Debt / Total Capital 57.3%
Levered Free Cash Flow $200.9 million
EV / EBITDA 7.8x

Finbox

SpartanNash Company is a small-cap stock with a market capitalization of $641.6 million and a total enterprise value of $1.469 billion. The company operates in the Consumer Staples sector and the Food & Staples Retailing industry.

SpartanNash Company distributes and retails grocery products. It operates in three segments: Food Distribution, Military, and Retail. The Food Distribution segment offers approximately 52,000 stock-keeping units, such as dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, seafood, floral products, general merchandise, beverages, tobacco products, health and beauty care, and pharmacy products to independent retailers, national retailers, food service distributors, e-commerce providers, and corporate owned retail stores. This segment also offers various value-added services to retailers. The Military segment sells and distributes grocery products to military commissaries and exchanges located in 39 states across the United States and the District of Columbia, Europe, Cuba, Puerto Rico, Honduras, Bahrain, Djibouti, and Egypt. The Retail segment primarily operates neighborhood supermarkets. As of March 17, 2020, it operated 155 supermarkets, primarily under the banners of Family Fare, Martin’s Super Markets, D&W Fresh Market, VG’s Grocery, and Dan’s Supermarket. SpartanNash Company also markets and distributes private brand items primarily under the Our Family, Open Acres, Good to Go!, Nash’s Coffee, Crav’n Flavor, Culinary Tours, Top Care, Tippy Toes, Full Circle Market, Culinary Tours, PAWS Happy Life, Pure Harmony, Red Button Vintage Creamery, Stoked, and That’s Smart! brands. The company was formerly known as Spartan Stores, Inc. and changed its name to SpartanNash Company in November 2013. SpartanNash Company was founded in 1917 and is headquartered in Grand Rapids, Michigan.

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