Spartan Stores Inc., F3Q09 (Qtr End 01/03/09) Earnings Call Transcript

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2009-02-05 13:55:34.0

Tags: EBITDA, Environment, Lift, Call Transcript, Quarter, Earnings, Spartan Stores Inc., Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) We will go first to the side of Karen Short with FBR Capital. Your line is open. Please go ahead.

Karen Short - FBR Capital

Hi, great quarter.

Dennis Eidson

Thank you.

Karen Short - FBR Capital

A couple questions, I guess start with retail. Retail in the competitive environment in general, I just wondering if you could give us some color around what you are seeing in the competitive environment, are there any competitors that are feeling some pain particularly? And what you are seeing in terms of your market share? And then, I guess, the second question on the retailers. Can you maybe just go in there little more color on what is driving the improvement in EBITDA margins to retail, and where do you think it could go?

Dennis Eidson

Sure. From -- on the competitive fronts, as you know notwithstanding the five weeks we have owned the VG’s brand. Our primary competitors that are corporately own stores our super centers it's either Super Wal-Mart or Meyer. And I would say that the competitive environment hasn’t changed dramatically. I think we’re all searching for ways to really add more value to the consumer, and I think maybe you had a little bit of lag up on some of the things we have done and particularly is it relates to strength our private label program. We use Nielsen to track market share and there is good and bad the ugly when you are using syndicated data, I'd suggest that the numbers would tell us that we are building market share in our corporate retail geography, and we feel pretty good about that.

In terms of the EBITDA, obviously the comp sales store growth certainly that did not hurt but I would tell you that we have a reluctant focus on our SG&A lines as well. And I think that the team here is done an outstanding job of squeezing cost out of the system without impacting the consumer, and I think that's been big driver as well. But we're I know it’s a tough environment but we are feeling pretty good about where we are.

Karen Short - FBR Capital

Okay, do you have some color on private label penetration and what it increased by I guess sequentially at both distribution and retail?

Dennis Eidson

Yes, we do. On the corporate retail side, in the quarter, again this is AC Nielsen data in units, in the quarter we were in 26.4% penetration, and that compares to 23.7% a year ago, so significant lift. And 26.4% compares to the U.S. average 23.36%, so again the nice lift for the U.S. On the distribution side, we are taking corporate number here, see for the quarter were at a 21.63%.

 

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