SpartanNash Company

Thank you for standing by. Welcome to the Spartanage first quarter fiscal 2025 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. I would now like to turn the call over to Kaylee Campbell, Spartanage Head of Investor Relations. Kaylee?

Thank you and good morning. On the call today from the company are President and Chief Executive Officer Tony Sarsom, and Executive Vice President and Chief Financial Officer Jason Monaco. By now, everyone should have access to the earnings release, which was issued this morning at approximately 7 a.m. Eastern Time. For a copy of the earnings release, as well as the company's supplemental earnings presentation, please visit Spartan Ash's website. This call is being recorded, and a replay will be available on the company's website. Before we begin, the company would like to remind you that today's discussion will include a number of forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. If you will refer to Spartan Ash's earnings release from this morning, as well as the company's most recent SEC filings, you will see a discussion of factors that could cause the company's actual results to differ materially from these forward-looking statements. Please remember that all forward-looking statements made today reflect our current expectations only, and Spartan Ash undertakes no obligation to update or revise these forward-looking statements. The company will also make a number of references to non-GAAP financial measures. The company believes these measures provide investors with a useful perspective on the underlying growth trends of the business, and it has included in the earnings release a full reconciliation of certain non-GAAP financial measures to the most comparable GAAP measures. which can be found on Spartan Ash's website. And now, it is my pleasure to turn the call over to Tony.

Thank you, Kaylee, and good morning, everyone. Glad to be here. I would first like to take a moment to welcome our summer 2025 intern cohort. This summer, we are hosting 89 students from 35 universities across the country. With a focus on developing talent and the next generation of leaders, our internship program is a key component of our People First culture. And we are proud to say that our award-winning internship program has now welcomed 300 students over the past three years. Thank you for spending the summer with us, interns. We look forward to learning and growing together. All right, let's shift gears to the first quarter results. We had a fantastic first quarter, beating our budget and delivering a record-breaking adjusted EBITDA of nearly $77 million. And building on last year's momentum, we posted another quarter of growth. In Q1, our sales increased 3.7% to over $2.9 billion. Our retail segment results were strong with a 1.6% increase in comparable store sales. This was despite inclement weather conditions in our core market. And on top of that, the stores we acquired in 2024 contributed to our strong sales results. Notably, retail performance was up against a tough backdrop. Following the historic ice storm in late March, nearly 10% of our stores were impacted for a few days in our core market. The total effect on our comp from these temporary closures was 80 basis points. I want to thank the team for jumping into action when our customers needed us. In addition to donating two truckloads of food and water, some of our Michigan stores provided additional relief to the communities we serve. This included hot meals, product donations, and discounted groceries. Thank you to the associates who stepped up to help our neighbors in a time of need. Now, on to the wholesale segment. Overall, we are pleased with wholesale's performance. Net sales for the segment were nearly $2 billion. Although there was expected softness in our national accounts channel, these volume pressures were partially offset by higher sales in the military channel. The military business has grown 13 consecutive quarters. Okay, pivoting back to the bottom line. Both adjusted performance metrics, EBITDA and EPS, were ahead of our expectations. Again, adjusted EBITDA came in at a record $77 million for the quarter. This was a 2.6% increase compared to the prior year first quarter. Overall, we had a very strong quarter. Sales were up, retail comps were positive, wholesale margins improved, and bottom line results delivered. And we were able to maintain strong margins while investing in our transformational initiatives. Congratulations to the team for a stellar quarter. Now, let's discuss the current environment we're operating in. Our recently launched cost leadership program is designed to improve our cost structure and add earnings certainty. The program is expected to deliver $50 million of annual benefits within your gains this year of approximately $20 million. The program enables us to invest in growth and expand margins, all while offsetting industry headwinds. Some examples include leveraging our scale to deliver more procurement benefits, implementing automated solutions in our DCs, and establishing new retail processes to ensure effective labor spend and time efficiencies. Speaking of our retail processes, this is a good segue into the discussion about the next phase of our strategic plans. Since 2021, our strategic plan has generated more than $130 million from our margin enhancing initiatives, including our supply chain and merchandising transformation. The next logical step of our strategic plan is to unlock the significant potential of our retail business. With new leadership in retail, associates have been relentless in their efforts to achieve operational excellence. Within the past few months, the team has implemented initiatives which are improving execution while enhancing the shopper experience. Although our shoppers are looking for low prices, they're really seeking overall value. And we're focused on providing the right balance in our retail stores, price and value with a differentiated offering. As one example, we acquired Metcalfe's Market last year, and they established the world's largest bratfest in Madison, Wisconsin. This summer, we are leveraging the spirit and branding from that event and highlighting what differentiates our retail stores. We're making Bratwurst fresh in-house daily with a unique flavor featured every week. This is a new in-store destination and summer grilling campaign available in all of our Family Fair, D&W Fresh Market, and Martin's Supermarkets. We're really enjoying some grill thrills with this one. giving shoppers a chance to relish in a variety of new flavors. And during the first week of the summer, Brat sales were up a sizzling 148%. All right. So as discussed last quarter, we plan to continue investing in our retail segment through three growth platforms. One, expanding our capital deployment into select conventional and upmarket store remodels. Two, leaning into the attractive convenience store sector. And three, in leveraging our capabilities in the Hispanic food markets by growing our ethnic store footprint. Speaking of growing our Hispanic food markets, I was honored to be part of the company's largest ever grand opening event. Our newest Supermercado Nuestra Familia in Omaha, Nebraska, expands access to culturally relevant products and services. Thank you to the retail team for introducing this store to the community in a memorable one-of-a-kind event. As I hope you can tell, we have a lot going on, and that's why our team is energized about the future of Spartan Ash. We continue to execute our strategic plan and deliver on our commitments. As you may have seen in this morning's earning release, we beat our internal expectations and we are reaffirming our yearly guidance despite the macro environment. Our results to date, as well as our expectations for growth programs, give us confidence that we will achieve the 2025 targets we laid out in February. And with that, I'll now turn the call over to Jason to walk you through the quarterly financials in greater detail.