After ‘exceptional’ year, Smart & Final set for record expansion

Smart & Final’s value oriented brand of food retailing is resonating with shoppers and that has the company eyeing roughly 40 new stores in 2016.

The Commerce, Calif.-based operator of 276 stores said its sales increased 18.9% to $998 million (due to an extra week in the reporting period) and same store sales increased 3.5% during the quarter ended Jan. 3. The growth is impressive considering many food retailers have bemoaned a lack of food price inflation as a headwind to same store sales growth. Smart & Final also faced that challenge and its comp increased was driven entirely by increased transactions.

"2015 was an exceptional year for Smart & Final Stores. Our focus on execution positioned us to deliver strong top-line sales growth and record bottom-line financial performance,” said David Hirz, Smart & Final’s president and CEO. “We completed our 2015 store development plan, which included expanding our Smart & Final Extra! store base by nearly 30% and adding two new Cash & Carry stores. Additionally, we continued the successful roll-out of key merchandising initiatives, which helped contribute to our 26th year of positive comparable store sales over the past 27 years."

Profit during the quarter, adjusted to exclude the effect of an extra week in the reporting period, increased 19.5% to $14.7 million, or 19 cents a share, compared to $12.3 million, or 16 cents a share. For the year, adjusted profits increased 21% to $56.3 million, or 73 cents a share.

"We've set a new standard for growth at Smart & Final Stores and have made the necessary investments to support an accelerated pace of expansion in 2016,” Hirz said. “We plan to increase our Smart & Final banner store base by 15% this year, driven by the successful acquisition of 33 store leases and related assets in central and southern California previously operated under the Haggen banner. In addition, we plan to open four to five new Cash & Carry stores in 2016."