Nash Finch hit by lower sales to grocers and military

With declining results in both its traditional grocery and military commissary operations, Nash Finch Co.'s first-quarter earnings fell 33 percent and missed Wall Street analysts' expectations.

The Edina-based food distribution firm said Friday that net earnings -- adjusted to exclude nonrecurring items -- were $6.2 million or 47 cents per share, compared with $9.3 million or 71 cents per share for the same time a year ago.

Stock analysts polled by Thomson Reuters were expecting earnings of 55 cents per share on revenue of $1.07 billion. Nash Finch reported sales of $1.06 billion, down 3.7 percent from a year ago.

Its shares fell 87 cents or 3.3 percent Friday, closing at $25.31.

Sales in Nash Finch's combined wholesale and retail supermarket business, which includes Econofoods grocery stores in Minnesota, decreased 6.2 percent to $527.3 million in the quarter.

The company said results were affected by declining sales to wholesale customers and the closing of six grocery stores since the end of the fourth quarter of 2010.

Operating earnings in the wholesale and retail business fell 36 percent. Lower food price inflation played a role in that decline, the company said.

Nash Finch is the largest grocery supplier to U.S. military bases, a business in which the company has been particularly investing in recent years.

During the first quarter, its military distribution sales declined 1.1 percent to $531.3 million, primarily because of decreased sales to overseas commissaries.

The military division's operating profits fell 11 percent. "We continue to be under pressure in this segment due to increased competition, but are resolute in our plan to deliver the first military distribution world wide platform," Nash Finch Chief Executive Alec Covington said in a statement.