COMMERCE, CA - Smart & Final sent waves through Wall Street Friday with its announcement of plans to file for an IPO. With 195 warehouse stores operating out of California, Arizona, and Nevada in addition to 52 Cash & Carry locations, Smart & Final intends to use the funds raised through its public offering to repay debt obligations and expand the Smart & Final Extra format, according to the Wall Street Journal.
The much larger Extra format stores have “typically resulted in significant increases in comparable-store sales and gross margin,” according to company executives who spoke with the Journal.
In order to file, Smart & Final says it could raise up to $100 million, although that number could change as they move closer to the offering date. So far the exact date of the IPO has not been released to the public, but the initial filing does list Credit Suisse, Morgan Stanley, Deutsche Bank, and Barclays Capital as underwriters. Initial plans have 'SFS' as the stock symbol Smart & Final will be trading under.
In its overview of the company last December, Moody's Investors Service was quoted as saying Smart & Final “continues to demonstrate its ability to compete effectively and maintain margins in a tough economic and competitive business environment,” although it did criticize its “weak” credit metrics.
According to StreetInsider.com, Smart & Final has enjoyed comparable store sales growth in 24 of the last 25 years, with 4.2% comparable store sales growth in 2014's most recent fiscal quarter. It had 4.0% comparable store sales growth with $3.2 billion in sales during 2013's fiscal year, a 5.5% increase in sales from 2012.
Good luck to Smart & Final as it moves closer to its IPO.
