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A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure and other information as required by Regulation G is included in the company's earnings release, which was issued after the market closed yesterday. And it's now my pleasure to turn the call over to Dave.

Dave Staples -- President and Chief Executive Officer

Thank you, Rachel. Good morning, everyone and thank you for joining us today. The format of today's call will include my brief overview of the first quarter as well as an update on our business. Mark will then provide additional detail on our operating and financial results before we open the call for your questions. I will begin by saying we are pleased with our financial performance for the quarter as our financial results were in line with our expectations and we delivered on our key strategic objectives.

Our performance included strong execution and solid first quarter top-line growth, with a 3.7% increase in food distribution sales, a 3.2% increase in military segment sales, and a sequential improvement in comparable store sales in our retail segment. Each of our businesses continued to benefit from positive customer response to our innovative solutions, excellent customer service, and extensive distribution network. We remain extremely focused on executing our strategy and believe that we are well positioned to continue to deliver on our strategic priorities of building an innovative and flexible national supply chain network, a diversified distribution company with strong value-added fresh offerings, and a retail brand that resonates with today's consumer. Now, let's take a look at our results from strategic initiatives across the operating segments during the quarter. Beginning with food distribution, where our 3.7% sales growth was driven largely by incremental sales to existing customers as we continuously improve and expand our offering, we remain very pleased with this performance as we begin to offer a more differentiated service to retail store operators of all sizes.

Our performance is even more impressive when you consider that we are still cycling the significant loss of sales volume to a large customer that has reorganized its operations after experiencing financial difficulties. With respect to Caito, we experienced a significant improvement in the productivity and profitability in our distribution in food processing operations this quarter. As discussed last quarter, we have taken a number of steps to support the management team and systems at Caito and these actions are bearing the results we had hoped. I am pleased to report that Caito's margins improved sequentially from the fourth quarter and continue to improve as we progress into the first quarter. Additionally, we expect to see increasing traction in these operations, as we implement further productivity enhancements and begin realizing the sales pipeline developed by the team over the remainder of the year.

We remain optimistic about our prospects in this space as we see significant interest in our capabilities from a variety of prospective partners ranging from retailers, food manufacturers, and foodservice companies. During the first quarter, we held our annual model store event featuring our latest marketing, merchandising and design programs. I am proud to announce that this event was once again held at a store of one of our independent customers. I believe our customers allowing us to be part of their store, demonstrates the level of trust we have created in these relationships. We have now held the last three model store events at a different customers' location.

Even more importantly, the response from our independent store owners and managers in attendance was fantastic that they were able to see firsthand, the new and innovative marketing and merchandising programs that our team is providing to help them succeed in the current environment as well as a fantastic store of one of their peers. Programs like these demonstrate our commitment to partnering with customers to develop new ideas and solutions that will move their business forward. Lastly, while the primary focus of our supply chain team is efficiency, keeping our customers cost low, we are also making investments to optimize our network, improving product quality and variety, better helping our customers to enhance their operations. As a result, we anticipate continued strong sales growth with our existing food distribution customers. Turning to our military segment, we continue to deliver improved sales and earnings as we benefit from a combination of new business in the Southwest and from the expansion of DeCA's private brand program.

While the segment operates in a difficult environment, we are continuing to find new ways to increase volume and effectively manage costs to drive best-in-class efficiency. So far this year, we have partnered with DeCA to introduce approximately 70 new private brand products, ending the latest period with close to 520 products in the system. We are collaborating with DeCA in the release of an additional product throughout the remainder of 2018 and expect this growth to partially offset the cycling of the expanded business in the Southwest, which began in the third quarter of 2017. In the retail segment, despite a highly competitive environment, we achieved a sequential improvement in comparable store sales across geographies. We have built upon our ongoing initiatives to introduce new brand positioning, products, pricing strategies and convenience driven solutions.

We have completed design concepts related to our brand repositioning for the family fare banner, resulting in an offering more in tune with today's trends of health and wellness, value beyond price, unique offers, and a community focus. We are very excited by the initial results of our first few test stores, where these concepts have been implemented and expect to complete four additional remodels this year. If these results continue as expected, we anticipate even more remodel and launch activity next year. Additionally, we remain committed to technology and the expansion of Fast Lane, our online ordering and pickup service as well as other click-and-collect services.

Online ordering for delivery and curbside pickup are now available over 35% of our retail locations and are expected to reach over 60% of our stores by the end of 2018. We will also be testing scan and bag technology in certain locations. This technology allows customers to use a cellphone app, scan items while they shop the store, significantly improving the checkout experience. And with that, I will now turn the call over to Mark.

Mark Shamber -- Chief Financial Officer

Thanks, Dave. I would like to begin my comments by highlighting our first-quarter diluted EPS and sales growth before delving into our financial results in greater detail. Adjusted diluted EPS came in at $0.55 for the first quarter of fiscal 2018, which was the same in fiscal 2017's first-quarter adjusted diluted EPS. On a GAAP basis, the company earned $0.34 per diluted share in the quarter compared to diluted EPS of $0.40 per share in the first quarter of fiscal 2017.

Net sales for the first quarter of fiscal 2018 increased to $2.39 billion, an increase of $31.4 million or 1.3% over 2017's first-quarter sales of $2.35 billion. As a reminder, sales in both periods reflect the new accounting standard, ASC 606, whereby certain contracts in the food distribution segment are reported on a net basis compared to previously being reported on a gross basis. Shifting to our different businesses, food distribution net sales increased by $41.1 million or 3.7% to $1.16 billion driven largely by sales to our existing customers partially offset by headwinds from lapping a prior year customer reorganization. Excluding the impact of this activity, our net sales increased by 5.8%. We experienced inflation of 97 basis points in food distribution during the quarter, a decline of 44 basis points compared to inflation coming in at 1.41% in the fourth quarter.

On a year-over-year basis, we are up approximately 268 basis points over the prior year's deflationary first quarter. From a department perspective, the primary drivers of the sequential decline in inflation rates consisted of dairy, meat and produce. The remaining department showed more modest declines. Consistent with our commentary from the last couple of quarters, we expect inflation to increase sequentially as it heads toward normalized historical levels. First-quarter operating earnings for food distribution of $24.5 million approximated the prior year's $25.3 million impacted by the shift and timing of certain supplier programs and higher transportation costs partially offset by lower M&A and integration expenses and lower losses in our Caito business.

In the middle of the quarter, Caito's Fresh Kitchen business transitioned out of the start-up phase and a portion of those losses are now reflected in both GAAP and adjusted operating earnings. Adjusted operating income totaled $29.5 million in the quarter versus the prior year's fourth-quarter adjusted operating income of $33.1 million as a result of the previously mentioned items. Our military segment's net sales increased by $20.3 million or 3.2% to $663.6 million for the quarter compared to $643.3 million in revenues in the prior year's first quarter. Consistent with our commentary on the last couple of quarterly earnings conference calls, increased sales in private brands and additional sales volumes from new commissary business obtained in the Southwest more than offset comparable sales declines as commissary locations we serve. Operating earnings from the military in the first quarter totaled $1.5 million, an increase of $0.6 million compared to earnings of $0.9 million from the prior year's first quarter. Incremental sales volume, lower healthcare costs and improvements in margin led to the earnings growth partially offset by higher transportation costs.

On an adjusted basis, the military segment's operating earnings also increased by $0.6 million on a year-over-year basis to $1.6 million for the first quarter of fiscal 2018 compared to $1 million in 2017's first quarter. Finally, our retail segment's net sales came in at $566.2 million for the quarter versus $596.2 million for the same period last year. Approximately $21.3 million of the sales decline related to the sale or closure of retail stores, with the balance driven by a decrease in comparable store sales of 2.2%, excluding fuel. Higher year-over-year fuel prices partially offset these declines. In connection with our continued store rationalization initiative, we closed 3 stores during the first quarter and we finished the quarter with 142 stores. The retail segment reported a GAAP loss of $0.3 million for the first quarter compared to operating earnings of $3.4 million in the prior year's first quarter due to approximately $4.5 million and higher restructuring charges associated with store closures as well as investments in margin and lower comparable store sales partially offset by lower healthcare costs.

Adjusted operating earnings in retail for the first quarter of 2018 totaled $4.7 million, an increase of $0.3 million over the $4.4 million in the prior year's first quarter. Interest expense increased by approximately $1.5 million to $8.8 million in the first quarter of fiscal 2018 due to a combination of higher interest rates and higher average debt levels than the prior year. From an operating cash flow perspective, on a consolidated basis, we generated $60.4 million in the first quarter versus a use of $10.3 million during the prior year's first quarter. The higher operating cash flow was primarily due to reductions in working capital as we have previously referenced that working capital was unseasonably high at the end of fiscal 2017. We generated $39.3 million of free cash during the first quarter compared to a use of $29.8 million in 2017's first quarter. During 2018's first quarter, we paid a quarterly cash dividend of $0.18 per share, an increase of 9.1% from the prior year, totaling $6.5 million.

This equates to an approximate 4% dividend yield at the stock's current trading level. We also repurchased approximately 952,000 shares of our common stock for $20 million during the quarter at an average price of $21.01 per share. Our total net long-term borrowings decreased by $10.5 million to $723.8 million at the end of the quarter compared to $734.3 million at the end of fiscal 2017, with reductions in accounts receivable and inventory being partially offset by the lower accounts payable levels and the share repurchases noted above. Our net long-term debt-to-adjusted EBITDA ratio was effectively flat at 3.1:1 versus year-end as the company paid down long-term debt in connection with working capital returning to more normalized levels, while also repurchasing common stock.

We expect this ratio will continue to improve in 2018 as we utilized the free cash we generate to reduce our debt levels. As covered in yesterday's press release, we are updating our guidance for the first half of fiscal 2018 and updating sales and certain other components of our 2018 guidance and reaffirming adjusted earnings guidance for the full-year fiscal 2018. We continue to anticipate year-over-year sales growth in the food distribution segment, driven primarily by sales to existing customers and incremental contributions from Caito's operations. In the military segment, our commissary business in the Southwest will continue to positively contribute to comparisons in the second quarter. We will also benefit from the ongoing expansion of the private brand program in our partnership with DeCA.

The company expects that its retail stores' comparable sales run-rate will improve over the remainder of the year as the stores benefit from the company's new positioning of its offerings. We also continued to anticipate 2018 adjusted earnings per share from continuing operations to be approximately $2.20 per share to $2.32 per share, excluding adjusted expenses and gains, an increase of 4.8% to 10.5% from adjusted EPS of $2.10 in fiscal 2017. This excludes approximately $8 million to $10 million of expenses associated with store closings and Fresh Kitchen start-up costs. As I mentioned a few moments ago, the Fresh Kitchen transitioned out of the start-up phase midway through the first quarter of 2018 and its results are now reflected in our food distribution segment. From a GAAP perspective, we expect that reported earnings from continuing operations be in the range of approximately $1.98 to $2.10 per diluted share compared to a loss from continuing operations of $1.41 in the prior year.

This guidance reflects an effective tax rate of 23.5% to 24.5% for fiscal 2018. We are also updating our guidance for interest expense and now expect total interest expense to be approximately $26 million to $28 million. For the first half of fiscal 2018, we expect adjusted earnings per share to be below the prior year adjusted earnings per share of $1.15. We anticipate that results will be $0.02 to $0.06 below the prior year due to the shift in timing of certain supplier programs, a delay in the launch of a significant new customer program, and a challenging retail environment partially offset by our sustained sales growth, benefits of tax reform and Caito's Fresh Kitchen operations sequential improvement. We continue to project that capital expenditures for fiscal 2018 will be in the range of $60 million to $70 million and that depreciation and amortization will range from approximately $80 million to $88 million. I will turn it back over to Dave.

Dave Staples -- President and Chief Executive Officer

Thank you, Mark. In conclusion, despite a highly challenging environment, we have continued to demonstrate our adaptability and ability to grow sales volume in the food distribution and military segments as well as drive sequential improvements in our retail sales. We are excited about the interest we are seeing in the fresh offering provided by Caito and are pleased with the operational improvements made to-date. As we continue to enhance and develop new and innovative solutions for our customers, we are confident about our prospects for 2018 and beyond and we believe that our strategic initiatives combined with the strength and stability of our extensive distribution network will enable continued long-term growth. With that, I would like to turn the call back over to the operator and open it up for any of your questions.

Questions and Answers:

Operator

[Operator instructions]. The first question comes from Chris Mandeville of Jefferies. Please go ahead.

Chris Mandeville -- Jefferies --Analyst

Hey, good morning, guys.

Dave Staples -- President and Chief Executive Officer

Good morning, Chris.

Chris Mandeville -- Jefferies --Analyst

Dave, I was pleasantly surprised by the retail adjusted EBIT margin improvement in the quarter. I guess I am just curious how sustainable you view that expansion is going forward as you continue to cull presumably some stores that are in the red, all while your sales and marketing efforts take hold? And then how are you feeling on the pricing front in order to maintain sequential comp momentum going into the rest of the year?

Dave Staples -- President and Chief Executive Officer

I guess, Chris, overall, yes, we were pretty happy with the performance this quarter in the retail group as well. I think as I look forward it's certainly a competitive environment. There is a lot of pricing pressure in the markets we operate but that's nothing we haven't dealt with before, right. It happens and I think we have demonstrated in the past our ability to work through that.

As you look at our guidance for the remainder of the year, we expect our business overall to improve. I think on the retail side of the business, it will continue to be competitive and it will be a challenging environment but I think over the long-term, our programs and the types of things we are putting in place are going to build us an even stronger retail operation than we have today.

Chris Mandeville -- Jefferies --Analyst

OK. And Dave, you also mentioned that you guys were relatively happy with some of your recent remodels, is there any color or context you can provide around the actual uplift observed as we think about maybe the potential to accelerate that program in the out years?

Dave Staples -- President and Chief Executive Officer

Yes. I don't want to get into the specifics too much only because it's really a new program for us and one that I think is going to really be a differentiator in our markets but we have seen just substantial growth in our customer satisfaction scores across the board in our fresh departments. I think we were all really even surprised with how quickly our customer satisfaction scores increased and to the levels, they increased too in such a short time. I think we will see very solid I would say mid to double-digit increases in stores if this goes as planned as we roll it out.

I mean to give you a little bit of a general thought.

Chris Mandeville -- Jefferies --Analyst

OK, that's helpful. And then the last one for me, Mark, I apologize for missing this here but in terms of the wholesale inflation outlook for the rest of the year, can you just remind us again what you are looking for as it did split a little bit sequentially? And I guess just maybe generally, what's the ability to potentially offset wholesale pressures if they were to continue to slip a little bit potentially?

Mark Shamber -- Chief Financial Officer

Yes. I mean, I think what we expect for the remainder of the year seems to be changing by the day. I mean, we saw a little bit of sequential decline in the fifth period that we just kind of finished up but we have also been hearing some of the CPG companies, not necessarily a groundswell of CPG companies but we have also started to see some announcements from the CPG folks that they are putting through price increases. And so not comfortable necessarily putting out a target but I think that we are going to see a little bit of a slide deck and then when these price increases start to materialize, I have to admit that I haven't read enough of their releases in their earnings calls to see when they plan to push these through but I think as we get into the back half, we will start to see it rise a little bit.

I am not necessarily sure where it will settle but I think we will continue to see a little bit of a slide down that we have seen from the fourth quarter into the first quarter and then the first period of our second quarter before inflation takes that hold, particularly as some of these folks try to recapture the expenses they are incurring for transportation.

Chris Mandeville -- Jefferies --Analyst

And sorry just one quick follow-up there, in terms of the vendors whom you are hearing, maybe looking to pass on price, is it specific to any one departments and really I think maybe at a high level, what's the willingness for your retail locations as well as for your customers on the wholesale front being able to accept these cost increases?

Dave Staples -- President and Chief Executive Officer

Yes. I would say, it's not in any one department. And I would say, our model distribution is as we pass on price increase goes in. At retail, that's a very specific situation but predominantly, price increases pass on, it would just see unique competitive circumstances where they may not but I would say typically, people will pass on the price increases they get from the manufacturers.

Chris Mandeville -- Jefferies --Analyst

OK, guys. Thanks again and see you next month.

Operator

The next question comes from Paul Trussell of Deutsche Bank. Please go ahead.

Paul Trussell -- Deutsche Bank -- Analyst

Good morning. Thanks for taking that question. So wanted to maybe just start with the DeCA private brand program and how that's expanding, maybe just provide an update on how we should think about the SKUs and penetration and opportunity for that program? And then on the retail side, if you can just give maybe a little bit more detail around Fast Lane and the customers' reception to that offering?

It does. Thank you.

Dave Staples -- President and Chief Executive Officer

Yes. And then as far as retail and Fast Lane, we are totally excited about the customer response. So, we measure our customer satisfaction. Well, we provide a random sample of customers continuous opportunity to rate us on their experience and they do that by receiving a code on their receipt that they can then either use a telephone or a computer or a cellphone to respond to a survey about how their experience was.

And from a Fast Lane perspective, based on the responses we get, our customers are overjoyed with our experience. We have somewhere in the area of 80% of our customers rating us a 5 out of 5 overall on their satisfaction. So, I don't think we could expect to have done much better than that. And so across the spectrum of our ratings, we feel really good.

We think our ratings stack up incredibly well against anybody who is trying to do this and so, so far so good and it keeps growing for us. So from that perspective, we are pretty excited.

Paul Trussell -- Deutsche Bank -- Analyst

Thank you and best of luck.

Dave Staples -- President and Chief Executive Officer

Thank you.

Operator

The next question comes from Scott Mushkin of Wolfe Research. Please go ahead.

Mark Shamber -- Chief Financial Officer

No. I would say that the delay in the new customer program is certainly a piece. I would say that the supplier program is not really a change from where we were but the impact that we felt, tax related to our share-based compensation vestings in March and April, which were in the first quarter sort of negatively impacted us north of $600,000 from a tax perspective, which sort of softened our first-quarter results more than we were anticipating. And so that's sort of the other factor, there is an update from what we had given on the fourth-quarter earnings call in late February.

Mike Otway -- Wolfe Research -- Analyst

OK. And then I guess since you guys maintained guidance for the full year, is there expectation that the second half maybe a bit stronger than you thought when you outlined guidance in the fourth quarter. How should we think about kind of interplay between those two?

Mark Shamber -- Chief Financial Officer

Well, I think that we always felt that the second half was going to be stronger than first. I am not sure as I sit here, I can say that it's any more or any less than we had given the previous guidance. I think that we still feel very comfortable with the range that we have out there but we wanted to sort of clarify as to when we gave the first half guidance, we had an internal expectation on how the quarters would play out and the first quarter played out probably in line with our expectations barring the tax impact there that I just referenced. And on the second quarter, we wanted to update because the customer program that we referenced, we had expected to start earlier and now it looks like it will start sometime in the month of June.

And so we felt that we needed to sort of give a bit of a clarification there to folks now that we reported the first quarter. So, I wouldn't say that the second half has moved significantly from one way or the other from what we had previously expected but the first quarter played out a little bit lower than we expected due to the tax and the delay in the program is certainly going to impact the second quarter.

Mike Otway -- Wolfe Research -- Analyst

OK. That's really helpful. And then I guess the second question on the food distribution business. I think Dave you may have said that the 3.7% growth was driven mostly by incremental sales from existing customers.

So I guess my question is I am trying to understand the health of the businesses that you are distributing to, are they doing better this quarter than they have in the last few quarters? Are they positive comping or is it really just all additional volume that you guys are supplying to these folks?

Dave Staples -- President and Chief Executive Officer

I think there is no one simple answer. I think we have some customers that are doing very well and I think we have some customers that are doing fine. And then I think we have some customers probably that are finding it challenging. And I think that's the way it always has been.

I mean our independent base and I guess our entire customer base, they are very diverse. I mean, we have very high-end retailers. We have very strong middle-market retailers. We have some value retailers.

The good news with our customer base, I guess, is it's predominantly county seats, tourism towns, strong markets, more of the smaller sized Metropolitan markets that are doing fairly well. So, our customer base is pretty well positioned. So, I think it's not a simple answer. I think we are working well with all different types of our customers.

And like I say, I think all-in-all, they are hanging in there pretty well in this environment.

Mike Otway -- Wolfe Research -- Analyst

OK. I appreciate the color. Thank you, both.

Dave Staples -- President and Chief Executive Officer

Sure. Thanks.

Operator

The next question comes from Kelly Bania of BMO Capital. Please go ahead.

Kelly Bania -- BMO Capital Markets -- Analyst

Hi, good morning. Thanks for taking my questions. Also just wanted to ask about the margins in the food distribution segment, I think with the growth you are having there, it's still down quite a bit but I guess there is some noise from the accounting change. So can you just walk us through some of the drivers there and if we can expect some similar margin compression in Q2 and beyond?

Mark Shamber -- Chief Financial Officer

Yes. I mean, I think when you are talking the margins, Kelly, I mean, I think one thing to factor is that well, let me take a step back. On the food distribution reference to the new accounting standard that actually would help the margins versus hurt the margins because we are reporting it on a net basis. So really all we are getting from an income statement perspective is just the profitability of it, not necessarily the sales and gross margin side of things but as it relates to the rest of the business, I think what's probably driving the sequential compression that you are referencing is the Caito business on the Fresh Kitchen side, as much as there was a sequential improvement, that business is still losing money and we expect it to turn toward the end of the second quarter and we get into the third quarter but that is being reported for two of the four periods that are in our first quarter in our GAAP numbers and not being adjusted out.

And I think that's really the biggest driver on the margins from a year-over-year perspective because it had been previously completely adjusted out if you looked at all of 2017.

Kelly Bania -- BMO Capital Markets -- Analyst

OK. So, maybe can you just help us understand kind of the underlying margins with the core business, how do you feel about those? And then on the other side of that, where you think long-term, the Caito margins could stabilize at?

Mark Shamber -- Chief Financial Officer

Yes. So I mean, I think as it relates to the core margins, we feel relatively comfortable with where they are and where they continue to perform at. We have seen a little bit of pressure from some of the transportation costs that's kind of nicked us a little bit but not significantly enough as it relates to the core business there. On the Caito portion of the business, I think that their distribution segments, their operating margins would be in line with our core business over the [inaudible], so I don't think it's really a significant item there.

Right now, the manufacturing side of the business is dilutive to our margins and I would say that when it gets up and running at the levels we expect when it stabilizes that it would be accretive to the margins and leads to some expansion. So, we have got a pretty dramatic shift there as that business continues to improve and looks over to profitability that would sort of lead us to have some expansion both from increased sales volume as well as just improvements in the existing business over the course of time. Does that help the answer?

Kelly Bania -- BMO Capital Markets -- Analyst

Yes, that's very helpful. And then I guess just one more on the distribution segment if you adjust for the customer reorganization, which I think is cycled now. I mean, the growth is almost at 6% with about 1% inflation. So I mean are we still expecting kind of mid-single-digit growth for that division for the next couple of quarters? Is that reasonable to expect?

Dave Staples -- President and Chief Executive Officer

I would say, yes.

Kelly Bania -- BMO Capital Markets -- Analyst

Great. And then just one more I guess on inflation, did you give the retail inflation or the composition of that negative 2.2% ID, any traffic or ticket and any difference in the inflation that you are seeing distribution versus retail?

Mark Shamber -- Chief Financial Officer

Retail is a little bit lower. I mean, the distribution was 97 basis points in the first quarter, retail was 84. From the fourth quarter to our first quarter, I mean, that move on the retail up of about 7 basis points, so relatively flat from quarter-to-quarter but on a year-over-year basis, on the retail side, last year, we are about roughly 90 basis points, 88 basis points deflationary and this year, we are 84 basis points inflation. So, on the retail side, it's a swing of about 170 basis points.

Kelly Bania -- BMO Capital Markets -- Analyst

Got it. Maybe just had one more if I can. As you step back and think about your use of tax proceeds and some of the investments in wages and I think mostly into the retail business. How do you feel about those so far, I know it's still early and how will you be measuring the effectiveness of that over time?

Dave Staples -- President and Chief Executive Officer

So, Kelly, yes, our investments are targeted like you said, I think at this point a significant part of retail but also to distribution wages. They are mostly wage and price orientated. They really are just beginning probably within the last month or two. And so I think the way we will measure them are as intended with our associate satisfaction scores, which we monitor every year as well as our turnover ratios.

And so a big part of what we are doing is to make sure our associates are compensated very competitively and to ensure that we retain the best talent if it's a wage perspective. And then on the product side of it, our objective is to ensure that we are offering a competitive value to our customers, one part of that value being price and so we will measure that through our results in the categories that we adjust the pricing.

Kelly Bania -- BMO Capital Markets -- Analyst

Great, thank you.

Operator

The next question comes from Ryan Gilligan of Barclays. Please go ahead.

Ryan Gilligan -- Barclays -- Analyst

Hi, good morning. Thanks for taking the questions. Just clarifying on guidance, does it assume the competitive environment at retail improves at all and can you talk about quarter-to-date comp trends?

Mark Shamber -- Chief Financial Officer

It doesn't really reflect any sort of change from our perspective. I mean, we have been dealing with some of the competitive pressures for almost a year at this point. So I mean, I think we have been navigating through those waters relatively successfully as of late and we expect to continue to see the trends improve there, so it's not really anticipating any further change. And then sorry Ryan, the second part of the question was?

Ryan Gilligan -- Barclays -- Analyst

Just comp trends in the second quarter so far.

Mark Shamber -- Chief Financial Officer

They are a little bit up but I don't have the number right in front of me, so I apologize on that but I would say that they have improved from where we finished the first quarter.

Ryan Gilligan -- Barclays -- Analyst

Got it. OK. And then just on the Caito's sales pipeline, have you added new customers this year already and if so what's the run-rate of the sales that have been added?

Dave Staples -- President and Chief Executive Officer

Yes. I'd say we are really beginning to see some of that happen now. It's really I think predominantly beginning here in the early second quarter and so it's in the early phases but yes, I think we have had some nice beginnings with new customers. And I don't think it's incredibly substantial to date but we believe it's going to keep growing as the year progresses.

And I think we are pretty excited about where we are going to end up.

Ryan Gilligan -- Barclays -- Analyst

That's helpful. And is it mostly with new customers to SpartanNash or existing customers and just kind of growing the product line?

Dave Staples -- President and Chief Executive Officer

I guess, I would say at this point, it's predominantly with either SpartanNash customers or Caito customers and expanding the line. However, who we are producing the product for hasn't necessarily been a customer of ours before. So as I mentioned in the earlier part of our discussion today, food manufacturers are some of the people who are expressing an interest and we are actually in some cases being asked by a manufacturer to use their product as a component of an offering to an existing customer we may have. So in essence, I guess, we are producing our products, the end product for our manufacturer and we may use say their mainline product in that finished good.

Ryan Gilligan -- Barclays -- Analyst

That's interesting. Thanks. And then just clarifying on the military segment, do you expect sales to be up year-over-year in the second half though the incremental private label SKUs completely offset the comp decline at DeCA?

Mark Shamber -- Chief Financial Officer

Yes. I would say, yes. I would say maybe not necessarily at the same rate in the first quarter, but yes.

Ryan Gilligan -- Barclays -- Analyst

Got it. And then just lastly a bigger picture question on the military segment, so EBITDA margins have come down about 50 basis points since 2014, is there an opportunity to recover some or all that margin decline?

Dave Staples -- President and Chief Executive Officer

I mean, you have to look at some of the factors of our business, right. So our mix has changed over that period and so some fraction of that is mix. I believe, as we get more and more comfortable with this food processing and we continue to see where it could lead, that business, as Mark alluded to earlier, will carry a higher margin than our overall rates. And I think as we grow that business and as it becomes a bigger part of what we offer, I think that has the potential to claw that type of margin back.

Ryan Gilligan -- Barclays -- Analyst

Got it. Thank you.

Operator

[Operator instructions]. The next question comes from Chuck Cerankosky of Northcoast Research. Please go ahead.

Chuck Cerankosky -- Northcoast Research -- Analyst

Good morning. If we look out a bit not only this year but maybe in the next year, Dave and Mark, what are you thinking about opportunities for more forward buying? You seem confident about inflation returning if the CPGs move up pricing but at the same time, you got more private label and fresh products entering the mix. Do you think forward buying is something that helps food distribution margins going forward to the degree that it has in the past?

Dave Staples -- President and Chief Executive Officer

Yes. Chuck, as you say, forward buying has always been a part of what a distribution company does. I believe as we get back to a more inflationary environment, which we certainly hope happens as the year progresses, yes, I think it does become a bigger opportunity than it's been. I mean, in the years where we had deflation, it's difficult and in the years where you have very modest inflation, it's difficult.

And when your inflation is driven predominantly by fresh departments as we know, you are not going to buy in a whole lot of produce, right. So, that's not usually a good strategy. So yes, that center store, if we could get inflation igniting a little bit more across the center store, I think that certainly does become an opportunity.

Chuck Cerankosky -- Northcoast Research -- Analyst

Thank you.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Dave Staples, President and Chief Executive Officer for any closing remarks.

Dave Staples -- President and Chief Executive Officer

Yes. In conclusion, I just like to thank all of you for participating today and we look forward to speaking with you again next quarter.

Operator

[Operator signoff]

Duration: 49 minutes

Call Participants:

Rachel Perkins -- ICR

Dave Staples -- President and Chief Executive Officer

Mark Shamber -- Chief Financial Officer

Chris Mandeville -- Jefferies --Analyst

Paul Trussell -- Deutsche Bank -- Analyst

Mike Otway -- Wolfe Research -- Analyst

Kelly Bania -- BMO Capital Markets -- Analyst

Ryan Gilligan -- Barclays -- Analyst

Chuck Cerankosky -- Northcoast Research -- Analyst

More SPTN analysis

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