Winn-Dixie Reports Lower Sales, Higher Earnings for Fourth Quarter

JACKSONVILLE, Fla. -- Increased competition and military deployments contributed to a decline in identical-store sales at Winn-Dixie Stores here, the company said yesterday, adding that it expects to turn up the promotions using its frequent shopper card in fiscal 2004.

Sales from continuing operations for the 12 weeks ended June 25 were $2.7 billion, a decrease of $130.0 million, or 4.5 percent, compared with the same quarter last year. For the 52 weeks also ended June 25, sales from continuing operations were $12.2 billion, a decrease of $166.0 million, or 1.3 percent, compared with the prior year.

Identical and comparable store sales decreased 4.5 percent for the quarter and 0.7 percent for the year. Easter occurred in the fourth quarter this year and the third quarter last year. Adjusted for the timing of Easter, identical and comparable sales for the fourth quarter would have decreased 5.5 percent. Identical-store sales include enlargements and exclude the sales from stores that opened or closed during the fiscal year. Comparable stores include replacement stores.

Net earnings during the fourth quarter were $62.5 million, or 44 cents per diluted share, compared with $52.8 million, or 37 cents per diluted share, for the same quarter last year. For the year, net earning from continuing operations were $239.2 million, or $1.70 per diluted share, compared with $187.2 million, or $1.33 per diluted share, for the previous year.

"During the fourth quarter we experienced an increase in competitive activity that negatively impacted our identical-store sales," Frank Lazaran, Winn-Dixie's president and c.e.o., said in a statement. "Many of our competitors lowered their earnings estimate over the past few months in order to significantly increase their promotional activity. In addition, military troop deployments and general economic conditions contributed to weaker sales in the fourth quarter. We have adjusted our earnings estimate for fiscal 2004 to reflect a more aggressive pricing and promotional stance going forward using our reward card to deliver those savings. We are also making improvements in our shrink and in-stock conditions."

During the past year Winn-Dixie opened 13 new stores and closed 13 smaller, older stores, resulting in a total of 1,073 locations.
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