Winn-Dixie Sees Higher Q4 ID Sales

Winn-Dixie Stores Inc. reported net sales of $1.6 billion, a decrease of $63.6 million or 3.8 percent, compared with last year for fourth quarter ended June 29. The Jacksonville, Fla.-based grocer attributed the decrease to an extra week in the year-ago period. Identical-store sales on a comparable 12-week basis grew 3.2 percent versus last year, and basket size for identical stores on a comparable 12-week basis rose 3.9 percent, while transaction count dipped 0.7 percent from the year-ago period.

According to Winn-Dixie, the quarter’s identical-store sales were affected by inflationary increases that were passed through in some categories, an increase in sales in remodeled stores, and favorable results from the grocer’s computer-generated ordering and fuelperks! initiatives, partially offset by competitive activities and general market factors.

“We were able to improve our financial performance in the second half of the year due to the talent and hard work of all of our team members,” said Peter Lynch, chairman, CEO and president of Winn-Dixie, which operates 483 grocery stores in Florida, Alabama, Louisiana, Georgia, and Mississippi.“We enter fiscal 2012 as a stronger company and look forward to building on the momentum we have established this year as we continue to grow sales through initiatives and customer loyalty programs such as our fuelperks! rewards program and transformational remodels. Through the first two fiscal periods of the new year, this momentum has resulted in identical-store sales growth in excess of 3 percent.”

Winn-Dixie posted net income of $7.3 million, or 13 cents per diluted share, for the fourth quarter, compared with $14.0 million, or 25 cents per diluted share, last year. Net income from continuing operations was $5.6 million, or 10 cents per diluted share, versus $16.0 million, or 29 cents per diluted share, for the year-ago period. Gross profit on sales for the fourth quarter was $447.6 million, a drop of $42.9 million from the year-ago period, which included an extra week.

Net sales for fiscal 2011 were $6.9 billion, a decrease of $99.3 million or 1.4 percent from fiscal 2010. According to Winn-Dixie, this decrease was because of the extra week in the year-ago period and a slight dip in identical-store sales. Identical-store sales on a comparable 52-week basis edged down 0.1 percent from the year-ago period, and basket size for identical stores on a comparable 52-week basis rose 1.3 percent, while transaction count fell 1.5 percent compared with last year.

Fiscal 2011 identical-store sales were adversely affected by general market factors and competitive activity, somewhat offset by inflationary price increases that were passed through in some categories, an increase in sales in remodeled stores, and favorable results from the grocer’s computer-generated ordering and fuelperks! programs.

Gross profit on sales was $1.9 billion, a drop of $73.7 million from fiscal 2010, and as a percentage of net sales, gross margin for the fiscal year came to 27.9 percent, vs. 28.5 percent for fiscal 2010. The company partly attributed this decline to pricing and promotional activity.

Winn-Dixie expects that identical-store sales for fiscal 2012 will increase 2.5 percent to 3.5 percent and that gross margin rate will be slightly higher than in fiscal 2011. The grocer anticipates that operating and administrative expenses will be somewhat higher than in fiscal 2011, based on the expectation of increases in payroll and payroll-related expenses and higher depreciation costs because of capital investments in 2012. The company further expects to pay no income taxes in fiscal 2012 because of the sufficiency of its tax loss carryforwards.

Capital expenditures for fiscal 2012 are expected to be about $200 million, of which around $125 million will be used for Winn-Dixie’s store remodeling program and new store development. The rest is expected to go toward store improvements and maintenance, IT systems, warehousing and transportation. Because of ongoing strong sales  in its “transformational” format stores, the grocer expects to complete 17 such remodels in fiscal 2012, and to begin readying remodels and new store development slated for fiscal 2013.