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NEW YORK - Winn-Dixie Stores, Inc. posted a lower quarterly profit yesterday on mediocre sales, and the Jacksonville, Fla.-based grocery chain announced it will streamline its operations by closing 156 stores, a strategy which will affect 10 percent of its work force, according to Reuters.
Winn-Dixie forecast pretax restructuring charges and losses on discontinued operations of $275 million to $400 million in the next 12 months. The company said its third-quarter net earnings were $610,000, or zero per share, including special items, compared with a net profit of $50.6 million, or 36 cents, the previous year.
Sales decreased 5.5 percent to $2.67 billion. Sales at stores open at least a year, a crucial measure of retail strength, fell 6.4 percent for the quarter.
Winn-Dixie said it will trim its operations in an effort to cut costs. The company said it will shut 45 unprofitable locations in its core markets, while exiting 111 stores in its noncore markets, as well as three distribution centers.
Winn-Dixie further said it will sell its Dixie Packers, Crackin' Good Bakery/Snacks, and Montgomery Pizza manufacturing operations. According to the company, the move will affect 10,000 positions, or 10 percent of its work force, within the next 12 months. Winn-Dixie said it will try to lessen the effect on its employees by attempting to sell the operations that it will exit and offering jobs at the company's other units.
The company said it expects annual pretax savings of $60 million to $80 million, because of the restructuring. In January the grocery chain suspended its dividend indefinitely, to slash $100 million in costs by July 1.