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    Q3 Sales, Income Down at Roundy’s

    Stagnant economy blamed for tepid performance

    Milwaukee-based Roundy’s Inc. reported its third quarter 2012 net sales decreased 0.3 percent to about $974 million, while adjusted net income dipped 21 cents per share.

    “Our results continued to be negatively affected by the general weakness in the overall economy and increased competitive environment,” said Robert Mariano, Roundy’s chairman, president and CEO. “We have worked very hard to strengthen our leading market position as a provider of quality, value and convenience to consumers, but the impact of increased price investments and promotional activities on our gross margins and profitability was greater than we anticipated.”

    Mariano said Roundy’s customers did not respond “as enthusiastically as we had expected” to the grocer’s Monopoly promotion program, which contributed to its strong Q3 results last year.

    “As we look ahead, we are carefully examining our entire operation for ways in which we might improve sales and earnings and, accordingly, have already made adjustments to our pricing and promotions to drive our performance,” he said. “Despite the headwinds in certain of our core markets, we continue to be pleased with the performance of our Chicago-area stores.”

    Roundy’s now has eight Mariano’s Fresh Markets open in the Chicago area. “We are gaining significant traction, and continue to invest in the growth of that market,” Mariano said. “We believe that our continued focus on enhancing the execution of our overall business model will position us to deliver greater overall sales growth and profitability.”

    Q3 net sales were $973.6 million, a decrease of $3.3 million from $976.9 million for last year’s third quarter. Roundy’s said the decrease primarily reflects a 3.6 percent decrease in same-store sales, partially offset by the impact of new stores. The company blames the decline in same-store sales on a 3 percent decrease in customer transactions and a 0.7 percent dip in average transaction size, due to competitive store openings and related pricing and promotional activity.

    Q3 adjusted net income, which excludes the impact of one-time employee expenses, was $8.8 million, or 20 cents per common share, compared to $12.4 million, or 41 cents a share in the year-ago period.

    Roundy’s paid a Q3 dividend of 23 cents per share on all outstanding shares. Due to “the continued challenging economic and competitive environment,” the company opted to reduce its dividend to 12 cents per outstanding share.
    YTD net sales were $2.9 billion for the 39 weeks ending Sept. 29, an increase of 1.2 over the year-ago period.

    Founded in Milwaukee in 1872, Roundy’s operates 161 retail grocery stores and 98 pharmacies under the Pick ’n Save, Rainbow, Copps, Metro Market and Mariano’s retail banners in Wisconsin, Minnesota and Illinois.

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