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Thanks in large part to successful merchandising and marketing initiatives, Winn-Dixie Stores, Inc. yesterday defied the recession by posting net income of $9.4 million, or 17 cents per diluted share for the fourth quarter ended June 24, 2009, vs. a net loss of $5.5 million, or 10 cents per diluted share, year-ago period. Adjusted EBITDA in the fourth quarter of fiscal 2009 was $44.3 million, a rise of $34.7 million from the $9.6 million recorded last year.
Net sales in the fourth quarter of fiscal 2009 were $1.7 billion, an increase of $24.3 million over the prior-year period. Identical-store sales from continuing operations grew 1.6 percent vs. last year. Fourth-quarter identical store sales were affected positively by the timing of the Easter holiday. Additionally, identical-store sales in the fourth quarter of fiscal 2009 suffered because of a higher percentage of generic pharmaceutical products sold over their branded counterparts.
Gross profit in the fourth quarter of fiscal 2009 came to $500.4 million, or 29.2 percent of net sales, compared with $455.1 million, or 26.9 percent of net sales, in the year-ago period The increase in gross profit is mainly attributable to the benefit of product mix changes, reduced levels of promotional activity and a $3.3 million LIFO benefit, according to Winn-Dixie.
For fiscal 2009, net sales increased $85.5 million to $7.4 billion vs. the prior fiscal year, with identical-store sales from continuing operations up 1.2 percent vs. the prior fiscal year. Gross profit as a percentage of net sales was 28.5 percent, a rise of 130 basis points over last year.
Net income for the fiscal year 2009 was $39.8 million, or 73 cents per diluted share, compared with net income of $12.8 million, or 24 cents per diluted share, in the year-ago period. Adjusted EBITDA was $164.2 million, an increase of $62.4 million from the prior year, attributable mainly by higher sales and gross profit margin, and including $4.4 million from both positive sales impact caused by hurricanes Gustav and Ike and tropical storm Fay and federal assistance monies received by the affected communities.
The fiscal 2009 fourth quarter caps what Winn-Dixie chairman, CEO, and president Peter Lynch called “a very good year for Winn-Dixie.” “During fiscal 2009, we made significant progress in executing on the fundamentals,” he noted. “Our merchandising and marketing programs delivered strong results, enabling us to increase both sales and gross margin, despite the challenges posed by the economy. In addition, we managed our capital spending effectively while continuing to implement our store remodel program and make other improvements across the chain.”
The company said that it’s on track with the store remodeling program it kicked off in the second half of fiscal 2007, with plans to revamp about half of its locations by the end of fiscal 2010 and substantially all of its stores by the close of fiscal 2013. As of last month, Winn-Dixie had completed remodels and upgrades on all 51 Winn-Dixie stores in its hometown market of Jacksonville, Fla., which includes locations in north Florida and south Georgia. The grocer is also updating its training and development programs for associates as a way to enhance the customer experience in the Jacksonville market. At the end of fiscal 2009, the company had completed 170 store remodels, 73 of which were still in their first year of operation.
Winn-Dixie additionally reported that for the fourth quarter of fiscal 2009, its corporate brand penetration rate on the categories it measures rose to 21.8 percent. To date, the company has redesigned packaging and labels for over 2,500 private label products, with a goal of redesigning substantially all of the 3,000 or so corporate brand items it carries by the end of calendar year 2009.
The grocer expects its capital expenditures in fiscal 2010 to be about $220 million, with the grocer’s 75 planned store remodels accounting for about $130 million, and the rest for retail store improvements and maintenance, IT systems, new stores, logistics and backup generators.