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Winn-Dixie Stores, Inc. reported a net loss of $2.3 million for its first quarter of 2009, compared to a net loss of $0.8 million in the year ago period, but identical store sales for the quarter were up a healthy 3 percent, prompting the chain's top exec to sound a positive note.
"We are very pleased with our financial results for the quarter," said Peter Lynch, Winn-Dixie's chairman, c.e.o., and president. "We improved Adjusted EBITDA while also delivering solid sales growth. We also benefited from increased sales both before and after the storms that affected many of our communities in Louisiana, Florida, Georgia, and along the Gulf Coast. Our associates put forth a great team effort that enabled us to re-open stores quickly to better serve our customers."
Lynch acknowledged that the chain is being challenged by current economic conditions. Still, he said, "Over the longer-term, we are pursuing sustainable sales growth and building customer loyalty through initiatives such as our store remodel and corporate brands programs and our neighborhood merchandising and marketing strategy."
Sales in the first quarter ended Sept. 17 were $1.7 billion, an increase of $55.0 million, or 3.4 percent, compared to the prior year period. Identical store sales increased 3 percent.
Adjusted EBITDA was $27 million, a 38.5 percent increase from the year-ago period. The company said first quarter adjusted EBITDA included an estimated benefit of approximately $2.7 million, due to positive sales impacts of Hurricanes Gustav and Ike, and Tropical Storm Fay, which exceeded store-related inventory losses and other costs.
The grocer's gross margin was 27.9 percent, an increase of approximately 40 basis points from first quarter fiscal 2008. Winn-Dixie attributed the improvements primarily to product mix changes (60 basis points) and operational improvements that reduced inventory shrink (30 basis points). It added the improvements were offset partially by an increase in the company's LIFO charge and other items.
The Jacksonville, Fla.-based grocer said it is on track to remodel 75 stores in fiscal 2009. First-year store remodels showed more than a 10 percent identical store sales lift. Winn-Dixie intends to remodel roughly half its stores by the end of fiscal 2010, and substantially all of its stores by the end of fiscal 2013.
Winn-Dixie's corporate brand penetration rate improved to 22 percent, an increase of 150 basis points compared to the same period in the prior fiscal year, it said. To date, the company said it has completed packaging and label redesigns for over 1,900 private label products.
As of September 17, 2008, Winn-Dixie had approximately $653.1 million of liquidity, comprised of $491.2 million of borrowing availability under its credit agreement and $161.9 million of cash and cash equivalents. The company is maintaining its previously issued guidance that full fiscal year 2009 Adjusted EBITDA will be within a range of $110-$125 million.