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JACKSONVILLE, Fla. -- Winn-Dixie Stores, Inc. yesterday reported what it called "a significant year-over-year improvement in financial results" for the second quarter of fiscal 2008, including adjusted EBITDA of $21.6 million, an increase of $21.1 million over the year ago period.
Winn-Dixie said net income was $4.1 million for the latest quarter, compared to net income of $286.8 million in the same period of fiscal 2007. However, net income in the year-ago quarter was bloated "non-cash items, primarily reorganization gains of $338.4 million," the chain explained.
Gross margin was 26.7 percent, an increase of approximately 100 basis points compared to the year ago period, and identical store sales edged up 0.5 percent in the 16-week period that ended on January 9, 2008.
Net sales in the second quarter were $2.2 billion, an increase of 0.7 percent compared to the second quarter of fiscal 2007.
Following its stronger-than expected second quarter results, Winn-Dixie said it now anticipates full-year adjusted EBITDA in the range of $105 million to $125 million for fiscal 2008.
"Winn-Dixie had a truly outstanding quarter," said chairman, c.e.o., and president Peter Lynch in a statement. "We improved our profitability by effectively managing our promotional spending, while simultaneously growing our identical store sales. We are executing according to plan."
Lynch continued, "We now have reported four full consecutive quarters of post-Chapter 11 results, and I'm extremely proud of what the team has been able to accomplish. We consistently have achieved year-over-year improvements in sales, margins, and operating cash flow. In addition, we are making progress with our strategic initiatives and improving our brand image.
"We are still in the early stages of our multi-year turnaround plan and have a great deal to accomplish, but I am confident our strategic initiatives are gaining traction and remain very optimistic about the opportunities that lie ahead," Lynch said.
Net sales for the 28 weeks ended Jan. 9 were $3.9 billion, an increase of 0.7 percent compared to the same period in the prior fiscal year. Identical store sales from continuing operations increased 0.4 percent, compared to the same period in the prior fiscal year.
Net income for the 28 weeks was $3.3 million, or $0.06 per diluted share. Gross profit as a percentage of net sales was 27.0 percent, an increase of 100 basis points compared to the same period in the prior fiscal year.
Lynch also said the chain's store remodeling program, which commenced in the second half of fiscal 2007, is on track and continues to generate positive results. The goal of the program is to modernize Winn-Dixie stores by dramatically improving their appearance, heightening their focus on fresh, high-quality products, and enhancing the overall shopping experience for customers in each neighborhood it serves.
Since the inception of the program, the company has completed 47 store remodels, nine of which are still in the grand re-opening phase, which is typically a four-week period of heavy promotional activity. Of the remaining 38 stores, Winn-Dixie said it considered 24 of them to be offensive remodels; and it expects approximately 80 percent of the remodels planned for fiscal 2008 to be offensive remodels.
As of the end of the second quarter of fiscal 2008, Winn-Dixie said the 24 offensive remodels had experienced a 12 percent weighted average sales lift after the grand re-opening phase. The sales lift in the offensive remodels resulted from increases in transaction count and basket size of 5.2 percent and 6.8 percent, respectively, it said.