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Winn-Dixie Stores, Inc.’s net sales for the first quarter of fiscal 2011, a 12-week period ending on Sept. 22, 2010, were $1.5 billion, a drop of $36.6 million from the prior-year period. The company attributed the decline to a 2.8 percent decrease in identical-store sales, partially offset by sales from two new stores that opened during fiscal 2010.
According to Winn-Dixie, first-quarter identical-store sales were adversely affected by competitive activity and other general market factors, the continued mix shift from branded pharmaceutical to generic products, and the ongoing ramifications of the Gulf oil spill, although these factors were partially offset by the sales impact from inflation in some categories.
The identical-store sales trend improved from the fourth quarter of fiscal 2010, which the company said was because of a sequential betterment in transaction count and basket size that occurred as a result of strategic adjustments made to promotional activity in some categories and new sales initiatives.
“Our sales were in line with our expectations,” noted Winn-Dixie chairman, CEO and president Peter Lynch. “We are continuing to implement our initiatives to improve sales trends further, while ensuring a strategic and measured approach to our promotional activity.”
Added Lynch, “As we move through the year, we expect profitability to improve based on continued sequential improvements in identical-store sales, savings related to our headcount reductions, and exercising discipline with respect to our operating and administrative expenses.”
In fact, the company believes it’s “on track” to achieve $12 million to $17 million of annualized cost savings by these methods.
Winn-Dixie posted a net loss of $76.8 million, or $1.39 per diluted share, vs. a net loss of $8.1 million, or 15 cents per diluted share for the year-ago period. This includes a net loss of $40.1 million, or 73 percent per diluted share, related to the closure of 30 stores, compared with a net loss from discontinued operations of $2.4 million, or 5 cents per diluted share, in the first quarter of fiscal 2010.
For continuing operations, the company reported a net loss of $36.6 million, or 66 cents per diluted share, vs. $5.6 million, or 10 cents per diluted share, last year. This includes a deferred tax expense of $13.3 million, or 24 cents per diluted share, as a result of an increase in the Winn-Dixie’s valuation allowance on its deferred tax assets. Excluding the deferred tax expense, the net loss from continuing operations would have been $23.3 million, or 42 cents per diluted share.
In other company news for the first quarter of fiscal 2011, the grocer completed what it refers to as a “transformational remodel” store in Mobile, Ala., and reaffirmed an adjusted EBITDA guidance range of $100 million to $130 million for fiscal 2011
Jacksonville, Fla.-based Winn-Dixie operates 485 retail grocery locations, including 379 in-store pharmacies, in Florida, Alabama, Louisiana, Georgia and Mississippi.