Winn-Dixie 2Q sales, earnings down

JACKSONVILLE, Fla. Winn-Dixie Stores reported that net sales in the second quarter were $2.2 billion, a decrease of $74.5 million, or 3.3%, compared with the same period in the prior fiscal year.

Identical-store sales, which exclude stores that opened or closed during the quarter, decreased 2.9% for the second quarter compared with the same period in the prior fiscal year.

Net income in the second quarter of fiscal 2010 was $2.1 million, or 4 cents per diluted share, compared with net income of $16.1 million, or 30 cents per diluted share, in the second quarter of fiscal 2009. According to the company, the decrease in net income was due primarily to a non-recurring gain on an insurance settlement of $22.4 million ($13.8 million net of tax, or $0.25 per diluted share) in fiscal 2009.

Winn-Dixie chairman, CEO and president, Peter Lynch, said, “The challenging economic environment and deflationary pressures continue to impact sales for the entire supermarket industry. Despite negative identical store sales, we are pleased with our overall operating execution during the quarter. In particular, we maintained our gross margin rate through effective management of our promotional activity and reduced our operating expenses.”

Lynch continued, “It is clear that consumers remain very cautious with their spending, which has influenced our sales across the chain, primarily with respect to overall basket size. However, we increased transactions by 4.1% in our first-year offensive remodels compared with last year, and our customers are continuing to respond positively to the changes we are making. Given the prevailing economic conditions, we will continue to be prudent with our capital spending and will selectively remodel a total of 60 stores in fiscal 2010 in locations where we believe we can generate the highest return on our investment.”