Winn-Dixie Nets Profit

Grocer Winn-Dixie Inc., which came out of Chapter 11 bankruptcy last November, reported a profit and 2% increase in sales for its FQ4 ending June 27th. Net income was $20.6 million ($0.38/share) compared a loss of $17.2 million (-$0.12/share) a year ago. Revenue increased 2% to $1.68 billion from $1.65 billion a year ago -- in line with an analyst estimate. Same-store sales grew 1.3% and gross margin was up from 25.1% last year to 27.9%. The company was able to cut costs in warehousing and transportation, boosting vendor allowances, and consolidated a Miami facility. Operating and administrative expenses fell 8% to $439.4 million. On the year, Winn-Dixie reported a profit of $300 million from a loss of $361.3 million, a revenue increase of 1%, and same-store sales increase 1.6% from the year before. Winn-Dixie CEO Peter Lynch stressed the company's "five key initiatives: rebuilding trust in our brand, investing capital in our stores, merchandising for the neighborhood, training and developing our Associates, and achieving profitable sales." The company announced some results from its store remodeling program as well. So far, 20 stores have been remodeled; net of grand opening activities, sales were up 12%. "The store remodeling program is one of our most important initiatives," Lynch added. "We are pleased with our initial results and we will continue to monitor our progress." The company usually does not provide any guidance, however due to its recent emergence from bankruptcy, it said it expects same-store sales to remain slightly positive over the next year. As a result of expenses from its store remodeling, turnaround plan, non-cash stock compensation, and other charges, the company expects a net loss for the next year. Shares fell 21.5% Tuesday to close at $22.17.

Sources: Press Release, Forbes, MarketWatch, TheStreet.com
Commentary: Leucadia's Ian M. Cumming: Buys, Sells, Portfolio • The Best and Worst Performing Stocks, YTD
Stocks/ETFs to watch: WINN. Competitors: WMT, KR, SWY. ETFs: VDC

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