Knobias Clip Report (10-28-2008) WINN
Submitted By Knobias ClipReport
WINN: Shares Up on Q1 Results; CEO Comments and Discusses Strategic Initiatives
Tuesday , October 28, 2008 11:07ET
By Fain Hughes, fhughes@knobias.com
Shares of Winn-Dixie Stores, Inc. (WINN) were higher in Tuesday’s session after the Company reported its financial results for the first quarter of fiscal 2009 ended September 17, 2008.
Net sales in the first quarter were $1.7 billion, an increase of $55.0 million, or 3.4%, compared to the prior year period. 110 basis points of the improvement in identical store sales were due to increased sales as a result of Hurricanes Gustav and Ike and Tropical Storm Fay. The Company benefited from pre-storm purchases and also its ability to reopen stores before competitors.
The Company also reported a net loss of $2.3 million, or $0.04 per diluted share for the quarter, compared to a net loss of $0.8 million, or $0.01 per diluted share, in the first quarter of fiscal 2008. Adjusted EBITDA was $27.0 million, an increase of $7.5 million from Adjusted EBITDA of $19.5 million in the first quarter of fiscal 2008.
The Company is maintaining its previously issued guidance that full fiscal year 2009 Adjusted EBITDA will be within a range of $110-$125 million.
Peter Lynch, Chairman, CEO, and President Winn-Dixie, commented in a conference call today, “This was an excellent quarter for us, and we are on track to mee the guidance that we have provided for the full year. Our 38% improvement in Q1 Adjusted EBITDA was driven by higher sales and higher gross margin rates. Identical store sales increased by 3% over last year. This was driven by an increase in basket size of 5.7% and offset by a decline in transaction count of 2.5%.”
He continued, “Our gross margins of 27.9% was an increase of 40 basis points from Q1 of 2008. This was primarily attributable to a shift in the mix of products sold in Q1 which was largely due to higher percentages of private label products sold. Gross margins were also positively impacted by reductions in inventory shrink.”
Mr. Lynch added, “We have continued to make substantial progress with our strategic initiatives that include store remodeling and our corporate brands program. Our store remodeling program is a multi-year initiative designed to rebuild our brand and provide our customers with shopping experence that is fresh and local. Our plan is to remodel half of our stores by the end of fiscal 2010 and all of our stores by fiscal 2013. In 59 of our targeted remodeled stores in Q1, we saw an 11.6% sales increase over the previous year.
“Our customers are also migrating more and more to private brands. In Q1, we improved our penetration to 22%, which is an improvement of 150 basis points from the prior year. We are on track with our plan to have all of our private label products, about 3,000 items, with redesigned packaging by the end of calendar 2009.”
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