Winn-Dixie slides on weak 4Q

JACKSONVILLE — Shares of Winn-Dixie slid nearly 20 percent Friday, a day after the supermarket chain reported disappointing preliminary fourth quarter earnings.

The company said late Thursday that it expects to report a net loss of approximately $5 million, or 9 cents a share, for the quarter including an adjustment to its self-insurance reserves. Actual results will be reported Aug. 25.

Excluding the special items, Winn-Dixie said it expects to report a net loss of approximately $12 million, or 23 cents a share for the quarter.

Identical-store sales grew 0.6 percent for the quarter, benefiting from rising food prices.

"I am not pleased with our fourth-quarter performance and I know we can do better. Even in a tough economy, this level of profitability is not indicative of what Winn-Dixie can deliver," the company's President and CEO Peter Lynch said Friday on a conference call with investors.

Lynch said the company has moderated its promotional spending and its top priority is restoring an appropriate balance between sales and margin. It is also pushing its store remodels and corporate brands to boost sales.

For the full year, Winn-Dixie expects to report net income of $13 million, or 25 cents per share. Winn-Dixie expects adjusted earnings before interest, taxes, depreciation and amortization for the year of about $101 million, a 57 percent increase over the prior year.

Friedman, Billings, Ramsey analyst Karen Short on Friday lowered her price target for Winn-Dixie from $20 to $16.50. She said the company had stronger-than-expected liquidity, with an ending cash balance of $201 million for the 2008 fiscal year.

But Short said the company's promotional spending backfired and "ultimately the company needs to demonstrate it can drive sales and EBITDA"

Back To Top