US: Roundy's optimistic after mixed 2013
new store openings have had a positive impact on Roundy's 2013 results
US regional retailer Roundy's has insisted its investment in its core business is showing signs of paying off despite a mixed financial performance in 2013.
For the year to 29 December, Roundy's net sales and net income rise - but same-store sales, adjusted net income and adjusted EBITDA fall.
The adjusted numbers did not include the impact of one-off items, including a US$106.4m goodwill impairment charge Roundy's booked in 2012, which hit that year's numbers.
In the fourth quarter of 2013, there was a similar pattern in the results. Net sales and net income were higher, although same-store sales and adjusted EBITDA fell. However, Roundy's fourth-quarter adjusted net income was up.
Roundy's pointed to improving sales trends in the fourth quarter against the rest of the year. Same-store sales fell 2.4% in the quarter, compared to a 2.7% drop over 2013.
"We continued to experience an improvement in our sales cadence across our core markets which helped us begin to generate a slight increase in a number of key metrics versus the prior year," chairman, president and CEO Robert Mariano said. "While we still have important challenges to overcome in our core markets, we believe the investments we made in 2013 and continue to make in 2014 are beginning to resonate with our customers."
Roundy's has what it calls a "growth" banner, Mariano's, which, the CEO said "experienced another strong performance in the fourth quarter".
For the full year, net income grew to US$34.5m, compared with a loss of US$69.2m in 2012.
Adjusted net income was $36.7m, or $0.81 adjusted diluted net earnings per common share, compared to $47.0m. Adjusted EBITDA was $172.2m compared to $198.7m
Roundy's forecast same-store sales to fall again in 2014 but a less steep rate than 2013. It estimates same-store sales will drop 1-2%. The retailer also forecast adjusted EBITDA of $162-172m.
Roundy's issues its results after the market closed in New York yesterday. In after-hours trading, shares in Roundy's fell 4.59% to $6.44.
BB&T Capital Markets analyst Andrew Wolf said competition "remains elevated but appears to be gradually easing". He highlighted the "sequential" improvement in sales.
However, Wolf lowered his earnings forecasts. "For 53-week 2014, we have lowered our forecasts for core EPS to $0.35 from $0.80 and for adjusted EBITDA to $163.9m from $178.2m on an improved sales outlook but lower profitability."
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