•  Q2 sales drop dents H1 revenue gains
  •  H1 profits down on weaker margins 

Midwestern grocer Roundy's saw sales drop in the second-quarter as the group decreased its investment in pricing and promotions.

The company booked a 1.7% drop in second-quarter sales, which slid to US$980.3m. Gross profit in the period dropped 0.9% as the company's margin was boosted by lower spending on promotional activity. However, this saving were partially offset by increased shrinkage, the company said.

The second-quarter decline dampened year-to-date sales figures. In the first half, net sales were up 1.5% to $1.96bn.

However, weaker margins meant first-half profitability was down year-on-year. Adjusted net income was $22.1m, compared to $29.5m in the prior year, while adjusted EBITDA totalled $95.1m, down from $109m last year.

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Roundy’s, Inc. Reports Second Quarter 2013 Financial Results

MILWAUKEE--(BUSINESS WIRE)--Roundy’s, Inc. (“Roundy’s”) (NYSE: RNDY), a leading grocer in the Midwest, today reported financial results for the second quarter ended June 29, 2013.

Q2 2013

  • Net sales decreased 1.7% to $980.3 million
  • Net income was $13.5 million, or $0.30 diluted net earnings per common share, compared to $18.9 million, or $0.42 diluted net earnings per common share in the prior year quarter
  • Adjusted EBITDA* was $51.2 million compared to $60.3 million in the same quarter last year
  • Mariano’s added two new stores during the quarter and average weekly net sales per store for all Mariano’s stores for the quarter were slightly over $1 million

Year-to-Date 2013

  • Net sales increased 1.5% to $1,963.8 million
  • Adjusted net income* was $22.1 million, or $0.49 adjusted diluted net earnings per common share*, compared to $29.5 million, or $0.71 adjusted diluted net earnings per common share* in the prior year
  • Adjusted EBITDA* was $95.1 million compared to $109.0 million last year
  • Mariano’s added three new stores and average weekly net sales per store for all Mariano’s stores were slightly over $1 million year-to-date

“During the second quarter, same-store sales results in our core markets did not meet our performance goals. Although the calendar shifts of the Easter and July 4thholidays contributed to the overall weakness in the quarter, our results were primarily affected by the challenging competitive environment, unfavorable spring weather conditions compared to the prior year and a continued soft economic climate in our core markets. The result was a continued price-conscious and cautious consumer,” said Robert Mariano, chairman, president and chief executive officer of Roundy’s.

Mr. Mariano concluded, “Despite the weaker than anticipated performance of our core stores, our Mariano’s banner continues to show strong sales and profitability trends. We continue to expand our store footprint, with eleven Mariano’s stores in the Chicago area and two more locations scheduled to open before year-end. We will continue to invest in the Mariano’s banner and we anticipate five additional store openings in the Chicago area in 2014.”

Original source: Roundy's Inc