US food retailer Roundy’s Inc has cut its full-year profits guidance after seeing weak consumer confidence lead to worse-than-expected sales in its fiscal first-half.
For the 26 weeks to the end of June, Roundy’s net sales rose by 2% versus the 26 weeks to 2 July 2011, reaching US$1.9bn. The US Midwest-based grocery group reported a 25% jump in net profits over the half-year period, to $26.5m.
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However, the increases proved slower than the firm anticipated. It said today (10 August) that it now expects same-store sales for the full-year to fall by between 2% and 3%, versus a previous prediction of a 0.5% to 1.5% drop.
The group also cut its guidance for fully diluted earnings per share, which are now set to be between $0.91 and $1.05. After the first quarter, Roundy’s predicted a range of $1.11 to $1.22.
“Our second quarter results reflect the ongoing effects of a challenging economic environment on our business and our consumers,” said Robert Mariano, Roundy’s chairman, president and CEO. “Our top line results were constrained by an increasingly price-conscious consumer and greater than anticipated pricing and promotional activity in several of our major markets.”
Second-quarter net sales rose by 1.7% to $996.8m, with new store sales offsetting a 3.3% drop in like-for-like store sales. Still, net profits for the quarter rose by almost 7%, to $18.9m.
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By GlobalDataDespite the disappointing second quarter, Mariano said the group is pleased with progress at its Chicago stores. The firm said new stores should enable net sales to rise by between 1% and 2% over the full-year, even though same-store sales are likely to fall.
