US supermarket group Winn-Dixie has posted an 87% decline in second-quarter profits, after a big gain in the second quarter of last year skewed comparisons.
For the quarter to 6 January, Winn-Dixie posted profit of US$2.1m, or $0.04 a share, down from $16.1m, or $0.30 a share, last year when the group booked a $0.25 gain on an insurance settlement.
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Nevertheless, the supermarket group admitted that sales have come under pressure as US consumers have reigned in spending in the face of the challenging economic environment.
The company said that the weak economy had also reduced the impact of its cost-cutting and remodelling drives. Gross margin edged up to 28.2%, from 28.1% last year.
Net sales fell 3.3% to $2.18bn during the period and same-store sales dropped 2.9%. However, in recently remodelled stores sales increased 4.9%, the company said.
“Given the prevailing economic conditions, we will continue to be prudent with our capital spending and will selectively remodel a total of 60 stores in fiscal 2010 in locations where we believe we can generate the highest return on our investment,” said chairman and CEO Peter Lynch.
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By GlobalDataThe US grocery chain affirmed its full-year earnings target of $140m to $160m.
