US retailer Winn-Dixie has posted a 57% leap in full-year EBITDA, which rose to US$101m, despite a disappointing fourth quarter.
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Same-store sales for the fiscal year increased by 0.9%, the company said. Sales gains were driven by food inflation, which was partially offset by competitive factors that resulted in a drop in volumes.
However, the company’s fourth quarter saw a dramatic decline in earnings, with EBITDA dropping by US$20.1m to US$9m.
Winn-Dixie said that fourth-quarter earnings and margins were hit by the aggressive investments made on price during the period.
“As consumers modified their spending behaviour in response to higher oil and food prices, we invested in more promotional programs in order to attract and retain customers,” CEO Peter Lynch explained.
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By GlobalData“Although we grew sales during the fourth quarter, our promotional activity had a negative impact on both gross margin and adjusted EBITDA, causing us to fall below our earnings guidance range for the year,” he concluded.
For the full year, gross margins totalled 27.2%, an increase of 30 basis points compared to the prior year.
Net income for fiscal 2008 came in at $13m, or $0.25 per share.
“Overall, Winn-Dixie had a strong year, with year-over-year increases in sales, gross margin and adjusted EBITDA, and we made significant progress with the company’s strategic initiatives, which gives us a stronger foundation and added confidence as we head in to fiscal 2009,” Lynch added.
