US supermarket group Winn-Dixie has booked a drop in full-year profits as a result of the “difficult” economic and competitive environment.

For the 53-week period to the end of June, the company earned US$28.9m, compared to $39.8m last year.

The drop, the firm said yesterday (30 August), is the result of a prior year gain on an insurance settlement of $22.4m that did not recur in fiscal 2010.

Net sales for the period slid to $7.2bn, a 1.6% drop on the 2009 fiscal year.

Identical store sales from continuing operations, which exclude stores that opened or closed during the year, decreased by 2.9% as a result of a decline in transaction count and basket size of 2.3% and 0.6%, respectively.

Adjusted EBITDA dropped to $144.6m from $164.2m lat year.

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Peter Lynch, chairman, CEO, and president, said: “We were able to meet our financial guidance for the fiscal year through effective management of our promotional activity and by continuing to exercise discipline with respect to our overall expenses. However, the economic and competitive environment remained very difficult in the fourth quarter, and our decision to maintain gross margin rate negatively impacted our identical store sales significantly.”

The company said it expects adjusted EBITDA for fiscal 2011 to be in the range of $100 to $130m.

Click here to view the full earnings release.