Retailer Winn-Dixie Stores has reported financial results for its first quarter ended 21 September 2005, showing an increased loss, but the company said its sales trend has improved.
The filing with the Securities and Exchange Commission shows net sales for the quarter at US$1.675bn, compared to US$1.736bn in the same period a year ago. The net loss increased to US$554m, from US$153m a year ago.
Identical store sales for continuing operations stores, which include store enlargements and exclude the sales from stores that opened or closed during the period, decreased 2.9% for the first quarter of 2006 compared to the same period in the prior year, and increased 2.9% for the first eight weeks of the 2006 second quarter compared to the same period during fiscal 2005. This represents an improvement from the 4.5% decline in identical store sales in the third and fourth quarters of fiscal 2005 the company said.
During the first quarter, the company implemented a major strategic restructuring program to focus the company’s resources on its strongest markets and streamline its distribution and manufacturing operations. Under this plan, the company has exited 326 stores, along with three distribution centres and seven manufacturing facilities. With these actions now completed, the company believes that it now has in place the right store footprint and infrastructure to move forward in achieving its turnaround plan.
“We are very pleased with the progress we are making,” said Peter Lynch, Winn-Dixie president and CEO. “Although it may not be immediately obvious from our financial reports, we have generally met or exceeded our internal performance objectives so far in fiscal 2006. Clearly, the operational improvements we have been implementing are beginning to pay off, thanks to the dedication and loyalty of our associates and the continued support of our customers and suppliers. To be sure, there is still a lot of hard work and challenges ahead for our company, but we believe we are making steady improvement and building momentum.”
“In addition to the recent improvement in our identical store sales, we are seeing increased anecdotal evidence that our turnaround efforts are succeeding,” he said. “We are receiving more and more letters, emails and phone calls from customers who are noticing that we are getting better all the time. They see an improved attitude and energy level among our associates and better and fresher merchandise on our shelves.”
“We look forward to working with the creditors and equity committees, as well as our lenders and other interested parties, to begin mapping out a plan of reorganization,” he said. “Our objective is for Winn-Dixie to emerge from the Chapter 11 process by June 2006.”