Winn-Dixie posts consecutive quarterly same-store sales increases

Southeast grocer looks to expand its better-performing transformational remodel base by 17

JACKSONVILLE, Fla. — Winn-Dixie's transformational remodel initiative is setting the stage for a strong 2012, the company reported Tuesday morning during its first-quarter conference call.

Winn-Dixie Stores posted its second consecutive quarter of greater-than 3% improvements in same-store sales, heralding good results to come as the Southeast grocer continues 17 transformational remodels through the rest of the year, realizes greater utilization of its Fuelperks! rewards program in new Florida markets Tampa and Orlando and continues to improve in-stock performance with its computer-generated ordering system.

"We successfully grand-opened two more transformational remodeled stores that are generating promising financial results and building brand equity in their respective markets," Winn-Dixie chairman, president and CEO Peter Lynch said, bringing the number of remodeled stores in operation to five. The transformational remodels — which expands the selling space and incorporates upscale fresh departments inlcuding produce, deli, meat and seafood — generate between $400 and $500 in sales-per-sq.-ft., Lynch told analysts Tuesday morning — "substantially higher than our existing base of about $300 [in sales-per-sq.-ft.]." In the one transformational store that has cycled past its grand re-opening, sales increases are in the double digits, Lynch said.

Winn-Dixie plans to roll out some of the learnings gleaned from the transformational remodels across its store base under the direction of Larry Appel, SVP retail operations, Lynch added, especially across its fresh offerings.

Ultimately, Lynch is confident Winn-Dixie can institute its transformational format across 60% of its store base, or 290 stores.

Winn-Dixie posted net sales for the first quarter ended Sept. 21 of $1.6 billion, an increase of 3.1%, compared with the same period in the prior fiscal year. Identical-store sales increased 3.3%, compared with the same period in the prior year, which was driven in part by a 5.5% increase in basket size and partially offset by a 2.1% decrease in transaction count.

First quarter same-store sales were positively impacted by continued retail inflation, favorable results from the company's Fuelperks! rewards program and computer generated ordering initiative, and an increase in sales in remodeled stores, partially offset by competitive activities and general market factors, Winn-Dixie reported.

Winn-Dixie reported a net loss of $24.1 million, or 43 cents per diluted share, for the first quarter of fiscal 2012, an improvement from the net loss of $76.8 million, or $1.39 per diluted share, for the same period in the prior fiscal year.

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