Winn-Dixie Stores Inc. became a much smaller supermarket chain when it went through Chapter 11 bankruptcy reorganization in 2005 and 2006.
Even though the Jacksonville-based company has been spending money to remodel its remaining stores, the chain continued to shrink a bit after it emerged from bankruptcy.
That’s about to change, CEO Peter Lynch told reporters Monday.
“We’ve turned the page. It’s a new chapter,” he said. “We’re about to start growth for this company.”
The growth plans are modest, with five new stores scheduled to open in the fiscal year that begins at the end of June next year.
Lynch said the company is encouraged by the early results of its “transformational” stores, which feature a more attractive décor and higher-end perishable items. He’s hoping the new store model will translate into more sales and earnings for Winn-Dixie.
“We are extremely excited about this. We’ve got a prototype that’s a home run,” he said.
Lynch talked about the growth plans as Winn-Dixie announced a net loss from continuing operations of $24.6 million, or 44 cents per diluted share, for the first quarter ended Sept. 21, compared with a loss of $36.5 million, or 66 cents a share, the previous year.
Lynch said there were several positive trends in the results.
Net sales rose 3.1 percent to $1.59 billion and identical store sales rose 3.3 percent in the quarter.
“This is now two consecutive quarters where we’ve been positive” in identical store sales growth, Lynch said, and he added that the trend has continued so far in the current quarter.
Winn-Dixie reported earnings before interest, taxes, depreciation and amortization, or EBITDA, of $7.4 million in the quarter, reversing an EBITDA loss of $6.8 million in the first quarter last year.
Winn-Dixie considers EBITDA to be an important indicator of its financial results because it measures earnings excluding non-cash charges.
“Investors look at businesses today on a cash basis, which is EBITDA,” Chief Financial Officer Bennett Nussbaum said.
Winn-Dixie Monday reaffirmed its guidance that EBITDA for the full fiscal year that ends in June will be between $120 million and $135 million.
Winn-Dixie’s sales boost has come in part from its new transformational stores. The company opened two in the last quarter, including its first in the Jacksonville market on County Road 210 in St. Johns County, and has five overall.
The company plans to remodel 15 more stores with that prototype in this fiscal year.
“They’ve been extremely successful and our guests like them an awful lot,” Lynch said.
The five new stores will also be built next year with the transformational prototype. The company is not yet announcing where those stores will be, but Lynch said they will be in existing markets.
Winn-Dixie currently operates 483 supermarkets in Florida, Georgia, Alabama, Louisiana and Mississippi.
Winn-Dixie had 920 stores when it went into bankruptcy in 2005 and closed about 400 stores as it went through the Chapter 11 reorganization.
Since emerging from bankruptcy, the company has closed more stores, including 30 that were shut down a year ago.
Lynch said there may still be a store closing here and there, which happens in any retail chain, but he doesn’t expect any more large-scale closings.
He is confident about Winn-Dixie’s current position.
“In these times of uncertainty, we feel very good about our earnings strength this year,” he said.
“We feel very, very optimistic about our future.”
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