It is still a long way from its glory days, but the signs are positive for Winn-Dixie after the company posted a profit in its first full quarter of operating without the safety net of Chapter 11 bankruptcy protection.
Winn-Dixie reported a same-store sales increase of 1.6 percent. Peter Lynch, the grocer's chairman, chief executive officer and president, said in a press release, "The improved results we achieved in the third quarter reflect early progress in our multi-year turnaround plan. We will continue to execute against our five key initiatives: rebuilding trust in our brand, investing capital in our stores, neighborhood marketing, associate training and development, and achieving profitable sales."
The chain reported an increase of 3.6 percent in the average basket when measured on an identical store basis. The average basket increases helped offset a decrease in actual transactions at company stores.
"The decline in transaction count is a trend we are addressing through our store remodel program as we invite customers back to see how Winn-Dixie is getting better. In our newly remodeled stores, our opportunity is to attract new customers who have been shopping elsewhere and to retain our current loyal customers. For those customers shopping in stores that have not yet been remodeled, we are taking steps to ensure that they experience better quality, selection and service throughout the store."
Mr. Lynch added, "We are encouraged by initial customer reaction to our first small group of remodeled stores, particularly the remodel that we recently completed in Macclenny, Florida, near our headquarters in Jacksonville. This store has served as a laboratory for some of our most innovative ideas for enhancing the customer shopping experience, including making improvements in the store's configuration, product mix and placement. We look forward to applying the lessons learned in Macclenny at our other locations."
While it is still early, The Florida Times-Union reported that Friedman, Billings, Ramsey analyst Karen Short said Winn-Dixie's performance served to "tilt the risk reward analysis considerably - making the stock much more attractive on both a short and long-term basis."
Discussion Questions: What do you take from Winn-Dixie's reported numbers? Do you see the chain making the types of changes that will be needed to make it a strong competitor for the near and longer term?