Winn-Dixie raises guidance for fiscal 2009, announces remodeling program of stores

JACKSONVILLE, Fla. Winn-Dixie Stores has raised its previously issued adjusted EBITDA guidance for fiscal 2009.

The company now expects adjusted EBITDA for fiscal 2009 to be approximately $164 million, exceeding the high-end of its previous guidance of $152 million, due primarily to a higher gross profit margin achieved in the fourth quarter and a reduction in its estimated annual LIFO charge to $15 million from its previous estimate of $19 million.

Winn-Dixie expects to report net sales for fiscal 2009 of approximately $7.4 billion, an increase of approximately $86 million, compared with the prior fiscal year, with identical stores sales from continuing operations up 1.2%, compared with the prior fiscal year. Gross margin is expected to be approximately 28.5%.

In addition, the company’s actual results for the fiscal year will be reported on or about August 24, in its filing of its annual report on Form 10-K with the Securities and Exchange Commission.

Meanwhile, the retailer announced last week that it had completed remodels and upgrades on 51 of its Winn-Dixie stores in the Jacksonville area, comprising locations in North Florida and South Georgia, as part of its Phase II store remodel program. In Phase II, the Company will primarily employ a market-by-market strategy and plans to remodel all of its stores in a Winn-Dixie market before moving on. This approach will help the Company target its advertising efforts and leverage its brand more effectively.

Additionally, Winn-Dixie continued to make progress with the store remodeling program it commenced in the second half of fiscal 2007. The company is on track to remodel roughly half of its stores by the end of fiscal 2010 and substantially all of its stores by the end of fiscal 2013.

As of the end of fiscal 2009, the company had completed 170 store remodels, 73 of which were still within their first year of operation. Of the 73 first-year store remodels, 47 are considered by the company to be offensive remodels. For fiscal 2009, those 47 stores had a 10.3% weighted average sales increase, compared with the same period in the prior fiscal year, excluding the grand re-opening phase. The sales increase resulted from increases in transaction count and basket size of 5.6% and 4.5%, respectively.

Winn-Dixie currently operates 515 retail grocery locations, including more than 400 in-store pharmacies, in Florida, Alabama, Louisiana, Georgia, and Mississippi.