The shares of food retailer Winn-Dixie Stores, Inc. (WINN) grew around 7.7% in the after-hours trading on Tuesday, after it lifted the high-end of its adjusted EBITDA forecast and issued fiscal 2009 net sales view, which is in line with Wall Street estimates. The company also provided fiscal 2010 adjusted EBITDA forecast.
The Jacksonville, Florida-based company now expects adjusted earnings before interest, taxes, depreciation and amortization or EBITDA for fiscal 2009 to be about $164 million, exceeding the high-end of its previous guidance of $152 million. The company attributed the revision 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.
While announcing the third-quarter results back in May, Winn-Dixie had lifted its fiscal 2009 adjusted EBITDA forecast to between $145 million to $152 million from its previous estimate of $110 million to $125 million.
The updated adjusted EBITDA guidance of $164 million would represent an increase of approximately $62 million from the prior year, driven primarily by higher sales and gross profit margin. The forecast also includes $4.4 million due to both the positive sales impact from Hurricanes Gustav and Ike and tropical storm Fay and federal assistance monies provided to the impacted communities.
Further, Winn-Dixie said it expects to report net sales for fiscal 2009 of approximately $7.4 billion, up about $86 million from last year, with 1.2% rise in identical stores sales from continuing operations.
On average, five analysts surveyed by Thomson Reuters expect the company to post sales of $7.38 billion, representing a 1.3% rise from last year's recorded sales of $7.28 billion.
Gross margin for the year is expected to be approximately 28.5%.
As of June 24, 2009, Winn-Dixie had approximately $662 million of liquidity, comprised of $479 million of borrowing availability under its credit agreement and $183 million of cash and cash equivalents. Total capital expenditures were approximately $220 million for fiscal 2009.
The company said its fiscal 2009 results will be reported on or about August 24, 2009, in its filing of its Annual Report on Form 10-K with the Securities and Exchange Commission.
In addition, Winn-Dixie provided guidance for fiscal 2010 adjusted EBITDA, which is expected to be in the range of $170 to $180 million. Identical store sales for the year will be in the range of 1% to 2%, and gross margin is expected to be slightly higher than fiscal 2009. The company also projects full-year LIFO charge to be approximately $10 million.
For fiscal 2010, capital expenditures are expected to be about $220 million, with the company's 75 planned store remodels accounting for approximately $130 million, while the additional $90 million is for retail store maintenance, IT systems, back-up generators, new stores and logistics. The company said it anticipates no borrowings under its credit facility in the year.
Commenting on the forecast, Winn-Dixie Chairman, Chief Executive Officer, and President, Peter Lynch, said, "We continue to make excellent progress with our strategic initiatives and expect another good year in fiscal 2010. We are improving our competitive position through our store remodel program, executing targeted merchandising and marketing activities, and providing better customer service throughout the chain. In addition, we remain focused on managing our cost structure while maximizing the impact of our capital investments. We enter fiscal 2010 as a stronger company, and I am very optimistic about our future success."
Further, Winn-Dixie said it continued to make progress with the store remodeling program it commenced in the second half of fiscal 2007, and 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.
WINN closed Tuesday's regular trading session at $13.08, down $0.17 or 1.28%, on a volume of 351,251 shares. However, shares grew $1.00 or 7.65% in the after-hours trading to close at $14.08.
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