Cookies crumbled, milk spilled, and all the eggs fell out of the basket Friday for Winn-Dixie
Winn-Dixie's unappetizing fiscal second quarter yielded a loss of $79.5 million, or $0.57 per share, as compared to a profit of $91.4 million, or $0.65 a share, in the year-ago quarter. Analysts were expecting a profit of $0.08 per share. Sales were down 6%, at $3.6 billion, while same-store sales fell 6.8% based on competition.
A hint of the trouble to come was evidenced in October, when the supermarket company shelved its financial forecasts, with no plans to reinstate them as of yet. The only glimmer of good news is that the company said it still has enough liquidity and cash flow to fund ongoing operations.
It's no secret that supermarket retailers are struggling, as Fool Rick Munarriz said in November. High on the shopping list of concerns are Wal-Mart's
However, during its conference call (transcript courtesy of CCBN StreetEvents), the company cited increased competition not only from the entities above and other traditional grocers such as Kroger
In the call, the company described five ways it plans to get its business back in gear, including work on its brand, cost cutting, market analysis and asset rationalization review, a program to spiff up the image of its stores, and a reengineering of its processes. Saving $100 million every year may require some store closings.
Of course, yes to all these things, including recreating itself as a store where people really want to shop again. Whether success will come this year, two years from now, or never remains to be seen. Turnarounds can happen, but right now Winn-Dixie hardly seems a winning proposition.
Is Wal-Mart walloping Winn-Dixie? Do you think you know why? Talk about the discount giant's competitive muscle with other Fools on the Wal-Mart discussion board.
Alyce Lomax welcomes your feedback via email.