Winn-Dixie's Restructuring Plan Paying Off

The 70-year-old company reported third-quarter profit of $39 million or 28 cents per diluted share on sales of $3 billion.

That performance compares with third quarter 2000 net earnings of $10.3 million or seven cents per diluted share on revenue of $2.8 billion, a sales decrease of 5.7%.

Year-to-date net earnings, excluding restructuring costs, was $91 million or 65 cents per diluted share compared to $54.7 million or 37 cents per diluted share in the comparable 2000 period.

Despite the drop in sales, Winn-Dixie's president and CEO Al Rowland says in a prepared statement he believes the store restructuring program will rev up sales by the time it is completed. The retrofits to date have generated a return on capital of 50%.

"This is in line with our expectations and our projected results," Rowland says. Expense reductions are evident, he says. "Centralized procurement is starting to improve our gross profits," he notes. "Our focus now is on improving store operations and customer count, which will improve sales."

The company has retrofitted 426 stores out of a planned 690 store restructurings at an estimated cost of $144 million ($88.6 million after tax or 63 cents per diluted share). The grocer has closed 34 locations.

Winn-Dixie has 1,155 active stores versus 1,189 a year ago. Of Winn-Dixie's 1,155 stores, 972 exceed 35,000 sf with 794 being Marketplace stores at about 70,000 sf each.

Nine new stores are under construction. The company plans to open 19 new stores, buy 77 new locations and remodel 12 existing stores by the end of its current fiscal year, according to the statement.