Roundy's Cites Q2 Sales Pressures

MILWAUKEE — Roundy’s [3] here said Thursday frugal shoppers and aggressive promotions by competitors hurt its sales in the second quarter.

The company, parent of the Pick ’n Save, Rainbow Foods and Mariano’s Fresh Market banners in the Midwest, said its comparable-store sales fell 3.3% for the 13-week quarter, which ended June 30. The declines were driven by a 3.2% decline in transaction count and a flat average transaction size, compared with the year-ago second quarter.

“Our second quarter results reflect the ongoing effects of a challenging economic environment on our business and our consumers,” said Robert Mariano, Roundy’s chairman, president and chief executive officer, in a statement. “Our top line results were constrained by an increasingly price-conscious consumer and greater than anticipated pricing and promotional activity in several of our major markets.”

Read more: Roundy's Q1 Comps Get Sacked [4]

Net income for the quarter was up 6.6%, to $18.9 million, on a 1.7% increase in sales, to $996.8 million, vs. year-ago levels. Through the first two quarters, net income was down about 20%, to $21.2 million, on a 2% gain in sales, to $1.9 billion, following some one-time charges and unfavorable comparisons in the first quarter. Same-store sales were down 2.7% year-to-date, including a 2% decrease in the number of transactions.

Mariano said the “headwinds” it faced in the quarter were “worse than expected” and that it reduced its financial outlook for the full year. Sales growth is now projected to be about 1% to 2%, with same-store sales down between 2% and 3%. Roundy’s had previously projected sales gains of 2.5% to 3.5% for the year with same-store sales down 0.5% to 1.5%.

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