JACKSONVILLE, Fla. -- Winn-Dixie Stores here said last week sales increased for the second quarter ended Jan. 12 but declined for the half, while comparable-store sales also fell.
the year-to-date, and average-store sales fell 0.4% for the quarter and 1% for the year-to-date.
The company also said it had a net loss for the quarter, reflecting an after-tax reserve of $41.2 million related to a previously disclosed decision in U.S. Tax Court here regarding corporate-owned life insurance; for the half the company reported a drop in net earnings.
The tax court decision, which came in the wake of an overall crackdown by the federal government on corporate tax shelters, held that Winn-Dixie could not deduct interest paid on loans it took out on life insurance policies covering 36,000 employees in 1993.
The after-tax reserve resulted in a net loss of $18.8 million for the quarter, or 13 cents per share, while net income for the half fell 95.1% to $3.3 million, or 2 cents per share. Excluding the reserve, net earnings for the quarter were down roughly 50% to $22.4 million, or 15 cents per share.
Al Rowland, who was named Winn-Dixie president and chief executive officer two months ago, said "I am certainly not pleased with our performance last quarter, even before the special tax litigation charge, which relates as far back as 1993. Our focus now is on the future and on implementing an efficient, customer-focused organization."
In a separate development, Winn-Dixie said last week the U.S. District Court here has approved a July 1999 settlement totaling approximately $33 million, which will be paid to the plaintiffs in a class-action discrimination suit filed on behalf of certain current and former female and African-American employees. The company said it will pay down the settlement over the next seven years, pending court approval.
