Milwaukee-based Roundy’s Inc. reported third quarter adjusted net income of $8.8 million, or 20 cents per share, down from $12.4 million, or 41 cents per share, in the same period a year ago.
The company’s quarterly net sales decreased 0.3 percent to $973.6 million for the third quarter
“During the third quarter, our results continued to be negatively affected by the general weakness in the overall economy and increased competitive environment,” said Robert Mariano, Roundy’s chairman, president and chief executive officer. “We have worked very hard to strengthen our leading market position as a provider of quality, value and convenience to consumers, but the impact of increased price investments and promotional activities on our gross margins and profitability was greater than we anticipated. In addition, customers did not respond as enthusiastically as we had expected to our Monopoly promotion program, which contributed to last year’s very strong third quarter results. As we look ahead, we are carefully examining our entire operation for ways in which we might improve sales and earnings and, accordingly, have already made adjustments to our pricing and promotions to drive our performance. Despite the headwinds in certain of our core markets, we continue to be pleased with the performance of our Chicago area stores. With eight Mariano’s now open in the Chicago area, we are gaining significant traction, and continue to invest in the growth of that market. We believe that our continued focus on enhancing the execution of our overall business model will position us to deliver greater overall sales growth and profitability.”
Looking forward, Mariano said, “Recognizing that the economy and competitive environment are likely to remain challenging into fiscal 2013, we are reducing our quarterly dividend to strengthen our balance sheet and increase our financial flexibility. We believe that it is in the best long-term interest of our shareholders as it will enable us to continue to invest in the business and expand our growth banner, Mariano’s, in the Chicago market, as well as provide cash flow to pay down debt. Our new dividend policy will continue to provide for a dividend pay-out as a percentage of net income and dividend yield that is very attractive relative to our peers.”