Tuesday, May 11, 2010

Winn Dixie Customers Stop Eating Shareholders Starve

Winn Dixie (WINN) released results and on the earnings call blamed cautious eating habits in the south east of the USA. Peter Lynch the Chairman and CEO let it slip that store visits are down some 3.4%. Peter that’s because the consumer does not like coming to your stores. He did mention that they are working on their merchandising and other ways of attracting consumers with money in their pockets.

Meredith Adler of Barclays Capital did get Bennett Nussbaum SVP and CFO to admit that while he still has not discussed it with the Board Winn Dixie will become a net borrower in 2011. Board of Directors please consult your governance practices you should already be aware of this.

The stock has no dividend and the cash flow cannot keep up with capex. No discussion about when this critical factor will reverse and investors will see some real returns.

Disclosure: No position in this stock