US food retailer Roundy's Inc has cut its full-year profits guidance after seeing weak consumer confidence lead to worse-than-expected sales in its fiscal first-half.
For the 26 weeks to the end of June,Roundy's net sales rose by 2%versus the 26 weeks to 2 July 2011,reaching US$1.9bn.The US Midwest-based grocery group reported a 25%jump in net profits over the half-year period,to$26.5m.
However,the increases proved slower than the firm anticipated.It said today(10 August)that it now expects same-store sales for the full-year to fall by between 2%and 3%,versus a previous prediction of a 0.5%to 1.5%drop.
The group also cut its guidance for fully diluted earnings per share,which are now set to be between$0.91 and$1.05.After the first quarter,Roundy's predicted a range of$1.11 to$1.22.
"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 CEO."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."
Second-quarter net sales rose by 1.7%to$996.8m,with new store sales offsetting a 3.3%drop in like-for-like store sales.Still,net profits for the quarter rose by almost 7%,to$18.9m.
Despite the disappointing second quarter,Mariano said the group is pleased with progress at its Chicago stores.The firm said new stores should enable net sales to rise by between 1%and 2%over the full-year,even though same-store sales are likely to fall.