(Bloomberg) — Southeastern Grocers’s third quarter earnings took a hit as the owner of the Winn-Dixie, Harveys Supermarket and Fresco y Más chains continued to shutter or offload more stores, according to people with knowledge of the closely held company’s performance.
The company generated $1.79 billion in revenue, a decline of 16% from the same period a year ago and a 2.7% drop from 2019, said the people, who asked not to be identified because the results are private.
Earnings before interest, taxes, depreciation and amortization were $54 million, down 51% year-over-year but up 21% from 2019, the people said. Excluding the impact of the store closures, the company is expected to generate $375 million of earnings in 2021, they said.
A company representative declined to comment.
Southeastern has reduced its scale after selling off its Bi-Lo locations and getting out of the highly competitive Carolinas markets. That left the company with stores in high-growth areas such Florida, Alabama and Louisiana.
During the third quarter, same store sales crept up 0.8% from a year earlier and jumped nearly 20% from 2019 levels, the people said. Management expects 70% of the stores to be renovated, they added.
The company has embarked on a corporate overhaul and improved its performance since 2018, when its high debt burden and thin profit margins drove it into bankruptcy. New owners including Fidelity Investments and AllianceBernstein Holding got a chunky payout for sticking with the grocery chain’s multiyear turnaround and the pandemic.
As of the third quarter, Southeastern’s gross leverage stood at 0.9 times earnings, based on $359 million of debt and $407 million of earnings for the last twelve months, the people said. Liquidity totaled $507 million, consisting of $386 million of availability under revolver and $121 million of cash, they said.
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