Sobeys' Parent Scores Record Earnings

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Sobeys' Parent Scores Record Earnings

Empire Co., Ltd., the parent company of Canadian grocer Sobeys, reported earnings before capital gains, net of tax, for its first quarter ended Aug. 2, 2008 of $70.3 million ($1.07 per share), vs. $60.4 million (92 cents per share) in the first quarter last year, a $9.9 million or 16.4 percent increase.

Also during the first quarter, revenue went up $258.8 million or 7.4 percent to $3.78 billion; Sobeys' same-store sales grew 3.0 percent.

"Empire's earnings benefited from having 100 percent ownership of Sobeys," noted Empire president and c.e.o. Paul Sobey, "and the significant increase in year-over-year earnings contribution from Sobeys, which more than offset an expected lower earnings contribution from our real estate division."

Empire took Sobeys private in June 2007.

Sobey added that the company would "continue to grow the long-term sustainable value of Empire by focusing our efforts and capital on our core food retail and related real estate businesses, driven by our commitment to operational excellence, innovation, and disciplined growth."

Stellarton, N.S.-based Sobeys' revenue was $3.71 billion, an increase of $270.5 million or 7.9 percent compared with the year-ago period. According to Empire, the grocer's retail sales growth was a result of the ongoing implementation of sales and merchandising initiatives across Canada, combined with an increase in retail selling square footage from new stores, store enlargements, and the acquisition of Thrifty Foods in September 2007.

Sobeys' operating income contribution to Empire in the quarter came to $105.5 million, a rise of $10.3 million or 10.8 percent from the $95.2 million posted last year.