Sobeys Ups Parent Co.'s Q2

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Sobeys Ups Parent Co.'s Q2

Empire Co., Ltd., the parent company of top Canadian grocer Sobeys, yesterday posted earnings of CAN $63.2 million (US $51.2 million) before capital gains and other items for its second quarter ended Nov. 1, 2008, vs. CAN $59.9 million (US $48.5 million) in the second quarter last year, a CAN $3.3 million (US $2.7 million) or 5.5 percent rise.

Contributing significantly to this positive performance was the 5.4 percent same-store sales increase reported by Sobeys, which also saw higher earnings during the quarter.

"Empire's second-quarter growth is largely the result of continued strong performance of Sobeys," confirmed Empire president and c.e.o. Paul Sobey. "The positive growth trend in same-store sales and earnings reflects a steadfast focus on day-to-day execution, the impact of merchandising innovations, and disciplined implementation of cost and productivity initiatives."

Sobeys' revenue for the second quarter was CAN $3.66 billion (US $2.96 billion), an increase of CAN $253.5 million (US $205.2 million) or 7.4 percent from the year-ago period. Sobeys' retail sales growth was a result of increased retail selling square footage from new and acquired stores and store enlargements, as well as the ongoing implementation of sales and merchandising initiatives and moderate food price inflation, according to Empire.

Sobeys' operating income contribution to Empire in the quarter was CAN $94.7 million (US $78.9 million), a rise of CAN $3.9 million (US $3.2 million) or 4.3 percent from the CAN $90.8 million (US $73.5 million) posted last year. Included in Sobeys' second-quarter fiscal 2009 operating income contribution to Empire was a CAN $6.2 million (US $5.0 million) increase in depreciation and amortization expense, reflecting the grocer's continued capital investments.

Sobeys opened, acquired, or relocated 11 stores in the second quarter, vs. 26 in the year-ago period, expanded three, as opposed to six last year, rebannered or redeveloped five, compared with 13 in the second quarter of fiscal 2008; and closed seven, in contrast with 19 in the previous year.

As of Nov. 1, 2008, Sobeys' square footage totaled 27.4 million square feet, a 1.5 percent increase over the 27.0 million square feet operated at the end of the second quarter last year.

Stellarton, N.S.-based Empire's core businesses include food retailing and related real estate. The company employs about 42,000 people directly and through its subsidiaries.