CANADA: Net profit declines at Empire

By: just-food.com | 29 June 2009

Empire Co., which operates the Sobeys food retail business, has seen annual profits decline by almost 16% despite a rise in sales.

Net profit for the year to 2 May 2009 fell 15.8% to C$265.9m (US$230.3m) from $315.8m in the previous fiscal year.

Annual sales rose by 6.8% to $15.02bn, with Sobey's same-store sales rising by 5.2%.

Net earnings for the fourth quarter fell by 4.4% to $63.6m, from $66.5m in the comparable quarter last year, with revenues up of 4.2% at $3.71bn. Sobeys same-store sales rose by 4.6% in the fourth quarter.

The company said the decline in profitability had been expected and was attributable to a decline in investment and real estate income, with the food retailing business producing strong sales and earnings growth.

"Empire's operating earnings and shareholder value continued to strengthen in fiscal 2009 as we clearly focused on our strengths in food retailing and real estate," said Empire president and CEO Paul Sobey.

"Our consolidated performance in the fourth quarter is consistent with our expectation, driven largely by continued strong same-store sales and earnings growth at Sobeys and as we advised last quarter, a decline in earnings contribution from our residential real estate operation as well as from our interest in Wajax Income Fund."

Operating income from food retailing for the full year rose by 11.8% to $401.4m, but fell in the fourth quarter from $104.3 to $102.6m

Food retailing revenues for the full year rose from $13.77bn to $14.76bn, and for the fourth quarter from $3.48bn to $3.65bn.

Sectors: Retail

Companies: Empire Co.