Empire strikes back: Sobeys, Safeway owner enjoys turnaround

One of Canada’s largest grocers outperformed analyst expectations in its latest quarter as the once-struggling chain increased its market share and marked the halfway point of its multi-year transformation plan.

“We are gaining traction,” said Michael Medline, Empire Co. Ltd.’s chief executive, during a conference call with analysts Thursday after the company released its second-quarter results.

The firm behind Sobeys and Safeway stores reported a profit of $103.8 million or 38 cents per share for the quarter ended Nov. 3 compared with a loss of $23.6 million or nine cents per share in the same quarter the previous year. It earned 40 cents per share for the quarter on an adjusted basis, up from an adjusted profit of 27 cents per share in the same quarter last year.

Analysts on average had expected a profit of 32 cents per share, according to Thomson Reuters Eikon.

The company saw its highest same-store sales, a key retail metric, in 15 quarters, Medline said. It rose 2.5 per cent — excluding fuel. Sales totalled $6.21 billion for the 13-week period, up from nearly $6.03 billion a year ago, boosted by higher fuel prices.

Empire also saw its second consecutive quarter of tonnage growth at 1.7 per cent, he said.

“It’s here, there and everywhere,” Medline said when asked where the company is taking market share and from which competitors.

The company is performing better in almost every area of its business, he said, and all the regions are starting to pull their weight.

“It’s just good, consistent performance across the country,” he said. That includes the Western region where the company is seeing much better performance.