Empire Co profit rises on higher sales at Sobeys

Thu Sep 13, 2012 8:23am EDT
 
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(Reuters) - Empire Co Ltd EMPa.TO, parent of Sobeys, Canada's No. 2 grocer, reported a 22 percent rise in first-quarter profit on a higher sales contribution from the grocery chain.

Net earnings rose to C$108.9 million ($111.59 million), or C$1.60 per share, in the quarter ended August 4, from C$89.2 million, or C$1.31 per share, a year earlier.

On an adjusted basis, the company earned C$1.52 per share while Sobeys' contribution to adjusted earnings, excluding minority interests, rose 26.7 percent.

Adjusted earnings on investments and other operations, which include Crombie Real Estate Investment Trust CRR_u.TO, residential developer Genstar and Empire Theatres, almost halved to C$3.8 million.

Total sales rose 9.7 percent to C$4.56 billion, while same-store sales, a key measure for retailers, rose 1.8 percent.

Sobeys contribution to sales rose almost 10 percent to $4.51 billion, from $4.10 billion a year earlier.

Sobeys's gross margin fell to 23.15 percent from 24.20 percent a year earlier, the company said.

Analysts on average had expected earnings of C$1.40 per share on revenue of C$4.48 billion, according to Thomson Reuters I/B/E/S.

Shares of the company which has a market value of C$1.95 billion, closed at C$57.58 on Wednesday on the Toronto Stock Exchange.

(Reporting by Sandhya Vijayan in Bangalore; Editing by Supriya Kurane)