Higher sales at Sobeys help Empire Co beat estimates
(Reuters) - Empire Co Ltd EMPa.TO, reported a 17 percent jump in fourth-quarter profit, handily beating analysts' expectations, helped by higher sales at its Sobeys grocery chain.
The company, which acquired Safeway Inc's SWY.N assets in Canada for $5.7 billion earlier this month, also raised its quarterly dividend by 8.3 percent to 26 Canadian cents per share.
The deal with Safeway, if completed, will cement Empire's position as Canada's No. 2 grocer, behind Loblaw Companies Ltd (L.TO: Quote), at a time when competition from U.S. retailers Wal-Mart Stores Inc (WMT.N: Quote) and Target Corp (TGT.N: Quote) is heating up.
Sobeys, Empire's food retailing subsidiary, operates about 1,500 retail outlets under banners such as Lawtons Drugs, Price Chopper, FreshCo, and Thrifty Foods.
Separately, Empire said on Thursday that it sold 24 theaters and 170 screens in Atlantic Canada and 2 theaters with 48 screens in Ontario to Cineplex Inc for C$200 million. It also sold 20 theaters and 179 screens in Ontario and Western Canada to Landmark Cinemas for C$55 million.
"The decision aligns with the strategic direction of the company to focus our resources on our food retail business," Chief Executive Paul Sobey said in a statement.
Net income rose to C$107.4 million ($102.56 million), or C$1.58 per share, from C$92.1 million, or C$1.35 per share, a year earlier.
On an adjusted basis, the company earned C$1.45 per share.
Total sales rose to C$4.31 billion from C$4.07 billion a year earlier. Sales at Sobeys rose 5.8 percent to C$4.26 billion. Continued...