Empire profit misses estimates as competition intensifies
(Reuters) - Canada's Empire Co Ltd EMPa.TO, parent of Sobeys grocery chain, reported an adjusted profit from continuing operations that missed analysts' estimate as competition intensified.
The company attributed a 40 percent fall in first-quarter net profit to higher promotional activities and expenses related with the acquisition of the Canadian assets of Safeway Inc SWY.N.
Empire bought Canada Safeway for $5.7 billion in June to bulk up its business as U.S. retailers Wal-Mart Stores Inc WMT.N and Target Corp TGT.N expand in the country.
Loblaw Cos Ltd L.TO, Canada's biggest grocery chain, consolidated pharmacy assets with a C$12.4 billion deal to buy Shopper's Drug Mart Corp SC.TO in July.
Empire's total sales increased to C$4.61 billion ($4.46 billion) in the quarter ended August 3 from C$4.51 billion a year earlier.
Analysts on average had expected revenue of C$4.72 billion, according to Thomson Reuters I/B/E/S.
Sales at Sobeys, Empire's food retailing unit, rose 2.2 percent to C$4.59 billion.
Net earnings from Empire's continuing operations fell to C$82.6 million, or C$1.21 per share, from C$108.1 million, or C$1.59 per share.
Adjusted earnings from continuing operations fell 19 cents to C$1.32 per share, compared with analysts' estimate of C$1.55 per share. Continued...