September 12, 2013 / 12:11 PM / 4 years ago

UPDATE 1-Empire profit misses estimates as competition intensifies

2 Min Read

* First-qtr net profit falls 40 pct

* First-qtr adj profit from cont ops C$1.32 vs est C$1.55

* First-qtr sales C$4.61 bln vs est C$4.72 bln

* Sobeys same-store sales down 0.1 pct

Sept 12 (Reuters) - Canada's Empire Co Ltd, 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 .

Empire bought Canada Safeway for $5.7 billion in June to bulk up its business as U.S. retailers Wal-Mart Stores Inc and Target Corp expand in the country.

Loblaw Cos Ltd, Canada's biggest grocery chain, consolidated pharmacy assets with a C$12.4 billion deal to buy Shopper's Drug Mart Corp in July.

Empire's total sales increased to C$4.61 billion ($4.46 billion) in the quarter ended Aug. 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.

Sobeys, which operates about 1,500 retail outlets under banners such as Lawtons Drugs, Price Chopper, FreshCo, and Thrifty Foods, recorded a 0.1 percent fall in sales at established stores - an important measure for retailers.

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