UPDATE 1-Sobeys-owner Empire reports lower profit, to close 50 stores

Thu Jun 26, 2014 9:16am EDT
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* To close 50 underperforming stores

* Raises quarterly dividend by 1 Canadian cent (Adds details from the statement, share close)

June 26 (Reuters) - Empire Co Ltd, the operator of Canadian grocery chain Sobeys Inc, reported a lower quarterly profit and said it would close 50 underperforming stores.

Empire said 60 percent of the closures would be in Western Canada and it expects cost savings to result in an improvement in net earnings.

The company said sales would decline by about C$400 million ($370 million) but did not provide further details.

Empire bought the Canadian arm of Safeway Inc for $5.7 billion to double its reach in the Western provinces and help it compete with U.S. retail giants such as Wal-Mart Stores Inc and Target Corp

The company said on Thursday store closures represent 3.8 percent of the total retail network gross square footage. Empire had more than 1,500 stores as of June 2013, before it bought Safeway stores.

Fourth-quarter sales rose about 40 percent to C$5.94 billion, which included C$1.59 billion from Safeway stores.

Net earnings fell to C$800,000, or 1 Canadian cent per share, in the fourth quarter ended May 3, from C$105.9 million, or C$1.56 per share, a year earlier.   Continued...