STELLARTON, N.S. — Empire Co. Ltd. reported a second-quarter profit of $181.1 million, down from $189.9 million in the same quarter last year.
The grocer, which owns Sobeys, Safeway and FreshCo stores, said its profit amounted to 72 cents per diluted share for the 13-week period ended Nov. 4, down from 73 cents per diluted share a year earlier.
Sales for the quarter totalled $7.75 billion, up from $7.64 billion in the same quarter last year.Â
The increase in sales was primarily driven by positive growth across the business, but especially in discount, the company said. This echoes comments by its competitors Metro and Loblaw in recent earnings reports, which said customers are increasingly seeking out better prices at their discount banners amid the rising cost of living.Â
Empire had announced plans six years ago to convert up to a quarter of its 255 Safeway and Sobeys stores in Western Canada to its discount banner FreshCo. As of mid-December, the company said it has 46 FreshCo stores in Western Canada with one more slated to open in fiscal 2024.Â
Same-store sales for the quarter gained 2.2 per cent, while same-store sales, excluding fuel sales, rose 2.0 per cent.
On an adjusted basis, Empire said it earned 71 cents per diluted share in its most recent quarter, down from an adjusted profit of 73 cents per diluted share a year ago.
Empire chief executive Michael Medline said while higher interest rates and overall economic uncertainty are impacting customer purchasing behaviours, the fundamentals of the business remain strong.
The company has accelerated investments in renovations, conversions and new stores in recent years, the company said in its release. Investing in its store network will continue to be a priority, particularly when it comes to renovations and expanding its discount network.Â
The grocer's results came in as expected, said RBC analyst Irene Nattel in a note.Â
Empire continues its strategy to maximize revenues in its full-service stores, which are losing traffic to discount banners, while the company also grows its discount footprint, she said.Â
This report by The Canadian Press was first published Dec. 14, 2023.
Companies in this story: (TSX:EMP.A)
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