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    Sobeys Posts Slight Improvement for Q2

    STELLARTON, N.S. -- With newly implemented sales and merchandising programs in full swing and more retail selling space than ever, Sobeys, Inc. here reported quarterly basic net earnings per share of 73 cents, or $47.2 million (US $40.8 million), for its second quarter ended Nov. 4, 2006, a rise of 2.8 percent vs. the 71 cents, or $45.8 million (US. $39.6 million), reported last year.

    STELLARTON, N.S. -- With newly implemented sales and merchandising programs in full swing and more retail selling space than ever, Sobeys, Inc. here reported quarterly basic net earnings per share of 73 cents, or $47.2 million (US $40.8 million), for its second quarter ended Nov. 4, 2006, a rise of 2.8 percent vs. the 71 cents, or $45.8 million (US. $39.6 million), reported last year.

    Basic net earnings per share for the 26 weeks ended Nov. 4 came to $1.50, or $97.1 million, an increase of 3.4 percent as opposed to the $1.45, or $94.0 million (US $81.2 million), posted in the year-ago period.

    Included in the second-quarter earnings are $11.1 million (US $9.6 million) in costs related to the business process and system initiative recently rolled out, said the retailer, compared with $4.6 (US $4 million) spent last year.

    Second-quarter sales were $3.25 billion (US $2.8 billion), as opposed to $3.19 billion (US $2.76 billion) in the year-ago period, representing an increase of $65.3 million (US $56.4 million), or 2.0 percent. Same-store sales grew 2.4 percent in the quarter. Year-to-date, sales rose 1.6 percent over last year, with same-store sales growth of 2.6 percent, not counting the wholesale tobacco sale declines lately experienced by the retailer.

    Sobeys attributed both the second-quarter and year-to-date sales growth to its continued rollout of sales and merchandising initiatives across Canada, combined with the increased square footage due to the development of new stores and an ongoing program to expand and renovate existing store assets.

    Sales also rose because of the August acquisition of Achille de la Chevrotiere Ltee and its associated companies. The acquisition included 25 owned or franchised retail store operations, other wholesale supply agreements, and a distribution center.

    Sobeys continued to see declines in its wholesale tobacco sales during the second quarter, however. Wholesale tobacco sales declined $20.0 million (US $17.3 million) in the second quarter of fiscal 2007 compared to the second quarter of the prior year ($45.4 million, or US $39.2 million, on a year-to-date basis). Sales growth was also negatively affected by the company's March disposition of its Cash and Carry business in Ontario and Quebec.

    Companywide capital investment was $144 million (US $124 million) for the second quarter, an increase of $12 million (US $10 million) over last year. Year-to-date cash used in investing activities grew $140.7 million (US $121.6 million), to $297.6 million (US $257.2 million).

    Property and equipment investment this year was $204.6 million (US $176.8 million), $64.4 million (US $55.7 million) more than in the same period last year, reflective of Sobeys' commitment to improving and growing its store network. Companywide capital investment for the first half of the year was $304 million (US $262.7 million), vs. $256.0 million (US $221.2 million) in the year-ago period.

    During the quarter the company acquired 27 corporate and franchised stores and opened or relocated 13, compared with the 12 corporate and franchised stores opened or relocated last year. Another four stores were expanded during the quarter, vs. three stores expanded during the year-ago period. Nine stores closed, compared with 20 last year, while 15 stores were rebannered, vs. one store in the year-ago period.

    Sobeys owns or franchises over 1,300 stores in all 10 Canadian provinces under retail banners that include Sobeys, IGA, Foodland, Price Chopper food stores, and Lawton's Drug Stores.

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