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    Sobeys Parent Company Posts Record Q4 Earnings

    Consolidated earnings benefited from grocer's privatization, c.e.o. said.

    Empire Co., Ltd., the parent company of Canadian supermarket operator Sobeys, Inc. yesterday posted earnings of CAN $73.6 million (US $72.6 million), or $1.12 per share, for the fourth quarter ended May 3, vs. CAN $64.1 million (US $63.2 million), or 98 cents last year, a CAN $9.5 million (US $9.4 million) or 14.8 percent increase.

    Fiscal 2008 earnings came to CAN $242.8 million (US $239.6 million), or $3.69 per share, vs. CAN $200.1 million (US $197.4), or $3.04 per share, in the year-ago period, a CAN $42.7 million (US $42.1 million )or 21.3 percent increase.

    The company said the numbers were before capital gains and other items, net of tax.

    President and c.e.o. Paul Sobey said the quarter's earnings "was a record level for the company. Our consolidated earnings benefited from having 100 percent ownership of Sobeys [which went private during the fiscal year] vs. 72 percent a year ago, amplified by Sobeys' continued growth in total and same-store sales, selling margins, and ongoing cost reduction initiatives. The higher earnings contribution from Sobeys more than offset the expected lower earnings from our residential real estate operation."

    Highlights of the quarter included revenue of CAN $3.56 billion (US $3.51 million), an increase of CAN $207.4 million (US $204.7 million) or 6.2 percent; a rise in Sobeys same-store sales of 2.6 percent, and net earnings of CAN $66.5 million (US $65.6 million) or $1.01 per share.

    Among the highlights of the fiscal year were revenue of CAN $14.06 billion (US $13.88 billion), up CAN $698.3 million (US $689.2 million) or 5.2 percent; an increase in Sobeys same-store sales of 2.8 percent; and net earnings of CAN $315.8 million US $311.7 million), or $4.80 per share, vs. CAN $205.8 million (US $203.1 million), or $3.13.

    Sobeys' operating income contribution to Empire in the fourth quarter came to CAN $104.3 million (US 102.9 million), an increase of CAN $29.3 million (US $28.9 million) or 39.1 percent from the CAN $75.0 million (US $74.0 million) recorded in the fourth quarter last year. The grocer posted fourth-quarter operating margin, which is operating income divided by revenue, of 3.06 percent compared with 2.31 percent in the year-ago period.

    For fiscal 2008, Sobeys' operating income contribution was CAN $359.0 million (US $354.2 million) vs. CAN $291.0 million (US $287.1 million) last year. Sobeys recorded operating margin in the fiscal year of 2.64 percent, compared to 2.23 percent in the prior year.

    The CAN $68.0 million (US $67.1 million) or 23.4 percent rise in Sobeys' operating income contribution in fiscal 2008 was mainly attributable to same-store sales growth of 2.8 percent, a continued focus on innovation and cost management initiatives; and lower spending in fiscal 2008 on its business process and system initiatives and business rationalization costs.

    The core businesses of Empire, based in Stellarton, N.S., include food retailing and related real estate. Empire employs about 42,000 people directly and through its subsidiaries.

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