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Sobeys' Parent Company Posts Q4 Results, Reports Huge Loss

Sobeys' Parent Company Posts Q4 Results, Reports Huge Loss

Thursday, June 30th, 2016

As Empire Company Ltd., the parent company of the Sobeys chain, releases its 2016 Q4, the company has noted a net loss of $942.6 million.  This loss of loss of $3.47 per diluted share is a drop from last year’s fourth quarter reported net profit of a $55.4 million, or $0.20 a share.

“The previously reported challenges in Western Canada that have had a negative effect on our results over the past three quarters, deepened through the fourth quarter, with impacts felt across additional banners in the West and which have led the Company to incur an impairment charge of $1.3 billion dollars in addition to the charge recorded in the third quarter,” said Marc Poulin, President and CEO, Empire Company Limited, in a recent press release. 

Other highlights from the Q4 report, when compared to the same quarter from 2015, are as follows: 

  • Sales up 8.9 percent to $6,283.2 million from $5.7 million
  • EBITDA decreased $1,283.5 million to $(1,047.2) million from $236.3 million last year
  • Adjusted net earnings, net of non-controlling interest, of 95.3 million, decrease of $998.0 million from $55.4 million
  • Free cash flow generation of $82.5 million, decrease of 39.3 percent from $136.7 million

Empire cited its recent integration of Safeway’s Canadian operations as the main factor behind the loss, although the Q4 report also listed that Sobeys’ same-store sales also decreased by 1.8 percent. Empire stated that if not for fuel sales and the chain’s West business retail unit  having a negative impact on the numbers, same-store sales would’ve increased by 0.2 percent. 

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“Management is also seeing early evidence of a softening sales trend in other regions of the country. Although management remains focused on reversing these negative trends by continuing on our core strategies of cost reduction, network renewal, and relevant pricing for our customers, the stabilization of our business will take time,” finished Poulin. 

The company’s Board of Directors also announced an increase of 2.5 percent to the annual dividend per share to be paid quarterly, from $0.40 per share to $0.41 per share. 

Empire’s 2016 Q4 spanned 14 weeks, whereas last year's was just 13 weeks.

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