Sobeys turnaround strategy looks to be translating into dollar signs in the company's latest financial report. Parent company Empire Company Limited has announced financial results for its first quarter 2018, revealing improved earnings and same-store sales, signifying what seems to be a rebound for the supermarket chain.
“We are encouraged by our first quarter results. Stabilizing margins, good cost control, and an increase in same-store sales combined with our important transformational work of Project Sunrise gives us a level of optimism not seen in the business for some time,” said Michael Medline, President and CEO. “Having said that, we must continue the heavy lifting of Project Sunrise, while beginning to make important strides in our brand and customer experience. We still have a lot of work ahead of us to thrill our customers and improve our bottom line.”
Last year, amidst disappointing fourth quarter performance, Empire introduced Project Sunrise, a three-year cost-cutting initiative intended to streamline organizational structure and improve financial performance. In a company release, the chain noted that the project is on track. And the transformation brought on by Project Sunrise is expected to result in approximately $500 million in annualized cost savings by fiscal 2020, and these savings will allow the company to grow its earnings and re-invest in the business, growing both its sales and earnings.
Highlights from Empire’s financial report include:
The company also noted that one-time costs—associated with severance, relocation, consulting, and minor system developments, most of which are expected to be incurred in the first half of fiscal 2018—had adverse impacts on EBITDA and gross profit. Despite this, EBITDA and gross profit increased slightly and adjusted EBITDA, excluding the effects of these costs, increased by 14.6% to $278.8 million.
News of the company's improved results set stocks soaring to an 18-month high.
The complete results of the company’s Fiscal 2018 Q1 can be viewed here.
As retailers continue making headlines, Deli Market News will be here to report.