Sobeys Parent, Empire Company, Reports Fourth Quarter Results
STELLARTON, NS - Just six months after Sobeys inked a deal with Ocado to build its online presence, and mere weeks following its announcement of an executive shakeup, the company’s parent, Empire Company, has released fourth quarter results reflecting the changes it has made over the course of the past year and more.
The quarter, which ended May 5th, shows that Sobeys brought in $5.89 billion Canadian dollars, or $4.48 billion U.S. dollars. The results hiked 1.5 percent from about $5.80 billion for last year’s fourth quarter. Up 0.5 percent was same-store sales, but were flat excluding fuel. Nevertheless, the slight increase is a reprieve from last year’s decreases of 1.1 percent overall and 1.6 percent excluding fuel.
Further, Sobeys' total revenue for fiscal 2018 brought in $24.21 billion—which is 1.7 percent higher than last year’s $23.81 billion.
“We are proud of our achievements this year,” President and CEO Michael Medline shared in a press release. “We have restructured our company, taken out significant costs and stabilized our margins. This has generated an improvement in adjusted earnings of 80% and an increase in free cash flow of 27%. Going forward, our principal mission will be to grow sales and take back market share. This is not a simple task, but we now have the strategy, tactical game plan and team to get it done.”
Overall, Empire’s adjusted net earnings, net of non-controlling interest, came out to $93 million, or $0.35 per diluted share—this is nearly double of what it made last year, which came out to $50.2 million, or $0.18 per diluted share.
The closing of 10 Safeway stores in British Columbia, as well as other aggressive business strategies made by competitors, had a negative impact on Sobeys' parent company, Medline expressed on an earnings call. These factors impacted the company by 13 basis points on comparable store sales. Moving forward, though, the company is zeroing in on its restructuring efforts.
“As I said before, the biggest challenge we faced in Q4 and continuing into Q1 has been the material organizational restructuring changes we have seen especially in merchandising,” Medline said on the call. “Almost every single person in merchandising is in a new and/or expanded role. It is not reasonable to expect we would be on top of our game through this time. However, this was all expected as we discussed with all of you [indiscernible] over the last 13 months. In fact, we were exceedingly proud of our people, in the midst of a great deal of disruption they grew food comps, improved margins and took out cost in this disruptive period.”
According to the company’s press release, Empire launched Project Sunrise, a comprehensive three-year transformation to address the organization’s structure and to reduce costs by a whopping $500 million+ in annualized cost savings by the end of fiscal 2020. This launch is on track after its first year and benefits are seen as in-line with management’s expectations.
How will Empire’s phoenix-like efforts in this next phase of restructuring continue Sobeys growth? AndNowUKnow will keep you updated with the latest.