STELLARTON, Nova Scotia -- Sobeys here said it expects to exceed its earnings projections for the year, based on results from the first 39 weeks of the fiscal year.
Bill McEwan, president and chief executive officer, said recently the company targeted an earnings-per-share increase of 33 cents (Canadian) for the fiscal year ending May 4. Through the first three quarters of the year ended Feb. 2, the company had already achieved 30 cents EPS growth, he said.
According to McEwan, that progress was achieved in three areas:
National merchandising and retail brand development, targeted to boost earnings per share by 16 cents (Canadian) for the year, was already accounting for a 12 cent-per-share gain through the first three quarters, "and we will exceed our goal for the year."
Distribution and logistics, targeted to account for an earnings increase of 10 cents per share (Canadian) based on reducing the cost per shipped case by 4 to 7 cents, accounted for a boost to earnings per share of 12 cents through the first three quarters, with the cost per shipped case down 4.8 cents.
Expense reductions, targeted at $10 million (Canadian) for the year, or 7 cents per share, have already achieved 80% of that target, "and we will exceed our projected savings of $10 million for the year," he said.
According to McEwan, "We've made tremendous progress over last year, with more to come as we focus region by region and store by store on our core retail food business."
Sales rose 6.6% to $1.5 billion (U.S). for the 13-week third quarter and 6.4% to $4.6 billion for the year to date, with comparable-store sales rising 5.4% for the quarter and 5.3% for the 39 weeks.
The company said it had net income of $22.8 million for the quarter, compared with a loss a year ago, and an increase of 529.5% to $66 million for the year to date.
In reporting results for the quarter and 39 weeks, Sobeys said it was accounting for Serca, its former food-service division, as a discontinued operation.
The company said in January it would sell Serca to Sysco Corp., Houston, with the transaction scheduled for completion by the end of Sobeys' fiscal year in May. McEwan said he expects a definitive agreement to be signed this month.