STELLARTON, Nova Scotia — Empire Cos. here last week said operating income at its Sobeys division was up 3% in the fiscal second quarter, to about $108 million U.S., while comparable-store sales were flat.
Overall sales at Sobeys rose 1.2%, to about $3.8 billion, which the company attributed to new stores and enlargements, along with sales and merchandising initiatives, improved store-level execution, and product and service innovation, partially offset by deflation and competitive pressures. The quarter ended Oct. 30.
Analysts said Sobeys' recent conversions to the FreshCo banner in the Ontario market had sparked a price war there, which depressed comparable-store sales for some operators there, according to reports.
For the 26-week, year-to-date period, Sobeys' operating income rose 3.4%, to about $233 million, on a 1.5% increase in sales, to $7.74 billion. Comparable-store sales were up 0.2% for the period.
Empire, which obtains nearly all is revenues and earnings from the Sobeys division, said net income for the second quarter was $131.2 million, vs. about $69.6 million in the year-ago period, following a $60 million increase in capital gains for the period. The company sold its interest in the Wajax Income Fund during the quarter.
Sobeys operates and franchises about 1,300 grocery stores across Canada under the Sobeys, FreshCo, IGA and Thrifty Foods banners.