Sobeys continued to take a sad song and make it better during the opening quarter ended Aug. 5, achieving a climb in comps for the first time in over a year.
“I am obviously pleased with our results in Q1, said Michael B. Medline, president, CEO and director of Empire Co., Sobeys parent, during Thursday’s earnings call.
“We achieved positive same-store sales for the first time in six quarters, had a slight increase in our transaction count on flat tonnage and we had a good increase in basket size in the face of less than conducive summer weather,” he continued.
The 0.5% rise in same-store sales excluded fuel.
Stellarton, Nova Scotia-based Empire also reported an 18.9% year-over-year jump in adjusted net earnings at $87.5 million or $0.32 per diluted share.
The growth in comp sales signals a rebound from the previous quarter’s 1.6% decline.
Overall sales for the first quarter rose by 1.4% and gross profit followed suit, climbing from 24.1% to 24.4%.
Medline credited the store’s improved performance on execution, upgraded promotions and “both actual and perceived” pricing position for the positive numbers.
Since May, Sobeys has been in the midst of a three-year turnaround effort referred to as Project Sunrise.
The initiative is designed to simplify the organizational structure of the company while reducing costs.
Sobeys hopes that the project will result in an estimated $500 million of annualized cost savings by fiscal 2020.
At the close of segment four, Medline said that the company is “nowhere near where we need to be,” and though he’s optimistic about the progress, he issued a similar statement on Thursday.
“I would caution you not to assume that all of our future quarters will be as strong as this one or that our rate of improvement will be as straight line as we complete the transformation of the company,” he said.
“We feel good about the incremental progress that we have made since beginning to work on Project Sunrise in early May, but recognize that there’s still many areas of the business that require improvement.”
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