Sobeys Posts Sales Gains in Q4

STELLARTON, Nova Scotia — Empire Co., parent of the Sobeys chain in Canada, posted revenue gains for the recently ended fiscal year but said net income fell for both the fourth-quarter and full-year periods. Same-store sales at Sobeys were up 4.6% for the quarter and 5.2% for the year, which ended May 2. The company said inflation accounted for about 3% of the gain in the most recent quarter. Although

STELLARTON, Nova Scotia — Empire Co., parent of the Sobeys chain in Canada, posted revenue gains for the recently ended fiscal year but said net income fell for both the fourth-quarter and full-year periods.

Same-store sales at Sobeys were up 4.6% for the quarter and 5.2% for the year, which ended May 2. The company said inflation accounted for about 3% of the gain in the most recent quarter.

Although Sobeys said it incurred higher costs from some severance-package payouts and an increase in incentive bonuses in the period, EBITDA rose by about $3.4 million (U.S.), to about $115.8 million. Revenues at the chain, which is the second-largest operator in Canada behind Loblaw Cos., were up about 5% for the quarter, to nearly $3.2 billion.

For the year, Sobeys said EBITDA rose 10.6%, to about $609 million, on a 7.2% gain in sales, to about $12.8 billion. The results include volume from the 2007 purchase of the Thrifty Foods chain. Excluding the impact of that acquisition, annual sales growth would have been 5.6%, Sobeys said.

In a conference call with investors, Bill McEwan, president and chief executive officer, Sobeys, said transaction size and customer counts increased in the period.

“The majority of the growth — although not as much as in prior quarters — was driven by transaction size vs. customer-count increase,” he said. “But we did have improved customer count and modestly lower transaction size increases.”

Sobeys also last month opened another of its small-format Sobeys Urban Fresh stores in Toronto.

“It's a great store and a great location, well conceived,” McEwan said of the new Toronto store, one of several featuring the Urban Fresh format. “It has the benefit of the learning from all the other stores that we had.”

He said the Urban Fresh concept “has been accepted very well” by consumers.