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Acquisition Boosts Sobeys’ Q3 Gains

STELLARTON, Nova Scotia — Sobeys here posted a gain in third-quarter sales following a recent acquisition, and adjusted net income also increased.

As detailed in an earnings report Tuesday from Sobey’s parent company, Empire Cos., Sobeys saw its third-quarter sales rise 8.8%, to about $4.2 billion (U.S.). Excluding the acquisition of 236 gas stations and related convenience stores in last year’s fourth quarter, Sobeys sales were up 2.6%. Same-store sales rose 1.2%. in the quarter.

As reported, net income was down 5.6% for the quarter, to about $67 million. Adjusted for certain one-time gains and losses, net income at Sobeys rose 8% in the quarter, Empire said.

Through the 39-week, year-to-date period ending Feb. 2, Sobeys saw net income rise 12.5%, to $244.4 million, on a sales gain of 9.3% to about $12.8 billion. Adjusted net income through three quarters was up 15.5%.

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“We are pleased with Empire's third-quarter financial results, particularly in a highly competitive operating environment with negligible food inflation,” said Paul Sobey, Empire's president and chief executive officer, in a statement. “The increase in our adjusted net earnings reflects the hard work of our employees and franchisees as we continue to execute on our strategic initiatives. This was exemplified in the quarter with the successful opening of our new automated distribution centre in Terrebonne, Québec.”

Empire, which also derives revenues from investments and other operations, posted net income for the third quarter of $73.3 million, down about 6% on an unadjusted basis. Total sales were up 9%, to about $4.2 billion, vs. year-ago levels.

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