Empire Company reports Q4 profit up from year ago, raises dividend

Grocer's fourth-quarter sales totalled $7.41 billon, down from $7.84 billion last year

Empire Company Ltd. raised its quarterly dividend as it reported its fourth-quarter profit rose compared with a year ago.

The grocery retailer, which owns Sobeys and Safeway among other banners, said Thursday (June 22) it will now pay a quarterly dividend of 18.25 cents per share, up from 16.5 cents per share.

The increased payment to shareholders came as Empire reported its profit for the 13-week period ended May 6 amounted to $182.9 million or 72 cents per share. The result was up from a profit of $178.5 million or 68 cents per share a year earlier.

Empire reported its fourth-quarter sales totalled $7.41 billon, down from $7.84 billion in its fourth quarter last year, which included an additional week.

Same-store sales were up 1.6% while same-store sales, excluding fuel sales, were up 2.6%.

The company said its gross margins increased in the quarter to 26.4% from 25.6% the year before, primarily due to store improvements, lower supply chain costs and the mixed impact of lower fuel sales.

The grocer recently completed a multi-year growth plan, which included store renovations, store expansions including the Farm Boy banner, the conversion of some locations to its discount banner FreshCo, the addition of the Scene+ loyalty program and the improvement of its in-house food brands.

"With our six-year turnaround now complete, we have the tools, team, assets and capabilities needed to thrill our customers, compete and win,'' Michael Medline, president and CEO of Empire and Sobeys, said in a statement.

"Our focus going forward will be on turbocharging our business, with an even greater emphasis on our stores and supply chain, enhancing our digital capabilities and driving efficiency.''

RBC Dominion Securities analyst Irene Nattel said the results were slightly ahead of expectations due to a better gross margin and slightly lower selling, general and administrative expenses in food retail.

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