Empire Reports Third-Quarter Loss Due to Sobeys E-Commerce Charges
Empire Co. Ltd., the parent company of Sobeys, has reported a net loss for the third quarter, largely due to e-commerce charges linked to its Voilà service. Despite facing this setback, the Stellarton, N.S.-based retailer achieved $7.9 billion in sales during the quarter ending January 31, marking a 2.1 percent increase from the previous year.
Sales Growth Amid E-Commerce Challenges
In this quarter, Empire experienced a 3 percent rise in same-store sales across its grocery outlets. This growth was driven by both discount and full-price store segments. In contrast, many competitors have seen consumers gravitate towards discount stores.
Impact of E-Commerce Strategy Shift
- Empire reported a significant $746 million writedown related to its Voilà e-commerce strategy.
- Plans to shut down Voilà facilities in Alberta have been announced.
- The closures in Calgary and Edmonton incurred severance and decommissioning expenses.
- A facility being constructed in Vancouver has paused operations.
Due to these e-commerce impairments, Empire’s net loss totaled $385 million, or $1.68 per share, contrasting with net earnings of $146 million, or 62 cents per share, from the same quarter last year. Excluding the impact of the e-commerce impairment, adjusted net earnings rose to $164 million, or 72 cents per share.
Future Outlook for Empire Co. Ltd.
Looking ahead, Empire anticipates an annualized operating income boost of approximately $95 million as it refines its e-commerce strategy. The shift represents a strategic pivot towards partnerships with third-party delivery services.
