STELLARTON — Canada's second-largest grocery chain's results "are not where they need to be," but it has the assets and employees to do much better, the new CEO of Sobeys said Wednesday.
The parent of Sobeys, Empire Co. Ltd., reported Wednesday a modest profit after recovering from a huge loss in last year's third-quarter, when its previous CEO oversaw a write-down involving Sobeys businesses in Western Canada.
Excluding the write-downs, however, Empire's earnings in this year's third-quarter fell by 58 per cent to $34.6 million. Its revenue fell by $137.4 million to $5.89 billion.
"We have the employees and assets to put much better numbers up on the board," Michael Medline, a former Canadian Tire executive who joined Empire in January, said in a statement ahead of a conference call with analysts.
"It is up to management to put in place a game plan to aggressively address our cost and customer issues to return Empire to sustainable and profitable growth and, although it will take time, we will deliver such results."
The statement didn't say how or when Empire hopes to achieve Medline's goals.
Irene Nattel, who covers Canadian retailers for RBC Dominion Securities, said in a brief note that Empire's third-quarter results were "no worse than expected."
Based in Stellarton, Empire had $30.5 million of net income for the 13 weeks ended Feb. 4, or 11 cents per share under generally accepted accounting principles.
Nattel said that was above her forecast of seven cents per share.
A year earlier, Empire had a loss of $1.37 billion, or $5.03 per share, mostly due to a write-down of the Safeway chain — which Sobeys purchased to expand its presence in Western Canada.
It's the first quarterly report issued by Empire and Sobeys since Medline became CEO of both companies, just weeks before the end of the company's fiscal third-quarter on Feb. 4.