Empire Co., the parent company of Sobeys, has reported a slight profit for its fiscal second quarter, reversing last year’s loss related to a writedown. However, on an underlying basis, results were markedly low and the group’s new CEO admitted that it had a lot of work to do.
For the three months to 4 February 2017, it reported a net profit of C$30.5m, compared to a loss of C$1.37bn. However, on an underlying basis, profits fell by 58.1% to C$34.6m and revenue was down 2.3% to C$5.89bn.
CEO Michael Medline later told analysts that research suggested that shoppers felt “we really let them down”, adding “I think we strayed away about talking about our overall value proposition. Canadians should shop us for a variety of reasons . . . and we got focused on talking only about price.”
Medline said the group has made progress on addressing those issues, but admitted that further cost cuts are needed.