Empire Co profit falls 6 percent on one-time charge

(Reuters) - Empire Co Ltd , parent of Canada's No. 2 grocer Sobeys, reported a 6 percent fall in quarterly profit after taking a one-time charge related to an equity accounted investment.

Net earnings fell to C$75.2 million ($73.2 million), or C$1.11 per share, in the third quarter from C$80 million, or C$1.17 per share, a year earlier.

The company booked a one-time charge from an equity accounted investment of C$4.8 million.

On an adjusted basis, the company earned C$1.17 per share while Sobeys' contribution to adjusted earnings, excluding minority interests, rose 8 percent.

Sales rose 9 percent to C$4.34 billion. Sobeys same-store sales, a key measure for retailers, rose 1.2 percent.

Sobeys, which ranks behind Loblaw Cos Ltd's Loblaws chain, contributed almost 9 percent to sales at C$4.28 billion, up from C$3.94 billion a year earlier.

Gross margin at Sobeys fell to 22.93 percent from 24.11 percent a year earlier, the company said.

Analysts on average expected earnings of C$1.15 per share on revenue of C$4.30 billion, according to Thomson Reuters I/B/E/S.

No. 2 U.S. discount retailer Target Corp is opening its first Canadian stores in 2013. Grocery retailers in Canada, including Loblaw and Metro Inc , already compete with an expanding Wal-Mart Stores Inc .

Target's incursion may hurt Sobeys less than its rivals as the Empire chain has an agreement to supply the U.S. discount retailer with groceries.

Loblaw reported an 18 percent fall in fourth-quarter profit on a restructuring charge and said sales growth in 2013 would be affected by a new competitor.

Empire shares were little changed at C$65.48 in early trading on the Toronto Stock Exchange on Tuesday.

(Reporting by Maneesha Tiwari in Bangalore; Editing by Joyjeet Das)

Source: http://news.yahoo.com/empire-profit-falls-6-percent-one-time-charge-134845078--sector.html

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