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

Empire Company Ltd., the parent corporate of grocery chain Sobeys, hiked its quarterly dividend paid to shareholders as it reported its fourth-quarter profit rose compared with a year ago amid persistent criticism of rising food costs and inflation.

The Canadian grocery giant on Thursday says its profit for the 13-week period ended May 6 increased to $182.9 million, or 72 cents a share, up from a profit of $178.5 million or 68 cents a share a year earlier.

Empire — the parent company of Farm Boy, Safeway and FreshCo — announced a dividend increase to shareholders of 10.6 per cent.

The company says it will now pay a quarterly dividend of 18.25 cents a share, up from 16.5 cents a share.

These results come after the grocery retailer saw third quarter profits plunge 38 per cent in March, thanks partly to a massive cyberattack late last year, and partly to customers seeking bargains amid high inflation. After initially estimating the cost of the attack — which it referred to as a “cyber event” — at just over $25 million, Empire said the net cost will be $32 million.

At the same time, food prices have soared by 18 per cent over the past two years, piling on to Canadians’ grocery bills, and as of April, food prices were still 8.3 per cent higher than a year ago, according at a recent RBC report.

Earlier this year, grocery chain CEOs, including Empire’s Michael Medline, Loblaw boss Galen G. Weston and Metro’s Eric La Flèche, were grilled on Parliament Hill by MPs concerned about rising food prices. Medline denied any profiteering.

The company on Thursday said its gross margins increased in the quarter to 26.4 per cent from 25.6 per cent 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 Plus loyalty program and the improvement of its in-house food brands.

This is a developing story.

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