Empire Co. Suffers $2 Billion Loss

CBJ — The parent company of Sobey’s grocery stores has seen its stock plunge after reporting a massive $2 billion loss, largely attributed to overpaying for the Safeway brand.

Empire’s losses in Western Canada is due to a recognition that the long-term value of the Safeway business is lower than previously estimated.

Excluding that write-down and certain other items, Empire Co. would have had $82.5-million of adjusted earnings in its fiscal third quarter – down 36% from $118.6-million.

The net loss amounted to $5.03 per share, which included a $1.59-billion write-down of goodwill associated with the Safeway purchase. After adjustments, Empire earned 30 cents per share in the 13 weeks ended Jan. 30.

A year earlier, Empire’s fiscal third-quarter had $123.6-million of net income or 45 cents per share and $118.6-million of adjusted earnings, or 43 cents per share.

Revenue was up $86.7-million over the 13 weeks ended Jan. 30 to $6.03-billion from $5.94-billion in last year’s third quarter, mainly because of food inflation and the acquisition of Co-op Atlantic.