Sobeys profit beats as Medline's turnaround plan pays off
Michael Medline’s turnaround strategy at Sobeys is still paying off for parent company Empire and shareholders. Sales and profit topped expectations in the fiscal third quarter at $6.03 billion and 33 cents per share respectively. Recall the grocer is in the midst of a major restructuring, with the so-called Project Sunrise “on track” and plans afoot to convert a quarter of its stores in Western Canada to the FreshCo banner. Really, the numbers speak for themselves: since Medline took the helm last year, Empire shares have surged 51.3 per cent, compared to a 2.5 per cent uptick for Metro and a 4.6 per cent drop in value at Loblaw
Of course, a cloud is hanging over the entire sector after Loblaw came clean on fixing bread prices in what it claimed was an “industry-wide” scheme, which elicited a fierce response from Medline, who threatened to take legal action against its rival if necessary. Empire makes a brief mention of the bread situation in today’s MD&A, saying it is facing class action lawsuits while it cooperates with the Competition Bureau and doesn’t believe it violated the law.
Canada may have won a reprieve on steel and aluminum; not so much on certain uncoated groundwood paper. The U.S. Commerce Department announced preliminary antidumping duties of as much as 22.16 per cent on Canadian newsprint exports, heaped on top of the preliminary countervailing duties ranging from 0.65 per cent to 9.93 per cent announced earlier in the year. All levies are still subject to a final determination by Commerce and then, if necessary, a ruling by the International Trade Commission. Have to point out there’s much more to this story than trade tension when you consider the state of the newspaper industry. We'll chase reaction from some of the newsprint producers and their end users in the States.
TRUDEAU TOUR CONTINUES
The prime minister is into the third day of his victory lap, with stops in Sault Ste. Marie and Regina. Perhaps the most interesting event on his itinerary today: a meeting with newly-minted Saskatchewan Premier Scott Moe. Recall Moe’s predecessor had a habit of butting heads with the PM, and Brad Wall was back at it when we caught up with him earlier this week.
OTHER NOTABLE STORIES:
-Quebecor added 33,700 net new wireless subscribers in the fourth quarter
-The Teranet-National Bank composite home price index fell 0.1 per cent in February, with only three markets (Vancouver, Hamilton and Halifax) managing to post price growth. In the case of Vancouver, its price index hit a new all-time high.
-China’s overnight data dump is shaping up as the early market mover, with industrial production beating expectations by accelerating to 7.2 per cent in the first two months of the year. Retail sales growth was in line with estimates last month at 9.7 per cent.
-Google says it will ban cryptocurrency ads starting in June. Details here
-Best known to us for its work in the oil sands, Horizons North Logistics is buying Shelter Modular in a bid to keep up with demand for affordable shelter in B.C.
-Notable earnings: Empire Company, Quebecor, Seven Generations
-Notable data: Teranet/National Bank monthly housing report, U.S. retail sales
-6:45 a.m. ET: Justin Trudeau meets with Algoma workers in Sault Ste. Marie, Ontario
-8:00 a.m. Et: CN Rail Interim CEO Jean-Jacques Ruest presents at JP Morgan conference in New York
-8:30 a.m. ET: Trudeau tours Algoma Direct Strip Production Complex
-10:30 a.m. ET: Trudeau holds roundtable with steel industry leaders in Sault Ste. Marie
-1:30 p.m. ET: Alberta Economic Development Minister Deron Bilous holds news conference on tech education and skilled workforce needs
-3:40 p.m. ET: Trudeau meets with Regina Mayor Michael Fougere
-4:40 p.m. ET: Trudeau meets with Saskatchewan Premier Scott Moe in Regina and tours Evraz facility
-5:30 p.m. ET: Trudeau holds roundtable with steel industry leaders in Regina
-6:20 p.m, ET: Trudeau holds media avail in Regina
-Foreign Affairs Minister Chrystia Freeland in D.C. for meetings lawmakers and IMF representatives. (visit continues to March 15)
Every morning BNN's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnn.ca/subscribe.