Empire Co. Ltd. had a net loss of $385 million in the third quarter as Sobeys’ parent company shut down its e-commerce banner Voilà in Western Canada.

The loss of $1.68 per share was a 371 per cent drop from earnings of 62 cents per share in the same period last year.

Changes to Empire’s e-commerce business included the closure of its Alberta e-commerce facilities in late January and a pause in the development of its customer fulfilment centre in the Vancouver area.

The retailer said the moves followed a financial assessment of its e-commerce network during the third quarter, which found the Calgary customer fulfilment centre and its support facility in Edmonton had not achieved financial or operational expectations.

“During this quarter, we reassessed expected performance across our Voilà network and announced action to improve near-term earnings and increase customer choice,” chief executive Pierre St-Laurent said during an earnings call on Thursday.

Empire said the size of the Alberta grocery e-commerce market was smaller than originally anticipated.

The closure of the Albertan facility resulted in $746 million in impairment losses and restructuring charges in the quarter, including severance costs, one-time cash contract termination payments and decommissioning costs.

Adjusted earnings were $164 million, or $0.72 per share, in the quarter, up 12.3 per cent compared to $146 million, or $0.62 per share, in the same period last year.

Empire said it would expand its third-party delivery partnerships through a new collaboration with DoorDash Inc., expected to roll out in the coming months.

DoorDash and existing partnerships with

Instacart

and Uber Eats announced in fiscal 2025 complement Empire’s e-commerce service Voilà as delivery options for its banners, including Sobeys, Farm Boy, Longo’s, FreshCo, Safeway, IGA, Foodland and Lawtons Drugs.

“Empire will continue to support customers in Western Canada who prefer to shop online through its third-party partnerships,” the company said when it announced the closure on Jan. 28.

Customers in Ontario and Quebec will continue to be served by Voilà and its customer fulfilment centres in the greater Toronto and Montreal areas. The retailer said these operations are growing steadily.

The e-commerce platforms generated a combined sales increase of 10.3 per cent in the third quarter from the same time last year.

Empire reported an overall sales increase of 2.1 per cent to $7.89 billion. Food sales were up three per cent, with a two per cent increase in same-store sales.

It said gross profit for the quarter increased by 2.3 per cent, primarily driven by higher food sales and strong performance in its full-service and discount banners.

Earnings before interest, taxes, depreciation and amortization (EBITDA) dropped to a loss of $144 million from earnings of $564 million a year ago, mainly as a result of the e-commerce impairment and an increase in selling and administrative expenses. Adjusted EBITDA was $602 million, up from $564 million in the prior year.

• Email: dpaglinawan@postmedia.com

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