Sobeys' parent Empire reports earnings estimate miss on costs of cyberattack

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Sobeys\u0027 parent Empire Co. said in it latest earnings report a cyberattack late last year cost the grocery chain $54 million. Read on.

The November attack forced Empire to spend millions on fees for lawyers and professional services, software and hardware upgrades and lost inventory. The company said it brought in “leading cyber defence firms” to help its in-house security teams solve the problem.

But the grocery chain suggested it could recover more money from insurance in the coming quarters, further dampening the final cost of the attack. “Empire estimates, based on available information, that the final impact on net earnings over fiscal 2023 and fiscal 2024 will be approximately $32.0 million, net of estimated insurance recoveries,” the company said.Empire booked profits of $125.7 million, or 49 cents per share, on sales of $7.5 billion in the quarter ended Feb. 4. On an adjusted basis, net earnings were $164.

Adjusted earnings per share of 64 cents missed forecasts of 71 cents. RBC analyst Irene Nattel said Empire had an “extremely noisy quarter,” with a “negative impact on revenues of event as operations were severely disrupted” by the cybersecurity woes. But the results were roughly in line with forecasts excluding the six-cent drag from the attack, Nattel wrote in a note to investors.

 

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