For the second quarter Empire Co. Ltd., parent company of Sobeys, Safeway, IGA, Farm Boy and FreshCo, recorded adjusted net earnings of $158 million compared to $110.4 million last year, an increase of 43.1 percent.

“Our strong second quarter fiscal 2020 results reflect both top line growth and significant gross margin expansion. This has led to industry leading year over year EBITDA margin expansion. It is a testament to our team that EPS from continuing operations exceeded 50 cents for the first time since the first quarter of fiscal 2013, while all strategic initiatives are progressing with velocity,” said Michael Medline, president and chief executive officer of Empire.

Empire is progressing through the final year of Project Sunrise. The project is on track and yielding benefits that are expected to exceed management’s initial expectations. The company realized approximately $100 million of these benefits during fiscal 2018 through organizational design, strategic sourcing cost reductions and improvements in store operations. In fiscal 2019, the company realized a further approximate $200 million of benefits, driven by initial rollouts of category resets and cost reductions in other areas.

For fiscal 2020, management expects to achieve at least $250 million of in-year benefits for a cumulative benefit of at least $550 million, an increase in its original projection for the three-year program. These in-year benefits for fiscal 2020 are expected to result from the completion of the rollout of the category reset program, as well as continued cost reductions and operational improvements.

Gross profit for the quarter ended Nov. 2 increased by 7.7 percent primarily as a result of the inclusion of Farm Boy results, category reset benefits and the increase in sales. This increase was partially offset by store closures in Western Canada.

Gross margin for the quarter increased to 24.8 percent from 23.9 percent last year. The increase was primarily a result of category reset benefits and positive margin rate contributions from the inclusion of Farm Boy results, partially offset by the effect of sales mix between banners.

In December 2017, Sobeys announced plans to expand its discount format to Western Canada and expects to convert up to 25 percent of its 255 Safeway and Sobeys full-service format stores in Western Canada to its FreshCo discount format. Two years into execution of this plan, the company is on track to open approximately 65 locations within the initial five-year time frame.