Empire, which is trying to simplify its business and cut costs, reported net earnings of C$29.5 million ($22.5 million), or 11 Canadian cents per share, in the three months ended May 6, compared with a loss of C$942.6 million, or C$3.47 per share, a year earlier.

The year-earlier quarter included some charges related to goodwill and asset impairments, the company said.

Excluding items, the company earned 18 Canadian cents per share, beating the average analyst estimate of 12 Canadian cents, according to Thomson Reuters I/B/E/S.

"We are seeing positive signs with increased tonnage for the first time in 17 quarters, stabilizing margins and disciplined cost containment," Chief Executive Michael Medline said in a statement. "Having said that, we are not where we want to be and we are most certainly not out of the woods yet."

Empire also raised its quarterly dividend to C$0.42 per share from C$0.41 per share.

Total sales declined 7.7 percent to C$5.80 billion in the quarter. Sobey's same-store sales excluding fuel fell 1.6 percent.

Empire's shares were up 10.05 percent at C$21.02 in morning trading on Wednesday.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty)