Empire Q1 Earnings Call Highlights

• Food sales rose 1.7% with same-store sales up 1.2%, while e-commerce sales increased 11.3% year-over-year; EBITDA margin improved 28 basis points to 8.4%, the strongest performance since Project Horizon began over a decade ago
• Empire increased its fiscal 2027 store opening target from more than 20 to more than 25 stores, including four Mayrand locations acquired in June, contributing approximately 2% square-footage growth
• Management reported minimal tariff impact from Canada-U.S. trade tensions, with fewer affected categories than prior disruptions, and stated the company would not accept tariff-related cost increases while working with suppliers to find alternatives

Empire Q1 Fiscal 2027 Earnings Summary

Key Financial Performance

Empire Company Limited (TSE: EMP.A) reported record Q1 fiscal 2027 results, with EBITDA increasing 6.1% year-over-year to C$712 million and EBITDA margin expanding 28 basis points to 8.4%—the company's strongest EBITDA performance since Project Horizon began over a decade ago.

Sales and Revenue Metrics

• Food sales rose 1.7%; same-store sales increased 1.2%
• E-commerce sales jumped 11.3% year-over-year
• Company gained market share during the quarter
• Gross margin excluding fuel remained flat versus prior year
• SG&A rate improved 80 basis points (excluding depreciation and amortization)

Strategic Outlook

Management maintained guidance for adjusted EPS growth at the high end of its long-term 8-11% framework for fiscal 2027. The company targets annual gross-margin expansion of 10-20 basis points excluding fuel.

Growth Initiatives

Empire raised its fiscal 2027 store opening target to over 25 locations (from 20+), including four new stores opened in Q1 and four Mayrand stores acquired in June. Expected square footage growth: approximately 2%, with 1.5% net increase before Mayrand additions. Capital expenditures forecast at C$850 million, with roughly half allocated to renovations and new stores.

Market Conditions

Management noted stable promotional intensity and consistent consumer behavior focused on value-seeking. Trade tensions have had minimal impact, with fewer affected categories than prior disruptions. The company repurchased approximately 2 million shares and sold its Genstar equity stake for C$71 million to fund growth investments.

Empire operates Canada's Sobeys grocery chain with ~C$32 billion in annual sales and 130,000 employees.