Empire Company (EMP-A) Q1 2026 earnings summary

Executive summary

• Achieved record quarterly adjusted EPS of $0.91, up 14.3% year-over-year when excluding non-core items, with core business EPS growth and no adjustments in Q1 F2026.

• Sales increased 1.5% to $8,258 million, with food sales up 2.6% and same-store food sales up 1.9%, cycling last year's one-time events and impacted by unseasonably cold May weather.

• Gross margin, excluding fuel, improved by 63 basis points to 27.1%, driven by disciplined execution, advanced analytics, and inventory management.

• E-commerce sales grew 80.9% year-over-year, with significant expansion in Voilà and digital platforms, and Scene+ loyalty program membership surpassed 15 million.

• The company is opening about 20 new stores this year, expanding square footage by 1.5% to fill network gaps and capture market share.

Financial highlights

• Adjusted EBITDA was $671 million, with a margin of 8.1%, and gross profit rose 5.1% to $2,235 million.

• Free cash flow declined to $63 million from $187 million, mainly due to working capital changes and lower asset disposal proceeds.

• Adjusted SG&A, excluding depreciation and amortization, grew by 4.7%, with a 60 basis point increase in SG&A rate, mainly due to higher labor and incentive costs.

• Other income and share of equity earnings were about CAD 25 million higher than last year.

• Effective tax rate for Q1 was 26%, up from 22.9% last year due to non-recurring items in the prior year.

Outlook and guidance

• Fiscal 2026 capital spend expected at $850 million, with half for store renovations/expansion and 25% for IT/business development.

• Aggregate pre-tax earnings from other income and investments expected at $120–$140 million for fiscal 2026.

• Effective income tax rate for fiscal 2026 expected to be 25%-27%, excluding unusual transactions.

• Q1 SG&A spend anticipated to be the peak for the fiscal year in total dollars.

• Q2 has started ahead of Q1 in same-store sales growth.