Empire Company (EMP-A) Q1 2027 earnings summary

Executive summary

• EPS rose 14.3% year-over-year to CAD 1.04, with net earnings up 9.9% to $233 million and record high performance reflecting disciplined execution and cost efficiency initiatives.

• Sales reached $8,475 million in Q1 F2027, up 2.6% year-over-year, with food sales rising 1.7% and same-store food sales up 1.2%.

• E-commerce sales grew 11.3% year-over-year, supported by investments in digital platforms and third-party partnerships.

• Strategic priorities remain focused on customer value, store growth, cost efficiency, and operational discipline, leveraging technology and analytics.

• Leadership strengthened with new appointments in pharmacy and technology, supporting transformation and growth.

Financial highlights

• Q1 EPS reached CAD 1.04, a 14.3% increase year-over-year, with no adjusting items in the quarter.

• EBITDA was CAD 712 million, up 6.1% year-over-year, with EBITDA margin at 8.4%, up 28-30 basis points.

• Gross margin excluding fuel remained flat year-over-year, though overall gross margin declined to 26.8% due to higher fuel sales and supply chain costs.

• SG&A rate improved by 80 basis points, driven by lower incentive expenses, pension settlement gain, and cost efficiency.

• Free cash flow was $187 million, up from $63 million in Q1 F26.

Outlook and guidance

• Expect adjusted EPS growth at the high end of the long-term financial framework (8%-11%) for fiscal 2027.

• Fiscal 2027 capital expenditures projected at approximately CAD 850 million, with half allocated to renovations and new store expansion.

• Guidance for other income and share of earnings from equity investments remains at CAD 90-110 million for fiscal 2027.

• E-commerce review expected to yield $95 million in annualized operating income improvements.

• Plans to open 13 more FreshCo stores and convert nine acquired pharmacies to Longo's Pharmacy locations in fiscal 2027.