This article first appeared on GuruFocus .
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Adjusted EPS Growth:8.7% for the year, with Q4 adjusted EPS of $0.94, up 27% year-over-year.
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Core EPS Growth:11.9% for fiscal '26.
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Food Sales Growth:2.1% with same-store sales up 1.4%.
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Two-Year Same-Store Sales Stack:5.3% in Q4.
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Gross Margin Expansion:14 basis points for fiscal '26, within the target range of 10 to 20 basis points annually.
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SG&A Improvement:31 basis points improvement in Q4, excluding depreciation and amortization.
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Effective Tax Rate:Approximately 19.3% in Q4, lower than the previous year's 25.2%.
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Free Cash Flow Before CapEx:Approximately $1.3 billion.
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Capital Expenditure (CapEx) for Fiscal '27:Approximately $850 million.
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Dividend Increase:10.2% increase in quarterly dividend per share.
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New Store Openings:More than 20 stores planned in fiscal '27, with over 70 new stores in the next three years.
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Real Estate Projects in Q4:24 projects completed, including five new store openings.
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Other Income and Share of Earnings from Equity Investments:$49 million in Q4, $129 million for the full year.
Release Date: June 18, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Empire Co Ltd ( EMLAF ) reported an adjusted EPS growth of 8.7% for fiscal '26, aligning with their long-term financial framework.
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The company achieved a 27% year-over-year increase in adjusted EPS for Q4, driven by strong top-line growth and operating leverage.
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Empire Co Ltd ( EMLAF ) plans to accelerate new store openings, with over 20 stores planned for fiscal '27 and more than 70 new stores over the next three years.
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The company announced a 10.2% increase in its dividend, marking the 31st consecutive year of dividend growth.
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Empire Co Ltd ( EMLAF ) is focusing on strategic growth areas such as discount, pharmacy, e-commerce, and retail media, with plans to expand its discount banner into new regions.
Negative Points
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The company's gross margin was negatively impacted by higher wholesale contributions and increased supply chain costs, including fuel prices.
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Empire Co Ltd ( EMLAF ) experienced slower e-commerce growth compared to peers, partly due to the closure of its Calgary CFC.
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The company faces ongoing cost increase requests from suppliers, although it is pushing back on fuel-related surcharges.
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Empire Co Ltd ( EMLAF ) reported a lower dependence on real estate-related income, which could impact overall earnings growth.
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The company anticipates a decline in contribution from other income and share of earnings from equity investments in fiscal '27.
Q & A Highlights
Q: What is the strategic rationale behind the Amirand acquisition? A: Pierre St-Laurent, President and CEO, explained that Amirand is a well-known brand in Quebec, and the acquisition provides Empire with an entry into the discount and wholesale market with minimal risk. The acquisition cost was affordable, and the company sees significant growth potential with minimal network cannibalization. The integration plan is already underway, and the acquisition is expected to be accretive from day one.
Q: How does Empire plan to grow its pharmacy business, and will it be through organic growth or acquisitions? A: Pierre St-Laurent stated that Empire has over 400 pharmacies and sees significant growth potential. The focus will be on optimizing the existing network, adding pharmacies to new stores, and considering small acquisitions if strategically beneficial. The company aims to leverage past investments in central fill capabilities to improve productivity and service.
Q: Can you provide insights into consumer buying behavior during the quarter, especially with rising fuel prices? A: Luc L'Archeveque, Chief Customer Officer, noted that consumer behavior remained stable with no significant changes. Basket size increased, trips remained stable, and inflation was below CPI. There were no significant cost increase requests from suppliers, and Empire is not accepting fuel-related surcharges due to their volatility.
Q: How is Empire addressing the slower e-commerce growth compared to peers, and what impact did the closure of the Calgary CFC have? A: Constantine Pefanis, CFO, acknowledged that the closure of the Calgary CFC impacted e-commerce growth, but the rollout of DoorDash is expected to offset this. Empire is focusing on improving e-commerce economics and has plans to drive growth through partnerships and initiatives.
Q: What are Empire's priorities for new store openings, and how does this align with their strategic goals? A: Pierre St-Laurent highlighted that Empire plans to open more than 20 new stores in fiscal '27, with over 75% being discount stores. The focus is on disciplined capital allocation and capturing growth opportunities in white spaces without cannibalizing the existing network. The mix of new stores will remain consistent over the next few years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
