Empire Co Ltd

Latest Results (17.05.2026):

Empire Co Ltd — third quarter of fiscal 2026: The company reported Q3 sales of $7,890 million (up 2.1%) but a GAAP net loss of $385 million (EPS $(1.68)) largely driven by a $746 million e‑commerce impairment. On an adjusted basis (ex‑impairment and related items) adjusted net earnings were $164 million and adjusted EPS was $0.72 (up vs $0.62 prior year), with adjusted EBITDA of $602 million. Management expects about $95 million of annualized operating income benefits from the e‑commerce actions beginning in Q4 FY2026 and reaching run‑rate in FY2027.

Top-line and same‑store trends

Sales: $7,890M (+2.1% year-over-year). Food sales rose 3.0% (same‑store food +2.0%); overall same‑store sales +1.2%. Fuel sales declined 11.4% (same‑store fuel down ~10.9%) driven by lower fuel prices.

GAAP earnings vs adjusted

GAAP: net (loss) earnings $(385)M; diluted EPS $(1.68). Adjusted: adjusted net earnings $164M (+12.3% vs prior year) and adjusted EPS $0.72 (up $0.10). Adjusted operating income was $308M and adjusted EBITDA $602M.

E‑commerce impairment and actions

The Company recognized a $746M pre‑tax e‑commerce impairment (impact to net earnings after tax $549M), tied to winding down the Calgary CFC, closing an Edmonton support facility and pausing Vancouver CFC development. Actions include expanding third‑party delivery partnerships (DoorDash, Instacart, Uber Eats) and leveraging Toronto/Montreal CFCs.

Impairment recovery expectations

Empire expects immediate annualized operating income benefits of about $95M from the e‑commerce changes (roughly $15M to be realized in Q4 FY2026), and intends to reinvest ~one‑third of the benefit to accelerate growth initiatives.

Profitability and margins

Gross profit was $2,130M (+2.3%) with gross margin stable at 27.0%. EBITDA swung to a loss of $144M (vs $564M prior) due to the impairment and higher SG&A; adjusted EBITDA margin improved modestly to 7.6% (from 7.3%).

Cash flow, capex and buybacks

Free cash flow for the quarter was $288M (vs $147M prior year). Capital expenditures were $239M in the quarter. Under its NCIB the company repurchased 3.10M Non‑Voting Class A shares in the quarter for $150M; fiscal YTD purchases are ~6.57M shares for $330M.

Dividend and shareholder returns

The Board declared a quarterly dividend of $0.22 per share (payable April 30, 2026 to holders of record April 15, 2026). NCIB remains active with authorization up to $400M of repurchases in FY2026.

Segment and strategic highlights

Food retailing (Sobeys) drove the sales and adjusted results, with strong Full‑Service and Discount banner performance (FreshCo expansion continues). The Company is investing in data, digital (Scene+ loyalty expansion), ERP (SAP S/4HANA) and store renovations to drive medium‑term margin improvements.

Outlook and risks

FY2026 capex expected ~ $850M; Other income + share of earnings from investments expected $120–$140M. Management reiterates focus on growing adjusted EPS via net earnings growth and buybacks, while noting risks (tariffs, macro volatility) that could affect costs and results.