Q1 2026 Empire Company Ltd Earnings Call Transcript
Key Points
- Empire Co Ltd (EMLAF) reported a solid start to fiscal 2026 with an EPS of $0.91, reflecting a 14.3% improvement in core business operations over the previous year.
- Sales, excluding fuel, grew by 2.6% with same-store sales growth of 1.9%, supported by continued growth in both full service and discount segments.
- Gross margin improved by 63 basis points, driven by disciplined execution, targeted efficiencies, and advanced analytics for better inventory management.
- Empire Co Ltd (EMLAF) plans to open about 20 new stores this year, aiming to grow its square footage by 1.5% and fill gaps in its network.
- The company has been successful in maintaining internal food inflation below the CPI, benefiting from strategic supplier relationships and a hard stance on tariff-related cost increases.
- Same-store sales were softer compared to previous quarters due to cycling of non-recurring benefits from last year, such as a boycott campaign against a competitor and a cyber event affecting another competitor.
- Unseasonably cold weather in May negatively impacted sales, particularly in fresh and prepared foods, as it delayed the start of the summer season.
- Higher incentive program expenses and accruals, such as LTIP and retirement arrangements, put upward pressure on SG&A, which grew by 4.7%.
- The effective tax rate for Q1 was higher at 26% compared to 22.9% last year, due to non-recurring factors from the previous year.
- Empire Co Ltd (EMLAF) faces a competitive market environment with ongoing real estate activity, requiring disciplined and precise growth strategies for new store approvals.
Good morning, ladies and gentlemen.
Welcome to Empire first-quarter 2026 conference call. (Operator Instructions) This call is being recorded on Thursday, September 11, 2025.
I would now like to turn the conference over to Katie Brine, Vice President of Investor Relations. Please go ahead.
Thank you, Ludy.
Good morning and thank you all for joining us for our first-quarter conference call. Today, we will provide summary comments on our results and then open the call for questions. This call is being recorded, and the audio recording will be available on the company's website at empireco.ca. There is a short summary document outlining the points of our quarter available on our website. Joining me on the call this morning are Michael Medline, President and Chief Executive Officer; Costa Pefanis, Chief Financial Officer; and Pierre St-Laurent, Chief Operating Officer.
Today's discussion includes forward-looking statements. We caution that such statements
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