Empire Reports Fiscal 2026 Third Quarter Results
Executive Summary
- Empire Company reported FY‑2026 Q3 sales of C$7.89 bn, a modest 2.1% increase year‑over‑year.
- Net loss widened to C$385 m ($1.68 EPS) versus a profit of $146 m a year ago; however, adjusted net earnings rose 12.3% to C$164 m ($0.72 adjusted EPS).
- A non‑cash e‑commerce impairment of C$746 m was recorded, but the company expects annualized operating‑income benefits of ≈C$95 m beginning Q4 2026, with a portion reinvested in growth initiatives.
Key Details
- Sales & Margins
- Total sales: C$7,890 m (up 2.1%).
- Food sales up 3.0% to C$7,477 m; fuel sales down 11.4% to C$413 m.
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Gross profit: C$2,130 m (+2.3%); gross margin unchanged at 27.0%.
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Profitability
- Net (loss) earnings: C$(385) m ($1.68 EPS) vs. $146 m profit a year earlier.
- Adjusted net earnings: C$164 m ($0.72 adjusted EPS), up 12.3% YoY.
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Adjusted operating income: C$308 m (up C$20 m).
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Impairments & E‑commerce Update
- Recognized e‑commerce impairment of C$746 m (ROU, property/equipment, intangibles).
- Closure of Calgary fulfillment centre and pause on Vancouver centre; severance and decommissioning costs included.
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Expected annualized operating‑income benefit of ≈C$95 m starting Q4 2026; ~C$15 m realized in Q4 2026.
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Capital Expenditure & Cash Flow
- Capex for the quarter: C$239 m (vs. C$187 m prior year).
- Free cash flow: C$288 m (up from C$147 m YoY).
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Operating cash flow increased to C$611 m.
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Share Repurchase (NCIB)
- Up‑to‑C$400 m share buy‑back program for FY 2026.
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Q3 shares repurchased: 3.10 m at a weighted average of $48.37, cash consideration C$150 m.
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Dividend
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Board declared quarterly dividend of $0.22 per share (Class A & B), payable 30 Apr 2026 to shareholders of record 15 Apr 2026.
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Outlook & Guidance
- Capital spend forecast ≈C$850 m for FY 2026 (≈50% store renovations/expansion, 25% IT/business development).
- Anticipated e‑commerce operating‑income improvement of C$95 m annually, with one‑third reinvested in growth engines.
Notable Quotes
“We delivered a solid third quarter, with adjusted EPS growth of 16%, driven by strong Full‑Service performance and healthy results across all of our formats,” – Pierre St‑Laurent, President & CEO, Empire.