Empire Company (EMP-A) Q1 2026 earnings summary

Executive summary

• Achieved record quarterly adjusted EPS of $0.91, up 14.3% year-over-year, with core business growth and no adjustments; net earnings rose to $212 million.

• Sales increased 1.5% to $8,258 million, with food sales up 2.6% and same-store food sales up 1.9%, despite lapping one-time events.

• Gross margin (excluding fuel) improved by 63 basis points to 27.1%, driven by operational discipline, analytics, and efficiency initiatives.

• E-commerce sales grew 80.9% year-over-year, with significant expansion in Voilà and digital platforms.

• Consumer sentiment and basket size are improving, with customers trading up in full-service and fresh categories.

Financial highlights

• Adjusted EBITDA was $671 million with an 8.1% margin, and gross profit rose 5.1% to $2,235 million.

• Free cash flow declined to $63 million from $187 million, mainly due to working capital changes.

• Capital expenditures totaled $138 million, focused on store renovations, new stores, and technology.

• Repurchased 1.5 million shares for $80 million in Q1; intends to repurchase up to $400 million in fiscal 2026.

• Dividend per share increased to $0.22 from $0.20.

Outlook and guidance

• Fiscal 2026 capital spend expected at $850 million, with half for renovations/new stores and 25% for IT/business development.

• Aggregate pre-tax earnings from other income and investments projected at $120–$140 million.

• Effective tax rate for fiscal 2026 expected between 25% and 27%.

• Q2 has started ahead of Q1 in same-store sales growth.

• Targeting long-term adjusted EPS growth of 8–11% through sales, margin, and EBITDA improvements.