Empire Reports Fourth Quarter and Fiscal 2025 Results
Earnings per share ("EPS") and adjusted EPS(1)(2) of $0.74
Prior year EPS and adjusted EPS of $0.61 and $0.63, respectively
Delivered adjusted EPS growth of 8.8% in fiscal 2025; within the financial framework
Sales of $7,637 million, an increase of 3.0%
Same-store sales(2) - food(3) increased by 3.8%
Repurchased $400 million of shares in fiscal 2025
Capital allocation outlook for fiscal 2026:
Declared a dividend increase of 10.0%; 30th consecutive year of dividend increase
Renewed NCIB with the intention to repurchase up to $400 million of shares
Capital investment program expected to be approximately $850 million
STELLARTON, NS, June 19, 2025 /CNW/ - Empire Company Limited ("Empire" or the "Company") (TSX:EMP) today announced its financial results for the fourth quarter and full year ended May 3, 2025. For the quarter, the Company recorded net earnings of $173 million ($0.74 per share) compared to $149 million ($0.61 per share) last year. For the quarter, the Company recorded adjusted net earnings of $173 million ($0.74 per share) compared to $154 million ($0.63 per share) last year, an increase of 12.3% (or 17.5% per share).
"This was a very strong quarter for Empire and I am pleased with the way our team finished the year, delivering positive results across all major financial measures," said Michael Medline, President & CEO, Empire. "Our momentum continued to build throughout fiscal 2025 resulting in fourth quarter market share gains and our adjusted EPS growth of 8.8% was within our financial framework."
Dividend Declaration
The Company declared a quarterly dividend of $0.22 per share on both Non-Voting Class A shares ("Class A shares") and Class B common shares, that will be payable on July 31, 2025 to shareholders of record on July 15, 2025. This reflects an increase in the annualized dividend rate of 10.0%. These dividends are eligible dividends as defined for the purposes of the Income Tax Act (Canada) and applicable provincial legislation.
Normal Course Issuer Bid ("NCIB")
On June 18, 2025, the Company renewed its NCIB by filing a notice of intention with the Toronto Stock Exchange ("TSX") to purchase for cancellation up to 11,500,000 Class A shares representing approximately 9.6% of the public float of 120,095,524 Class A shares as of June 17, 2025, subject to regulatory approval. As of June 17, 2025, there were 133,524,593 Class A shares issued and outstanding.
The Company intends to repurchase up to $400 million of Class A shares in fiscal 2026. The purchases will be made through the facilities of the TSX and/or any alternative Canadian trading systems to the extent they are eligible. The price that Empire will pay for any shares will be the market price at the time of acquisition. The Company believes that repurchasing shares at the prevailing market prices from time to time is a worthwhile use of funds and in the best interests of Empire and its shareholders. Purchases under the renewed NCIB may commence on July 2, 2025 and shall terminate not later than July 1, 2026.
(1)
Adjusted Metrics include adjusted operating income, adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted net earnings, and adjusted EPS. The Company is excluding from its Adjusted Metrics: costs incurred to plan and implement strategies to optimize the organization and improve efficiencies and insurance recoveries related to the Cybersecurity Event (as defined below under the heading "Adjusted Impacts on Net Earnings"), both of which occurred in the fourth quarter of fiscal 2024.
(2)
See "Non-GAAP Financial Measures & Financial Metrics" section of this News Release.
(3)
Previously named, same-store sales, excluding fuel.
Based on the average daily trading volume ("ADTV") of 448,504 shares over the last six months, daily purchases will be limited to 112,126 Class A shares (25% of the ADTV of the Class A shares), other than block purchase exemptions.
Under the Company's current NCIB, that commenced on July 2, 2024, and expires on July 1, 2025, the Company received approval from the TSX to purchase up to 12,800,000 Class A shares representing approximately 9.9% of the public float of Class A shares outstanding as of June 18, 2024. As of June 17, 2025, the Company has purchased 9,882,581 shares through the facilities of the TSX and alternative Canadian trading systems, including under its automatic share purchase plan, at a weighted average price of $42.25 for a total consideration of approximately $418 million.
Shares purchased are shown in the table below:
(in millions of Canadian dollars, except per share amounts)
May 3, 2025
May 4, 2024
May 3, 2025
May 4, 2024
13 Weeks
13 Weeks
52 Weeks
52 Weeks
Number of shares
2,196,668
3,010,237
9,888,014
11,301,318
Weighted average price per share
$ 45.53
$ 33.32
$ 40.46
$ 35.40
Cash consideration paid
$ 100
$ 100
$ 400
$ 400
The Company has also renewed its automatic share purchase plan with its designated broker allowing the purchase of Class A shares for cancellation under its NCIB during trading black-out periods, subject to regulatory approval.
On June 20, 2024, the Canadian government enacted new legislation, implementing a 2.0% tax on repurchases of equity. The tax, effective January 1, 2024, applies to the net value of shares repurchased by any Canadian corporation whose shares are listed on a designated stock exchange. As a result, the Company has recognized for the quarter and fiscal year ended May 3, 2025, $3 million and $11 million respectively, as a charge to retained earnings on the Consolidated Balance Sheets for the repurchase of shares.
Company Priorities
The Company is continuing to enhance data capabilities and deepen its understanding of its customers, allowing the Company to effectively capture emerging trends. The Company aims to grow total adjusted EPS over the long-term through net earnings growth and share repurchases. The Company intends to continue improving sales, gross margin (excluding fuel) and adjusted EBITDA margin by focusing on priorities such as:
Continued Focus on Stores:
Over recent years, the Company has accelerated investments in renovations, conversions, and new stores along with store processes, communications, training, technology and tools. Investing in the store network will remain a priority, demonstrated by a sustained emphasis on renovations and continued new store expansion. The Own Brands program enhancement will remain a priority through increased distribution, product innovation and supporting Canadian suppliers.
The Company intends to invest capital in its store network and is on track with its plan to renovate approximately 20% to 25% of the network between fiscal 2024 and fiscal 2026. This capital investment includes important sustainability initiatives such as refrigeration system upgrades and other energy efficiency initiatives.
Enhanced Focus on Digital and Data:
The focus on digital and data will include continued e-commerce expansion, personalization and loyalty through Scene+ (see "Business Updates, E-Commerce" and "Business Updates, Scene+" for more information), improved space productivity and the continued improvement of promotional optimization. Space productivity will further enhance the customer experience by improving store layouts, optimizing category and product adjacencies and tailoring product assortment for each store. The advanced analytics tools built for promotional optimization will continue to be refined through the partnership between the advanced analytics team and category merchants. Enhancing digital and data capabilities will allow the Company to deliver the best personalized experiences to elevate its in-store and e-commerce experience for its customers.
Efficiency and Cost Control:
The Company has significantly improved its efficiency and cost effectiveness through sourcing efficiencies, optimizing supply chain productivity and improving systems and processes. The Company will continue to focus on driving efficiency and cost effectiveness through initiatives related to sourcing of goods not for resale, supply chain productivity and the organizational structure. The Company has implemented several cost savings initiatives in the Voilà business, including pausing the opening of its fourth Customer Fulfilment Centre ("CFC") and ending its mutual exclusivity with Ocado Group plc ("Ocado") and continues to pursue other cost saving initiatives.
SUMMARY RESULTS - FOURTH QUARTER & FISCAL YEAR
Comparative amounts have been rounded to the nearest million to conform with current year presentation
(in millions of Canadian dollars, except per share amounts)
May 3, 2025
May 4, 2024
May 3, 2025
May 4, 2024
13 Weeks
13 Weeks
$ Change
52 Weeks
52 Weeks
$ Change
Sales
$ 7,637
$ 7,412
$ 225
$ 31,277
$ 30,733
$ 544
Gross profit(1)
2,109
2,006
103
8,382
8,071
311
Operating income
313
292
21
1,289
1,311
(22)
Adjusted operating income(2)
313
298
15
1,303
1,256
47
EBITDA(1)
599
557
42
2,409
2,382
27
Adjusted EBITDA(2)
599
563
36
2,423
2,327
96
Net earnings(3)
173
149
24
700
726
(26)
Adjusted net earnings(2)(3)
173
154
19
711
681
30
Diluted earnings per share
EPS(3)
$ 0.74
$ 0.61
$ 0.13
$ 2.93
$ 2.92
$ 0.01
Adjusted EPS(2)(3)
$ 0.74
$ 0.63
$ 0.11
$ 2.98
$ 2.74
$ 0.24
Diluted weighted average number of shares outstanding (in
millions)
234.8
243.7
(8.9)
238.6
248.4
(9.8)
Dividend per share
$ 0.2000
$ 0.1825
$ 0.0175
$ 0.8000
$ 0.7300
$ 0.0700
May 3, 2025
May 4, 2024
May 3, 2025
May 4, 2024
13 Weeks
13 Weeks
52 Weeks
52 Weeks
Gross margin(1)
27.6 %
27.1 %
26.8 %
26.3 %
EBITDA margin(1)
7.8 %
7.5 %
7.7 %
7.8 %
Adjusted EBITDA margin(2)
7.8 %
7.6 %
7.7 %
7.6 %
Same-store sales(1) growth (decline)
3.0 %
(0.3) %
1.9 %
1.3 %
Same-store sales growth(1) - food(4)
3.8 %
0.2 %
2.3 %
2.0 %
Same-store sales (decline) growth(1) - fuel
(7.8) %
4.0 %
(4.2) %
(7.4) %
Effective income tax rate
25.2 %
28.4 %
25.0 %
25.8 %
(1)
See "Non-GAAP Financial Measures & Financial Metrics" section of this News Release.
(2)
See "Non-GAAP Financial Measures & Financial Metrics" section of this News Release for a description of the types of costs and recoveries included.
(3)
Attributable to owners of the Company.
(4)
Previously named, same-store sales, excluding fuel.
FINANCIAL PERFORMANCE BY SEGMENT
Food Retailing
May 3, 2025
May 4, 2024
May 3, 2025
May 4, 2024
(in millions of Canadian dollars)
13 Weeks
13 Weeks
$ Change
52 Weeks
52 Weeks
$ Change
Sales
$ 7,637
$ 7,412
$ 225
$ 31,277
$ 30,733
$ 544
Gross profit
2,109
2,006
103
8,382
8,071
311
Operating income
307
280
27
1,234
1,265
(31)
Adjusted operating income(1)
307
286
21
1,248
1,210
38
EBITDA(1)
593
546
47
2,354
2,337
17
Adjusted EBITDA(1)
593
552
41
2,368
2,282
86
Net earnings(2)
169
144
25
659
712
(53)
Adjusted net earnings(2)
169
149
20
670
668
2
(1)
See "Non-GAAP Financial Measures & Financial Metrics" section of this News Release for a reconciliation of the adjusted metrics presented in this table.
(2)
Attributable to owners of the Company.
The following table provides a breakdown of the Company's total sales for the Food retailing segment:
May 3, 2025
May 4, 2024
May 3, 2025
May 4, 2024
(in millions of Canadian dollars)
13 Weeks
13 Weeks
$ Change
52 Weeks
52 Weeks
$ Change
Food sales
$ 7,189
$ 6,928
$ 261
$ 29,338
$ 28,661
$ 677
Fuel sales
448
484
(36)
1,939
2,072
(133)
Investments and Other Operations
May 3, 2025
May 4, 2024
May 3, 2025
May 4, 2024
(in millions of Canadian dollars)
13 Weeks
13 Weeks
$ Change
52 Weeks
52 Weeks
$ Change
Crombie REIT(1)
$ 11
$ 12
$ (1)
$ 65
$ 44
$ 21
Real estate partnerships
1
4
(3)
16
13
3
Other operations, net of corporate
expenses
(6)
(5)
(1)
(26)
(11)
(15)
Operating income
$ 6
$ 11
$ (5)
$ 55
$ 46
$ 9
(1) Crombie Real Estate Investment Trust ("Crombie REIT").
Empire Company Limited Operating Results
Sales
Food sales for the quarter ended May 3, 2025 increased by 3.8% primarily driven by positive growth across the business, particularly in the Full-Service and Discount banners.
Fuel sales for the quarter ended May 3, 2025 decreased by 7.4% primarily driven by lower fuel prices due to the removal of the government carbon tax.
Food sales for the fiscal year ended May 3, 2025 increased by 2.4% primarily driven by positive growth across the business, particularly in the Full-Service and Discount banners.
Fuel sales for the fiscal year ended May 3, 2025 decreased by 6.4% driven by lower fuel prices and lower volume compared to the prior year, as well as the sale of the retail fuel sites in Western Canada ("Western Canada Fuel Sale") in the first quarter of fiscal 2024.
Gross Profit
Gross profit for the quarter ended May 3, 2025 increased by 5.1% primarily driven by higher sales, strong performance and operational discipline in the Full-Service banners and expansion in the FreshCo, Farm Boy and Voilà banners.
Gross margin for the quarter ended May 3, 2025 increased to 27.6% from 27.1% in the prior year, primarily due to the mix impact of lower fuel sales and strong performance in Full-Service banners as a result of disciplined execution in targeted efficiencies in our stores, including initiatives aimed at reducing shrink. Gross margin, excluding the mix impact of fuel, increased by 32 basis points.
Gross profit for the fiscal year ended May 3, 2025 increased by 3.9% primarily driven by higher sales, strong performance and operational discipline aimed at reducing shrink and business expansion (Farm Boy, FreshCo and Voilà).
Gross margin for the fiscal year ended May 3, 2025 increased to 26.8% from 26.3% in the prior year, primarily as a result of strong performance in Full-Service banners including several targeted initiatives aimed at closely managing shrink and inventory and improving promotional mix, lower distribution costs driven primarily by efficiency initiatives in supply chain and the mix impact of lower fuel sales. Gross margin, excluding the mix impact of fuel, increased by 43 basis points.
Operating Income
May 3, 2025
May 4, 2024
May 3, 2025
May 4, 2024
(in millions of Canadian dollars)
13 Weeks
13 Weeks
$ Change
52 Weeks
52 Weeks
$ Change
Food retailing
$ 307
$ 281
$ 26
$ 1,234
$ 1,265
$ (31)
Investments and other operations:
Crombie REIT
11
12
(1)
65
44
21
Real estate partnerships
1
4
(3)
16
13
3
Other operations, net ofcorporate expenses
(6)
(5)
(1)
(26)
(11)
(15)
6
11
(5)
55
46
9
Operating income
$ 313
$ 292
$ 21
$ 1,289
$ 1,311
$ (22)
Adjustments:
E-commerce Exclusivity(1)
-
-
-
12
-
12
Restructuring(1)
-
20
(20)
2
72
(70)
Cybersecurity Event(1)
-
(14)
14
-
(36)
36
Western Canada Fuel Sale(1)
-
-
-
-
(91)
91
-
6
(6)
14
(55)
69
Adjusted operating income(1)
$ 313
$ 298
$ 15
$ 1,303
$ 1,256
$ 47
(1)
See "Non-GAAP Financial Measures & Financial Metrics" section of this News Release for a description of the types of costs and recoveries included.
For the quarter ended May 3, 2025, operating income from the Food retailing segment increased mainly due to higher sales and gross profit, partially offset by higher selling and administrative expenses. Selling and administrative expenses increased mainly due to higher share based long-term incentive program expenses (an increase of $49 million compared to the prior year), mainly driven by the Company's significant share price appreciation and increased vesting level. Higher retail labour costs driven by wage rate increases, continued investment in business expansion (Farm Boy, FreshCo and Voilà) and an increase in depreciation and amortization also increased selling and administration expenses.
For the fiscal year ended May 3, 2025, operating income from the Food retailing segment decreased mainly due to higher selling and administration expenses in the current year, partially offset by higher sales and gross profit. Selling and administrative expenses increased due to higher share based long-term incentive program expenses (an increase of $81 million compared to the prior year), mainly driven by the Company's significant share price appreciation and increased vesting level. An increase in compensation expense primarily driven by retail labour costs, continued investment in business expansion (Farm Boy, FreshCo and Voilà), and an increase in depreciation and amortization also increased selling and administration expenses.
For the quarter ended May 3, 2025, operating income from the Investments and other operations segment slightly decreased primarily due to a decrease in property sales in real estate partnerships.
For the fiscal year ended May 3, 2025, operating income from the Investments and other operations segment increased primarily as a result of higher equity earnings from Crombie REIT, due to an increase in property sales, which was partially offset by the Company's investment in Scene+ driven by increase member participation and redemption of its loyalty program points.
EBITDA
May 3, 2025
May 4, 2024
May 3, 2025
