Empire Co Cl A Nv (($TSE:EMP.A)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Empire Co Cl A Nv’s recent earnings call painted a picture of robust financial health and strategic growth. The general sentiment was positive, with the company showcasing strong earnings per share (EPS) growth and effective management of inflation and capital allocation. However, there were concerns about increased selling, general, and administrative (SG&A) expenses due to non-cash compensation costs.
Strong EPS Growth
Empire delivered an impressive EPS of $0.74 in the fourth quarter, marking a 17.5% year-over-year growth. The adjusted EPS also saw an annual increase of 8.8%, aligning well with the company’s long-term growth framework of 8% to 11%.
Same-Store Sales Growth
The company reported a notable same-store sales growth of 3.8%, continuing its streak of sequential growth for the fourth consecutive quarter. This reflects the company’s ability to attract and retain customers effectively.
Market Share Gains
Empire gained market share as customer behavior trends showed a preference for Canadian retailers over their U.S. counterparts. This shift has been advantageous for Empire, contributing to its growth.
Dividend Increase
Empire announced a 10% increase in its quarterly dividend per share, marking the 30th consecutive year of dividend growth. This move underscores the company’s commitment to returning value to its shareholders.
Canadian Product Preference
The company’s emphasis on Canadian products has resonated well with customers, leading to increased sales in this category. This strategic focus has bolstered Empire’s market position.
Increased SG&A Expenses
SG&A expenses saw an uptick due to higher share-based compensation expenses, largely driven by an increase in share price. This had a notable impact on EPS, reducing it by $0.15.
High Non-Cash Compensation Costs
Empire experienced a significant rise in total compensation expenses, amounting to $49 million more than the previous year. This increase was primarily due to non-cash accounting related to stock price growth.
Forward-Looking Guidance
Looking ahead, Empire has set ambitious goals. The company plans to invest $850 million in capital expenditure, focusing on expanding its store network with 24 new stores projected for fiscal 2026. Additionally, Empire has renewed its NCIB to repurchase up to 11.5 million shares in fiscal 2026, indicating a strong commitment to enhancing shareholder value.
In conclusion, Empire Co Cl A Nv’s earnings call highlighted a period of strong financial performance and strategic growth. While the company effectively managed inflation and capital allocation, the increase in SG&A expenses due to non-cash compensation costs remains a concern. Overall, Empire’s forward-looking strategies and consistent dividend growth reflect a positive outlook for the future.