Empire Co Cl A Nv (($TSE:EMP.A)) has held its Q1 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 generally positive picture, highlighting strong EPS growth and improvements in gross margin. Despite some challenges, such as softer same-store sales and increased SG&A costs, the overall sentiment was optimistic, with the positive aspects outweighing the negatives.
Solid Start to Fiscal 2026
Empire reported an impressive start to Fiscal 2026 with an adjusted EPS of $0.91 for Q1, marking a 14.3% year-over-year growth in core operations. This solid performance underscores the company’s effective strategies and robust operational execution.
Gross Margin Improvement
The company achieved a significant improvement in its gross margin, excluding fuel, which increased by 63 basis points compared to the previous year. This was driven by disciplined execution and targeted efficiencies, showcasing Empire’s ability to optimize its operations effectively.
Expansion Plans
Empire is set to expand its footprint by opening about 20 new stores this year, aiming for a 1.5% increase in square footage. This expansion strategy focuses on filling gaps in their network, indicating a strategic approach to growth.
Data and Analytics Advancements
Empire has made notable advancements in data and analytics, enhancing inventory data granularity. This progress has contributed to improved execution and efficiency, reflecting the company’s commitment to leveraging technology for operational excellence.
Softer Same-Store Sales
Same-store sales growth was recorded at 1.9%, impacted by the absence of several nonrecurring benefits from the previous year and unseasonable weather. This indicates some challenges in maintaining consistent sales growth.
Higher SG&A Costs
The company experienced a 4.7% increase in SG&A costs, excluding depreciation and amortization. This rise was primarily due to increased labor costs and higher expenses related to incentive programs, highlighting areas where cost control remains a challenge.
Forward-Looking Guidance
Empire provided comprehensive guidance for the upcoming periods, maintaining its real estate-related income guidance at the lower end of the $120 million to $140 million range. The company is also focused on a key technology initiative, migrating its legacy ERP system to enhance financial reporting and supply chain operations, with implementation set to continue over the next two fiscal years. Additionally, Empire plans to open about 20 new stores this fiscal year, expanding its square footage by approximately 1.5% with a disciplined approach to growth.
In summary, Empire Co Cl A Nv’s earnings call reflected a positive outlook with strong EPS growth and improvements in gross margin, despite some challenges like softer same-store sales and higher SG&A costs. The company’s strategic initiatives, including expansion plans and advancements in data analytics, position it well for future growth.