Empire Co Cl A NV (EMP.A) AI Stock Analysis

• Market Cap: C$12.82B
• Dividend Yield: 1.45%
• Average Volume (3M): 394.76K
• Price to Earnings (P/E): 18.8
• Beta (1Y): 0.29
• Revenue Growth: 1.05%
• EPS Growth: -6.94%
• Country: CA
• Employees: 128,000
• Sector: Consumer Defensive
• Sector Strength: 55
• Industry: Grocery Stores
• EPS (TTM): 0.74
• Shares Outstanding: 133,899,100
• 10 Day Avg. Volume: 392,714
• 30 Day Avg. Volume: 394,757
• PEG Ratio: -2.42
• Price to Book (P/B): 1.81
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.13
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$59.00
• Price Target Upside: 5.73% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 79 Outperform
• Price Target: ―

Empire Co Cl A NV demonstrates strong financial health with consistent revenue growth and effective cash flow management. Technical indicators suggest positive momentum, although caution is advised due to potential overbought conditions. The company is fairly valued with a steady dividend yield. Recent earnings call and corporate events point to a well-managed company prepared for future challenges, though economic uncertainties remain a concern.

Positive Factors

Earnings

The company plans to open 24 new store locations, which is expected to contribute to sales growth.

Financial Performance

Empire Co Cl A Nv is expected to report a fourth consecutive quarter of improving same-store sales.

Stock Valuation

Empire Co Cl A Nv continues to trade at a discount compared to Loblaw and Metro, offering potential value for investors.

Negative Factors

Market Trends

There is concern that the 'Buy Canadian' trend may be subsiding, which could affect future sales.

Operating Expenses

Operating expenses, specifically SG&A, are anticipated to grow year-over-year due to increased stock-based compensation.

Sales Growth

There is hesitation to assume further sequential acceleration in same-store sales due to lapping stronger comparisons.

Empire Co Cl A NV Business Overview & Revenue Model

Company Description

Empire Company Limited, together with its subsidiaries, engages in the food retail and related real estate businesses in Canada. It operates through two segments, Food Retailing, and Investments and Other Operations. The company owns, affiliates, and franchises approximately 1,600 retail stores under various retail banners, including Sobeys, Safeway, IGA, Foodland, FreshCo, Thrifty Foods, Farm Boy, Longo's, and Lawtons Drugs; and approximately 350 retail fuel locations, as well as operates grocery e-commerce stores under the banners, such as Voilà, Grocery Gateway, IGA.net, and ThriftyFoods.com. It also owns interest in the Crombie Real Estate Investment Trust, an open-ended real estate investment trust to own, operate, and develop a portfolio of grocery and pharmacy-anchored shopping centers, freestanding stores, and mixed-use developments; and various equity accounted interests in Genstar partnerships that develop residential real estate properties in Ontario, Western Canada, and the United States. The company was founded in 1907 and is headquartered in Stellarton, Canada.

How the Company Makes Money

Empire Company Limited makes money primarily through its grocery retail operations, which generate revenue from the sale of food, pharmacy products, and other consumer goods. The company benefits from a diverse portfolio of store banners catering to different market segments, enabling it to capture a wide customer base. Additionally, Empire's real estate investments provide steady rental income and capital appreciation potential. The company's strategic partnerships, such as those with suppliers and technology providers, enhance its supply chain efficiency and customer experience, further contributing to its earnings. Empire also generates revenue through its pharmacy operations, offering prescription and non-prescription health products.

Empire Co Cl A NV Financial Statement Overview

Summary

Empire Co Cl A NV maintains a strong financial position with steady revenue growth and profitability. The company demonstrates effective debt management and strong cash flow generation. However, there are slight dips in EBIT and net income, indicating a need for improved operational efficiencies.

Income Statement

Empire Co Cl A NV shows a solid financial position with consistent revenue growth, evident from a 1.04% increase in TTM revenue compared to the previous year. The gross profit margin is stable at approximately 26.67%, and the net profit margin stands at a healthy 2.18%. However, there is a slight dip in EBIT and net income compared to the previous year, indicating a need to manage operational efficiencies to maintain profitability.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 1.4, reflecting a balanced approach to leverage. Return on equity is commendable at 12.58%, showcasing effective use of shareholder equity. The equity ratio of 32.09% indicates a stable equity base, but the company should monitor its debt levels closely to ensure long-term financial health.

Cash Flow

Empire Co Cl A NV demonstrates robust cash flow management with a high operating cash flow to net income ratio of 2.96, indicating strong cash generation from operations. The free cash flow has decreased by 12.22% in TTM, suggesting a need to control capital expenditures to preserve cash. The free cash flow to net income ratio remains strong at 1.66, highlighting effective cash utilization.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	31.05B	30.73B	30.48B	30.16B	28.27B	26.59B
Gross Profit	8.28B	8.07B	7.79B	7.66B	7.20B	6.63B
EBITDA	2.39B	2.40B	2.28B	2.35B	2.17B	1.92B
Net Income	676.20M	725.20M	686.00M	745.80M	701.50M	583.50M
Balance Sheet
Total Assets	16.75B	16.79B	16.48B	16.59B	15.17B	14.63B
Cash, Cash Equivalents and Short-Term Investments	190.70M	259.60M	221.30M	812.30M	890.50M	1.01B
Total Debt	7.55B	7.36B	7.27B	7.46B	7.13B	6.94B
Total Liabilities	11.24B	11.32B	11.15B	11.46B	10.68B	10.62B
Stockholders Equity	5.38B	5.34B	5.20B	4.99B	4.37B	3.92B
Cash Flow
Free Cash Flow	1.12B	1.28B	847.60M	1.33B	1.20B	1.47B
Operating Cash Flow	2.00B	2.07B	1.61B	2.11B	1.86B	2.09B
Investing Cash Flow	-696.90M	-608.50M	-684.70M	-891.40M	-502.30M	-376.30M
Financing Cash Flow	-1.36B	-1.43B	-1.51B	-1.29B	-1.48B	-1.26B

Empire Co Cl A NV Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 55.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:EMP.A, the sentiment is Positive. The current price of 55.8 is above the 20-day moving average (MA) of 53.93, above the 50-day MA of 52.28, and above the 200-day MA of 45.27, indicating a bullish trend. The MACD of 1.22 indicates Negative momentum. The RSI at 62.95 is Neutral, neither overbought nor oversold. The STOCH value of 50.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:EMP.A.

Empire Co Cl A NV Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EMP.A	79 Outperform	C$12.82B	18.77	13.02%	1.45%	1.05%	-6.94%
Sector *	68 Neutral	¥197.78B	21.08	8.29%	2.34%	4.99%	3.05%
LBLCF		$48.38B	30.97	20.10%	1.01%	―	―
MRU	80 Outperform	C$22.63B	23.16	14.26%	1.43%	2.31%	4.45%
WN	76 Outperform	C$34.23B	30.02	19.58%	1.34%	2.36%	-6.97%
NWC	72 Outperform	C$2.30B	16.70	18.85%	3.36%	4.19%	2.56%
SAP	60 Neutral	C$11.43B	42.30	-2.51%	2.78%	9.20%	-147.37%

Empire Co Cl A NV Corporate Events

Empire CEO Michael Medline to Retire in 2026

Empire Company Limited announced that Michael Medline, its President and CEO, will retire in May 2026. Medline’s leadership since 2017 has been pivotal in transforming Empire into a top performer on the TSX, with significant growth in earnings and share price. Under his guidance, the company has implemented strategic changes, expanded its market presence, and invested in e-commerce and loyalty programs. Medline’s focus on Environmental, Social, and Governance practices has also fostered a diverse and sustainable work environment, benefiting Canadian communities.

Empire Company Limited Announces CFO Transition

Empire Company Limited has announced the retirement of its CFO, Matt Reindel, effective in May, with Constantine (Costa) Pefanis set to take over the role. Pefanis brings extensive experience in capital and public markets, having previously served as CFO at Green Infrastructure Partners and Leon’s Furniture Limited. This leadership transition is expected to support Empire’s continued growth and operational success, following Reindel’s significant contributions during challenging economic conditions.

Empire Company Limited Reports Strong Q3 Results with Strategic Investments in Store Network

Empire Company Limited reported a 3.1% increase in sales for the third quarter of fiscal 2025, with earnings per share rising to $0.62 from $0.54 in the previous year. The company continues to prioritize enhancing its data capabilities and customer understanding, aiming for long-term growth in adjusted EPS through net earnings growth and share repurchases. Empire is also investing significantly in its store network, with plans to renovate 20% to 25% of its stores by fiscal 2026, focusing on sustainability and energy efficiency.