Empire Reports Fourth Quarter and Fiscal 2024 Results

· Earnings per share (“EPS”) of $0.61 and adjusted EPS(1) of $0.63

· Prior year EPS and adjusted EPS of $0.72

· Same-store sales, excluding fuel, increased by 0.2%

· Gross margin, excluding fuel, increased by 68 basis points

· Accelerating Voilà’s path to profitability, including pausing the timing of the fourth CFC

· Repurchased $400 million of shares in fiscal 2024

· Capital allocation outlook for fiscal 2025:

· Declared a dividend increase of 9.6%

· Renewed NCIB with the intention to repurchase approximately $400 million of shares

· Capital investment program expected to be approximately $700 million

STELLARTON, NS, June 20, 2024 /CNW/ – Empire Company Limited (“Empire” or the “Company”) (TSX: EMP.A) today announced its financial results for the fourth quarter and full year ended May 4, 2024. For the quarter, the Company recorded net earnings of $148.9 million ($0.61 per share) compared to $182.9 million ($0.72 per share) last year. For the quarter, the Company recorded adjusted net earnings of $154.0 million ($0.63 per share) compared to $184.9 million ($0.72 per share) last year.

“I am pleased with the way our team is executing our strategy despite the currently inhospitable economic backdrop,” said Michael Medline, President & CEO, Empire. “Our results this quarter clearly demonstrate that we have become a disciplined, efficient grocer with strong gross margin control as well as capital and SG&A discipline, propelled by our productivity initiatives and restructuring. When you remove our real estate related income, quarterly results were consistent with the prior year. We are committed to driving profits, including taking proactive steps to improve the bottom-line results of Voilà. At the same time, we remain committed to returning capital to our investors.

“We remain very optimistic about our Voilà business today as reflected in its strong Q4 same-store sales growth of 17.3% and are confident and committed in its future success,” Mr. Medline stated. “We continue to look at every opportunity to improve our overall profitability and each Voilà CFC takes time to become profitable; as a result, we will pause the opening of our fourth customer fulfillment centre in Vancouver, allowing us to focus on driving performance and volume in our three active CFCs. We are also working with our partner, Ocado, to decrease costs and provide increased flexibility to serve our customers more broadly, which includes ending our mutual exclusivity agreement.”

Dividend Declaration

The Company declared a quarterly dividend of $0.20 per share on both Non-Voting Class A shares (“Class A shares”) and Class B common shares, that will be payable on July 31, 2024 to shareholders of record on July 15, 2024. This reflects an increase in the annualized dividend rate of 9.6%. These dividends are eligible dividends as defined for the purposes of the Income Tax Act (Canada) and applicable provincial legislation.

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 store expansion in discount. The Own Brands program enhancement will remain a priority through increased distribution, shelf placement and product innovation.

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.