Empire Company reported Q4 2026 adjusted EPS of $0.94, a 27% increase. Plans for 20 new stores and a 10.2% dividend increase highlight growth strategy.

Key Takeaways

• Adjusted EPS reached $0.94, reflecting a 27% year-over-year increase.
• Food sales increased by 2.1%, with same-store sales up 1.4%.
• Gross margin, excluding fuel, remained flat year-over-year, with a 14 basis points expansion for the fiscal year.
• The company announced a 10.2% dividend increase, marking 31 consecutive years of dividend growth.
• More than 20 new stores are planned for fiscal 2027, with 70+ new stores expected over the next three years.

Financial Performance

Empire Company reported a robust performance in its fourth quarter of fiscal 2026, driven by disciplined execution and strategic priorities. The company achieved an adjusted EPS of $0.94, marking a 27% increase compared to the previous year. This growth was largely attributed to strong food sales, which rose by 2.1%, complemented by a 1.4% increase in same-store sales. Over the fiscal year, the company's focus on strengthening its core business resulted in an impressive 11.9% growth in core EPS, despite a lower reliance on real estate-related income.

In terms of margins, the company's gross margin remained stable, with flat year-over-year performance excluding fuel costs. The overall gross margin expanded by 14 basis points for the fiscal year, aligning with the company's target range of 10 to 20 basis points annually. This disciplined approach to SG&A expenses has generated significant operating leverage, particularly in the latter half of the fiscal year.

Strategic Initiatives

Empire Company is prioritizing strategic growth and operational efficiency across its business. Following a period focused on renovations and conversions, the company is shifting towards new store openings, with over 20 new stores planned for fiscal 2027 and 70+ over the next three years. This expansion is expected to drive food sales growth beyond same-store sales growth in the coming years.

The company also noted a strategic acquisition, announcing the purchase of MERA, which will enable entry into the Quebec discount wholesale market. This acquisition is seen as a low-risk opportunity for growth, with management expressing confidence in its potential for profitability from day one.

In addition to physical store expansion, Empire Company is enhancing its operations through investments in technology and e-commerce. The partnership with DoorDash, which launched nationally in April, is aimed at boosting online sales and enhancing customer engagement.

Future Outlook

Looking ahead to fiscal 2027, management remains optimistic about the company’s growth trajectory. The company expects adjusted EPS growth to be at the high end of its long-term financial framework, projected between 8% to 11%. This growth will be supported by food sales expansion, margin improvement, and cost discipline.

Empire Company’s focus on enhancing customer value and engagement is evident as the company continues to evolve its offerings. The ongoing rollout of electronic shelf labels and improvements in in-store processes will enhance the shopping experience, thereby solidifying customer loyalty and driving sales.

Furthermore, the management is committed to maintaining a strong dividend return to shareholders, as evidenced by the recently announced 10.2% dividend increase, which underscores the company’s commitment to returning value to its investors.

Conclusion

Empire Company's Q4 2026 earnings call demonstrated a strong finish to the fiscal year, with significant growth in adjusted EPS and a clear strategy for future expansion. The company’s commitment to disciplined execution, strategic store openings, and enhancing customer value positions it well for continued success in a competitive market.

As Empire Company enters fiscal 2027, its focus on building a resilient core business, coupled with strategic investments and expansion plans, instills confidence among investors. The company appears well-positioned to navigate the challenges of the retail environment while delivering consistent, sustainable returns for its shareholders.

This analysis is based on public earnings call materials and is not investment advice.