Growing food delivery business and other opportunities
The company also announced that it’s pausing work on a brand new logistics center to avoid wasting costs on its Voilà grocery delivery service, amongst other changes.
“Although Voilà’s market penetration remains strong, the size and growth of the Canadian grocery e-commerce market is lower than expected, resulting in higher net income dilution than originally estimated,” Empire said in its Press releaseThe company says it is targeted on increasing the quantity and performance of its three existing centers.
Empire has also ended its mutual exclusivity agreement with technology provider Ocado early, as a part of changes it has made to scale back costs and increase flexibility. The changes “are expected to have a significant, positive impact on Voilà’s profitability in financial years 2025 and 2026,” Empire said.
The company reports earnings of $0.86 per diluted share for the 13-week period ended August 3.
The result was below the profit of $1.03 per diluted share in the identical quarter last 12 months, when profit was increased by the sale of 56 gas stations in Western Canada.
Analysts’ opinion on Empire’s quarterly results
RBC analyst Irene Nattel said Empire’s operating results were “a bit above forecasts as value-based consumer behavior stabilizes.” In a note, she said the corporate stays committed to its strategy of maximizing sales at its full-service stores despite overall momentum at discounters, but added that Empire can be expanding its discount presence. Nattel had previously said Empire is just too heavily exposed to the full-service side of the grocery sector in comparison with its peers, putting the corporate at a relative drawback amid heightened price sensitivity.
Empire Winning Highlights
Here’s a breakdown of this week’s results.
- Empire Company (EMP/TSX): Earnings per share of $0.63 (versus the forecast of $0.62). Revenue is $7.41 billion (according to forecast).
The company’s revenue for the primary quarter was $8.14 billion, up from $8.08 billion a 12 months ago. Like-for-like sales increased 0.5 percent for the quarter, while like-for-like sales excluding fuel increased 1 percent.
Medline said a 12 months and a half after launching its Scene+ loyalty program across Canada, this system has over 15 million members, with those members spending on average 55% greater than non-members. “Scene+ has significantly increased our incremental sales and margins compared to our previous loyalty program,” he said.
On an adjusted basis, Empire earned $0.90 per share in the most recent quarter, in comparison with adjusted earnings of $0.78 per diluted share in the identical quarter last 12 months. Empire shares closed up 5.6% at $40.62 on the Toronto Stock Exchange.
