Empire Q1: EPS In Line, Revenue Light, Stock Gives Up an Early Pop
Empire Company (TSX: EMP.A) earned $1.04 per diluted share in the first quarter of fiscal 2027, a fraction above the $1.0383 average of six analysts polled by Yahoo Finance, on sales of $8,475 million against an $8,540 million consensus. That combination, earnings in line and revenue about 0.8% light, is laid out in Empire’s first-quarter report. The stock took the whole session to decide what it thought: EMP.A opened 1.6% higher, touched a 3.0% gain, then closed down 3.13%.
The delta
| Metric | Actual (company report) | Consensus (Yahoo Finance) | Verdict |
|---|---|---|---|
| Adjusted EPS | $1.04 | $1.0383 average, range $1.03 to $1.05, 6 analysts | In line, a fraction above |
| Reported diluted EPS | $1.04 (from $0.91) | Equal to adjusted this quarter | Up 14.3% year over year |
| Sales | $8,475 million | $8,540 million | Miss, about 0.8% below |
| Guidance | No EPS or revenue guidance | n/a | n/a |
Two of those rows carry the same number, and the reason is worth stating. Empire writes that “there were no adjusting items in the first quarter of fiscal 2027 or in the first quarter of fiscal 2026. Accordingly, the amounts of adjusted operating income, adjusted EBITDA and adjusted net earnings were equal to their respective closest IFRS reported amounts for both quarters.” There is no gap between headline and underlying earnings to argue about this time. Our Empire earnings preview covered the beat/miss record going in, and this print landed exactly where the estimates already sat.
What happened in the quarter
Sales of $8,475 million for the 13 weeks ended Aug 1, 2026 were 2.6% above the $8,258 million of the comparable quarter a year earlier, and the composition matters more than the total. Food sales of $7,922 million grew 1.7%, while fuel sales of $553 million jumped 18.4%, an increase Empire attributes primarily to higher fuel prices. Fuel is 6.5% of total sales and is doing a disproportionate share of the growth.
Empire revenue by quarter, CAD millions, as reported. Source: Q1 F2027 Quarterly Report, p.14.
The same fuel effect runs through same-store sales. The total rose 2.2%, up from 0.8% a year ago, which looks like clean acceleration until the components are separated. Food same-store sales grew 1.2%, down from 1.9%. Fuel same-store sales rose 18.9% against a 13.4% decline. The headline improved because a small, price-driven line swung by more than 30 points while the part of the business that carries the company slowed.
Below the sales line the quarter reads better. Gross profit of $2,269 million rose 1.5%, and gross margin fell to 26.8% from 27.1%, a decline Empire attributes primarily to the mix impact of higher fuel sales. Excluding that mix effect, the company says gross margin was consistent with the prior year. Operating income of $411 million was up 7.6% from $382 million, EBITDA of $712 million up 6.1% from $671 million, and the EBITDA margin widened 30 basis points to 8.4%. Net earnings attributable to owners reached $233 million, up 9.9% from $212 million, at an effective tax rate of 26.1% against 26.0%. Cash from operating activities of $614 million was well ahead of last year’s $426 million, with accrual capital spending at $220 million against $138 million.
Empire diluted EPS by quarter, reported vs adjusted. The Q3 F2026 gap is the $746M pre-tax e-commerce impairment (reported -$1.68 vs adjusted $0.72). Source: Q1 F2027 Quarterly Report, p.14.
E-commerce sales, covering Voila including curbside, IGA.net and ThriftyFoods.com plus the Instacart, Uber Eats and DoorDash partnerships, grew 11.3%, primarily driven by third-party partnership sales growth.
Segments: food retailing carried it
Food retailing produced all $8,475 million of sales, operating income of $403 million against $369 million (up 9.2%), EBITDA of $704 million (up 7.0%) and segment net earnings of $231 million (up 12.7%). Empire’s stated driver is “higher sales and gross profit and lower selling and administrative expenses, partially offset by an increase in depreciation and amortization.”
Investments and other operations went the other way, at $8 million of operating income against $13 million. Crombie REIT contributed $12 million against $15 million, real estate partnerships $5 million against $2 million, and other items net of corporate expenses swung to negative $9 million from negative $4 million. Empire attributes the decline “primarily as a result of the Company’s investment in Scene+, driven by elevated costs from an increased level of member participation and loyalty program point redemptions.” The 41.5% equity-accounted interest in Crombie makes Empire part landlord as well as grocer, and Crombie sits among the Canadian REIT stocks we cover.
Pierre St-Laurent, President and Chief Executive Officer, said in the report: “We delivered a strong first quarter, driven by disciplined execution across the business and progress against our strategic priorities. Our banners are competing effectively across the country, and our results reflect the strength of our operations, increasing productivity and efficiency, and our continued focus on delivering value for Canadians.”
What sits inside the clean $1.04
Because nothing was adjusted out, several one-off items are inside the reported number. Empire completed a pension group annuity buy-out during the quarter, derecognizing $357 million of pension assets and liabilities at a premium of $335 million and booking a pre-tax settlement gain of $22 million. The buy-out was initiated in Q4 fiscal 2026 and removed 80% of the defined benefit funded liability for that plan. Empire also sold an interest in an equity-accounted real estate partnership for $71 million of cash proceeds, recording a $4 million gain in other income.
Selling and administrative expenses fell for three stated reasons: lower incentive-program expenses and accruals, elevated last year by share price appreciation and vesting, the pension annuity gain, and lower e-commerce expenses after the Calgary customer fulfilment centre closed at the end of Q3 fiscal 2026. The operating improvement in food retailing is real, and none of these items was treated as adjusting. The year-over-year earnings comparison is still helped by things that do not repeat on a quarterly schedule.
The gap between 9.9% earnings growth and 14.3% EPS growth is arithmetic of a different kind. Diluted weighted average shares fell 3.6% to 224.9 million from 233.4 million, so the buyback is quietly supplying roughly four and a half points of the per-share growth.
Empire diluted weighted average shares outstanding, millions: 266.2 in FY2022 to 230.4 in FY2026. Source: Empire annual MD&As (FY2026 and FY2024 filings).
Dividend and store moves
The quarterly dividend was $0.2425 per share against $0.2200, up 10.2%, the first full quarter at the rate announced with the Q4 fiscal 2026 results. Common dividends paid in the quarter totalled $55 million against $50 million. On the company’s published fiscal 2027 schedule, the next payment date is Oct 30, 2026, with an Oct 15, 2026 record date.
Empire dividends per share by fiscal year: $0.60 in FY2022 to $0.88 in FY2026. Source: Empire annual MD&As (FY2026 and FY2024 filings).
The Mayrand Food Group acquisition of four large-format Quebec locations closed during the quarter. After quarter-end, Empire agreed to acquire nine Morelli’s pharmacies operating within Longo’s stores, expected to close in Q2 fiscal 2027 subject to conditions. FreshCo opened its first two Atlantic Canada stores on Aug 20, 2026, with 13 more planned across Western Canada, Ontario and Atlantic Canada in fiscal 2027.
What Empire says is coming
Empire gives no EPS or revenue guidance, so its forward statements are operational. The e-commerce review is expected to improve annualized operating income by approximately $95 million, an improvement that began in Q4 fiscal 2026, continued in Q1 fiscal 2027 and, in the company’s words, “will continue into fiscal 2027 and beyond.” Fiscal 2027 capital spending is expected at approximately $850 million: about half to renovations and new stores, supporting roughly 1.5% store footprint growth, about 25% to IT and business development, and the remainder largely logistics and sustainability. Empire plans to renovate 20% to 25% of the store network between fiscal 2027 and fiscal 2029.
One forward item points down. Empire expects other income plus equity earnings of $90 million to $110 million in fiscal 2027, against $129 million in fiscal 2026. On prices, the company says internal food inflation “continued to be below the Consumer Price Index for food purchased from stores”, largely in line with Q4 fiscal 2026.
The record, and the session
Over the eight quarters before this one, Empire posted seven beats and one miss against consensus at an average surprise of +3.77%, on Yahoo-derived data. The average next-session move across those reports was +0.29%, higher only four times in eight, averaging +1.65% after a beat and -9.19% after the single miss. This print is neither a beat nor a miss on earnings, so that record is context rather than a guide.
The session itself: EMP.A opened at $48.65, up 1.6% from the $47.87 prior close, reached $49.30 for a 3.0% gain, then faded to a $45.39 low and a $46.37 close, down 3.13% on 703,694 shares, inside a 52-week range of $43.81 to $52.64. The TSX fell 1.11% the same day, alongside hot US PPI data, oil above $100 USD and rate-sensitive selling, so Empire trailed the index by roughly two points on its report day. Four facts sit side by side: earnings exactly at consensus, revenue slightly under, food same-store sales slower than a year ago, and a weak tape. A share price moves on the distance between results and expectations rather than on results alone, and those mechanics are set out in our guide to what moves a stock price.
For holders, the quarter splits cleanly. Operating income, EBITDA margin, cash from operations, the dividend and the share count all moved in the shareholder’s favour, with no adjusting items to argue over. Against that, food same-store sales slowed to 1.2%, the total same-store figure is flattered by fuel prices, the earnings comparison includes a pension settlement gain and a disposal gain, and the company’s own fiscal 2027 range for other income plus equity earnings sits below what fiscal 2026 delivered. Which half matters more turns on whether food same-store sales reaccelerate and whether the $95 million e-commerce improvement keeps showing up in the expense line.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. Company figures from Empire’s Q1 fiscal 2027 Quarterly Report and Consolidated MD&A (released 2026-09-10, empireco.ca); consensus and share prices from Yahoo Finance as of the September 10, 2026 close.
