- Shares in Empire Company (EMP.A) jumped more than seven per cent today following the release of yesterday’s strong financial results
- Net earnings increased 47 per cent for the period ending August 1, 2020, from C$130.6 million in 2019 to $191.9 million
- This comes off the back of a nine per cent increase in sales, from $6.74 billion last year to $7.35 billion this year
- The company attributed this to the impact of the COVID-19 pandemic, which led to a significant spike in Canada’s food retail segment
- Empire Company (EMP.A) is currently up 6.59 per cent and is trading at $37.84 per share
Shares in Empire Company (EMP.A) jumped more than seven per cent today following the release of yesterday’s strong financial results.
The Nova Scotia-based supermarket giant, which owns Sobeys and Safeway, posted a 47 per cent increase in net earnings for the quarter ending August 1, 2020.
This represents a C$61.3 million jump from 2019’s total of $130.6 million to $191.9 million this year, and earnings per share that were “the highest in our company’s history,” according to Empire’s CEO, Michael Medline, who spruiked the results in a call with investors on Thursday.
At the centre of the improved performance was a nine per cent increase in total sales, from $6.74 billion last year to $7.35 billion this year. Empire says this is largely due to the impact of the COVID-19 pandemic, which drove a significant spike in Canada’s food retail sector.
More specifically, the company identified a trend that shows Canadian consumers are shopping less frequently but with larger basket sizes, focusing on one-stop- shop grocery outlets that meet all their household needs.
The implementation of various lockdown laws also generated strong growth in online activity, particularly in Quebec and British Columbia, resulting in a 370 per cent growth to Empire’s e-commerce operations.
“The momentum at Empire – at all levels of the company – is remarkable,” said Michael in yesterday’s financials release.
“Since fiscal 2021 started, we launched Project Horizon, our new three-year strategy for growth, Voilà by Sobeys went live in the GTA, our Farm Boy and FreshCo expansions continued, we ratified a key labour agreement in the West, launched a new national brand campaign for our Compliments private label lineup, and our debt was upgraded to investment grade,” he added.
Empire’s Project Horizon initiative forms a key pillar in its near-term operations. It focuses on core business expansion and e-commerce acceleration, targeting $500 million in annualised EBITDA and an increase of 100 basis points in the company’s EBITDA margin by 2023.
Despite the ongoing uncertainty presented by the COVID-19 pandemic, Empire anticipates that a large portion of the business diverted from restaurant and hospitality sectors will remain within Canada’s grocery segment, even with a return to work and school.
Empire Company (EMP.A) is currently up 6.59 per cent to $37.84 per share at 2:04pm EDT.