Empire Co Cl A NV (EMP.A) AI Stock Analysis

• Market Cap: C$10.85B
• Dividend Yield: 1.69%
• Average Volume (3M): 627.99K
• Price to Earnings (P/E): 16.5
• Beta (1Y): 0.29
• Revenue Growth: 1.05%
• EPS Growth: -6.94%
• Country: CA
• Employees: 128,000
• Sector: Consumer Defensive
• Sector Strength: 94
• Industry: Grocery Stores
• EPS (TTM): 2.81
• Shares Outstanding: 135,721,120
• 10 Day Avg. Volume: 660,676
• 30 Day Avg. Volume: 627,994
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.35
• Price to Cash Flow (P/CF): 5.10
• P/FCF Ratio: 7.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$49.50
• Price Target Upside: 6.68% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Empire Co Cl A NV showcases strong financial performance with solid revenue growth and profitability. Despite some operational inefficiencies, the company's technical indicators are mixed, reflecting a balanced outlook. The stock is fairly valued with a consistent dividend. The earnings call and recent corporate events highlight strategic growth initiatives, although economic uncertainties pose challenges.

Positive Factors

Earnings Growth

There is potential for further narrowing the valuation discount if EMP can demonstrate consistent 8-11% EPS growth.

Expansion

Management indicated new store openings will double, reflecting growth with more net new FreshCo sites in Western Canada.

Negative Factors

Consumer Recovery

There remains significant uncertainty on the shape of a potential consumer recovery.

Same-Store Sales

A good part of the SSS catch-up trade may have already played out, limiting future gains from this factor.

Valuation Discount

EMP continues to trade at a wider-than-historical discount to Loblaw and MRU, despite recent improvements.

Empire Co Cl A NV Business Overview & Revenue Model

Company Description

Empire Company Limited, together with its subsidiaries, engages in the food retail and related real estate businesses in Canada. It operates through two segments, Food Retailing, and Investments and Other Operations. The company owns, affiliates, and franchises approximately 1,600 retail stores under various retail banners, including Sobeys, Safeway, IGA, Foodland, FreshCo, Thrifty Foods, Farm Boy, Longo's, and Lawtons Drugs; and approximately 350 retail fuel locations, as well as operates grocery e-commerce stores under the banners, such as Voilà, Grocery Gateway, IGA.net, and ThriftyFoods.com. It also owns interest in the Crombie Real Estate Investment Trust, an open-ended real estate investment trust to own, operate, and develop a portfolio of grocery and pharmacy-anchored shopping centers, freestanding stores, and mixed-use developments; and various equity accounted interests in Genstar partnerships that develop residential real estate properties in Ontario, Western Canada, and the United States. The company was founded in 1907 and is headquartered in Stellarton, Canada.

How the Company Makes Money

Empire Company Limited generates revenue primarily through its food retail operations, which involve the sale of groceries, food products, and related consumer goods across its various supermarket brands. The company also earns income from its real estate investments, particularly through rental income and property management services associated with its holdings in Crombie REIT. Empire's revenue streams are bolstered by strategic partnerships and initiatives aimed at enhancing supply chain efficiencies, expanding its private-label product offerings, and leveraging digital platforms for e-commerce growth. These efforts are designed to optimize sales and profitability across its retail network.

Empire Co Cl A NV Financial Statement Overview

Summary

Empire Co Cl A NV maintains a strong financial position characterized by steady revenue growth and profitability. The stable gross and net profit margins, alongside a robust return on equity, demonstrate financial health. However, the slight decline in EBIT and net income suggests a need to improve operational efficiencies.

Income Statement

Empire Co Cl A NV shows a solid financial position with consistent revenue growth, evident from a 1.04% increase in TTM revenue compared to the previous year. The gross profit margin is stable at approximately 26.67%, and the net profit margin stands at a healthy 2.18%. However, there is a slight dip in EBIT and net income compared to the previous year, indicating a need to manage operational efficiencies to maintain profitability.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 1.4, reflecting a balanced approach to leverage. Return on equity is commendable at 12.58%, showcasing effective use of shareholder equity. The equity ratio of 32.09% indicates a stable equity base, but the company should monitor its debt levels closely to ensure long-term financial health.

Cash Flow

Empire Co Cl A NV demonstrates robust cash flow management with a high operating cash flow to net income ratio of 2.96, indicating strong cash generation from operations. The free cash flow has decreased by 12.22% in TTM, suggesting a need to control capital expenditures to preserve cash. The free cash flow to net income ratio remains strong at 1.66, highlighting effective cash utilization.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
31.05B	30.73B	30.48B	30.16B	28.27B	26.59B
	Gross Profit
8.28B	8.07B	7.79B	7.66B	7.20B	6.63B
	EBIT
1.27B	1.31B	1.23B	1.36B	1.30B	1.11B
	EBITDA
2.39B	2.40B	2.28B	2.35B	2.17B	1.92B
	Net Income Common Stockholders
676.20M	725.20M	686.00M	745.80M	701.50M	583.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
190.70M	259.60M	221.30M	812.30M	890.50M	1.01B
	Total Assets
16.75B	16.79B	16.48B	16.59B	15.17B	14.63B
	Total Debt
7.55B	7.36B	7.27B	7.46B	7.13B	6.94B
	Net Debt
7.36B	7.10B	7.05B	6.65B	6.24B	5.93B
	Total Liabilities
11.24B	11.32B	11.15B	11.46B	10.68B	10.62B
	Stockholders Equity
5.38B	5.34B	5.20B	4.99B	4.37B	3.92B
Cash Flow		Free Cash Flow
1.12B	1.28B	847.60M	1.33B	1.20B	1.47B
	Operating Cash Flow
2.00B	2.07B	1.61B	2.11B	1.86B	2.09B
	Investing Cash Flow
-696.90M	-608.50M	-684.70M	-891.40M	-502.30M	-376.30M
	Financing Cash Flow
-1.36B	-1.43B	-1.51B	-1.29B	-1.48B	-1.26B

Empire Co Cl A NV Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 46.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:EMP.A, the sentiment is Positive. The current price of 46.4 is below the 20-day moving average (MA) of 46.47, above the 50-day MA of 44.75, and above the 200-day MA of 41.02, indicating a neutral trend. The MACD of 0.99 indicates Negative momentum. The RSI at 72.52 is Negative, neither overbought nor oversold. The STOCH value of 91.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:EMP.A.

Empire Co Cl A NV Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRU	80 Outperform	C$21.69B	23.00	13.78%	1.39%	1.59%	-1.98%
NWC	80 Outperform	C$2.51B	18.23	18.85%	3.02%	4.23%	6.08%
EMP.A	78 Outperform	C$10.85B	16.48	12.64%	1.69%	1.05%	-6.94%
ATD	77 Outperform	C$67.23B	18.88	18.66%	1.04%	11.62%	-8.08%
Sector *	63 Neutral	$20.84B	14.17	-16.36%	3.22%	1.30%	4.55%
SAP	56 Neutral	C$10.59B	42.30	-2.28%	2.98%	9.20%	-147.37%

Empire Co Cl A NV Corporate Events

Empire Company Limited Announces CFO Transition

Empire Company Limited has announced the retirement of its CFO, Matt Reindel, effective in May, with Constantine (Costa) Pefanis set to take over the role. Pefanis brings extensive experience in capital and public markets, having previously served as CFO at Green Infrastructure Partners and Leon’s Furniture Limited. This leadership transition is expected to support Empire’s continued growth and operational success, following Reindel’s significant contributions during challenging economic conditions.

Empire Company Limited Reports Strong Q3 Results with Strategic Investments in Store Network

Empire Company Limited reported a 3.1% increase in sales for the third quarter of fiscal 2025, with earnings per share rising to $0.62 from $0.54 in the previous year. The company continues to prioritize enhancing its data capabilities and customer understanding, aiming for long-term growth in adjusted EPS through net earnings growth and share repurchases. Empire is also investing significantly in its store network, with plans to renovate 20% to 25% of its stores by fiscal 2026, focusing on sustainability and energy efficiency.