Q2 2025 Empire Company Ltd Earnings Call Transcript
Key Points
- Empire Co Ltd (EMLAF) reported a 1.8% increase in same-store sales, indicating positive momentum in consumer behavior.
- The company achieved a 48 basis point improvement in gross margins, driven by efficient supply chain management and cost control initiatives.
- E-commerce sales grew by 12% in Q2, with strong performance from the Voila platform and new partnerships with Instacart and Uber Eats.
- Empire Co Ltd (EMLAF) is seeing improvements in customer numbers and a smaller decline in average basket size, suggesting a return to more typical purchasing behaviors.
- The company is on track with its share buyback program, having repurchased 5.7 million shares for $213 million, indicating strong capital management.
- Despite improvements, the average basket size is still experiencing a decline, albeit smaller, which indicates ongoing challenges in consumer spending.
- The SG&A rate increased by 46 basis points, reflecting higher retail labor costs and investments in strategic initiatives.
- Empire Co Ltd (EMLAF) faces challenges in expanding its FreshCo stores in Western Canada, with slower than expected growth in the discount segment.
- The effective tax rate increased to 25.8% from 22.3% last year, impacting net earnings.
- The company is cautious about future gross margin expansion, expecting it to be within the 10 to 20 basis points range, as they begin to lap strong growth from previous quarters.
Good afternoon, ladies and gentlemen and welcome to the Empire second quarter, 2025 conference call. (Operator Instructions)
This call is being recorded on Thursday, December 12, 2024. I would now like to turn the conference over to Katie Brine, Investor Relations, Treasury and Pension. Please go ahead.
Thank you, Joanna. Good afternoon and thank you all for joining us for our second quarter conference call. Today, we will provide a summary comments on our results and then open the call for questions. This call is being recorded and the audio recording will be available on the company's website at empireco.ca. There is a short summary document outlining the points of our quarter available on our website.
Joining me on the call this afternoon are Michael Medline, President and Chief Executive Officer; Matt Reindel, Chief Financial Officer; Pierre St-Laurent, Chief Operating Officer; and Doug Nathanson, Chief Development Officer and General Counsel.
Today's discussion
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