- Earnings per share ("EPS") and adjusted EPS(1) of
$0.72
- Prior year EPS and adjusted EPS of $0.68
- Same-store sales, excluding fuel, increased by 2.6%
- Gross margin, excluding fuel, increased by 58 bps
- Project Horizon successfully completed; added an incremental
$500 million in annualized
EBITDA
- Repurchased 9.4 million shares ($350
million) in fiscal 2023, an increase of 48% over fiscal
2022
- Capital allocation outlook for fiscal 2024:
-
- Declared a dividend increase of 10.6%
- Renewed NCIB with the intention to repurchase $400 million of shares in fiscal 2024
- Capital investment program for fiscal 2024 expected to be
approximately $775 million
STELLARTON, NS, June 22,
2023 /CNW/ - Empire Company Limited ("Empire" or the
"Company") (TSX: EMP.A) today announced its financial results for
the fourth quarter and full year ended May
6, 2023. For the quarter, the Company recorded net earnings
of $182.9 million ($0.72 per share) compared to $178.5 million ($0.68 per share) last year. The Company is
excluding the estimated direct impact of the Cybersecurity
Event(2), net of insurance recoveries and the estimated
one-time costs associated with the integration of Grocery Gateway
into Voilà in its Adjusted Metrics(1). For the
quarter, the Company recorded adjusted net earnings of $184.9 million ($0.72 per share) compared to $178.5 million ($0.68 per share) last year.
"With our six-year turnaround now complete, we have the tools,
team, assets and capabilities needed to thrill our customers,
compete and win," said Michael Medline, President & Chief
Executive Officer, Empire. "Our focus going forward will be
on turbocharging our business, with an even greater emphasis
on our stores and supply chain, enhancing our digital capabilities
and driving efficiency."
Dividend Declaration
The Company declared a quarterly dividend of $0.1825 per share on both the Non-Voting Class A
shares ("Class A shares") and the Class B common shares that will
be payable on July 31, 2023 to
shareholders of record on July 14,
2023, which reflects an increase in the annualized dividend
rate of 10.6%. These dividends are eligible dividends as defined
for the purposes of the Income Tax Act (Canada) and applicable provincial
legislation.
Normal Course Issuer Bid ("NCIB")
On June 21, 2023, the Company
renewed its NCIB by filing a notice of intention with the Toronto
Stock Exchange ("TSX") to purchase for cancellation up to
12,600,000 Class A shares representing approximately 9.0% of the
public float of 139,497,542 Class A shares as of June 19, 2023, subject to regulatory approval. As
of June 19, 2023, there were
152,926,775 Class A shares issued and outstanding.
The Company intends to repurchase approximately $400.0 million of Class A shares in fiscal 2024.
The purchases will be made through the facilities of the TSX and/or
any alternative Canadian trading systems to the extent they are
eligible. The price that Empire will pay for any shares will be the
market price at the time of acquisition. The Company believes that
repurchasing shares at the prevailing market prices from time to
time is a worthwhile use of funds and in the best interests of
Empire and its shareholders. Purchases under the renewed NCIB may
commence on July 2, 2023 and shall
terminate no later than July 1,
2024.
(1)
|
Adjusted Metrics
include adjusted operating income, adjusted earnings before
interest, taxes, depreciation and amortization ("EBITDA"), adjusted
net earnings, and adjusted earnings per share ("EPS"). See
"Non-GAAP Financial Measures & Financial Metrics" section of
this News Release.
|
(2)
|
On November 4, 2022,
Empire experienced IT system issues related to a cybersecurity
event (the "Cybersecurity Event" or
"Event").
|
Based on the average daily trading volume ("ADTV") of 337,583
shares over the last six months, daily purchases will be limited to
84,395 Class A shares (25% of the ADTV of the Class A shares),
other than block purchase exemptions.
The Company has also renewed its automatic share purchase plan
with its designated broker allowing the purchase of Class A shares
for cancellation under its NCIB during trading black-out periods,
subject to regulatory approval.
Under the Company's current NCIB, that commenced on July 2, 2022 and expires on July 1, 2023, the Company received approval from
the TSX to purchase up to 10,500,000 Class A shares representing
approximately 7.0% of the public float of Class A shares
outstanding as of June 17, 2022. As
of June 19, 2023, the Company has
purchased 10,464,644 shares through the facilities of the TSX at a
weighted average price of $36.18 for
a total consideration of $378.6
million under the NCIB that commenced July 2, 2022 and expires on July 1, 2023.
Shares purchased during the quarter and year-to-date ended
May 6, 2023 compared to the same
periods of the previous fiscal year are shown in the table
below:
|
|
13 Weeks
Ended
|
14 Weeks
Ended
|
52 Weeks
Ended
|
53 Weeks
Ended
|
($ in millions, except
per share amounts)
|
May 6,
2023
|
May 7, 2022
|
|
May 6,
2023
|
May 7, 2022
|
Number of
shares
|
|
3,110,280
|
|
413,100
|
|
|
9,444,902
|
|
6,378,983
|
Weighted average price
per share
|
$
|
35.91
|
$
|
39.83
|
|
$
|
37.06
|
$
|
39.02
|
Cash consideration
paid
|
$
|
111.7
|
$
|
16.5
|
|
$
|
350.0
|
$
|
248.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROJECT HORIZON
The Company successfully completed its three-year growth
strategy, Project Horizon, at the end of fiscal 2023. As part of
this strategy, the Company realized significant benefits from the
store renovation program, new store expansion (including FreshCo
conversions and Farm Boy expansion), promotional optimization and
data analytics, Scene+ (a new loyalty program),
personalization of customer offers, growing and enhancing
the Own Brand portfolio, and generating strategic sourcing cost
efficiencies. The Company achieved management's target of an
incremental $500 million in
annualized EBITDA.
Project Horizon initiatives will continue to provide benefits in
fiscal 2024 and beyond, including Scene+, personalization
and a continued emphasis on developing the store network through
renovations and new store expansion.
Over Project Horizon's three-year timeframe, the Company
achieved a compound annual growth rate ("CAGR") in EPS of
approximately 13% and an increase in EBITDA margin of approximately
60 basis points, consistent with management's updated expectations
provided in the third quarter of fiscal 2023. Differences compared
to the original Project Horizon targets of improving EBITDA margin
by 100 basis points, which was expected to generate an EPS CAGR of
at least 15% was largely due to delays in delivering some key
initiatives as a result of the novel coronavirus ("COVID-19" or
"pandemic") and the Cybersecurity Event (as defined under the
heading "Business Update – Cybersecurity Event"), higher
depreciation than originally anticipated resulting from higher
capital spend, and the impact of significant and unexpected
inflation.
The Company's calculation of the EPS CAGR and the EBITDA margin
increase excludes the full impacts of the Cybersecurity Event (due
to its unusual nature and the expectation that the timing of
certain insurance recoveries will occur after the fiscal year end)
and the one-time costs associated with the Grocery Gateway
integration. See "Business Updates – Cybersecurity Event"
and "Business Updates – Voilà" for more information on these
adjustments.
COMPANY PRIORITIES
Over the last six years, the Company has successfully completed
two transformation strategies, Project Sunrise and Project Horizon.
These strategies have comprehensively reset Empire's foundation,
enhanced the Company's data capabilities, deepened the
understanding of customers, and prepared the business to
effectively capture emerging trends. With these transformation
strategies now accomplished and the turnaround complete, the
Company aims to grow total adjusted EPS over the long-term through
net earnings growth and share repurchases. The Company intends to
continue improving sales, gross margin (excluding fuel) and
adjusted EBITDA margin by focusing on priorities such as:
Continued Focus on Store:
Over recent years, the Company has accelerated investments in
renovations, conversions, and new stores along with store
processes, communications, training, technology and tools. Beyond
fiscal 2023, investing in the store network will remain a priority,
demonstrated by a sustained emphasis on renovations and continued
store expansion in Discount. The Own Brands program enhancement
will remain a priority through increased distribution, shelf
placement and product innovation.
The Company intends to invest capital in its store network and
is planning to renovate approximately 20% to 25% of the network
over the next three years. This capital investment includes
important sustainability initiatives such as refrigeration system
upgrades, heating, ventilation and air conditioning ("HVAC") system
upgrades and other energy efficiency initiatives.
Enhanced Focus on Digital and Data:
The focus on digital and data will include continued e-commerce
expansion with Voilà, loyalty, through Scene+ (see "Business
Updates – Voilà" and "Business Updates – Scene+" for more
information), personalization, improved space productivity and the
continued improvement of promotional optimization. Space
productivity will further enhance the customer experience by
improving store layouts, optimizing category and product
adjacencies and tailoring product assortment for each store. The
advanced analytics tools built for promotional optimization will
continue to be refined through the partnership between the advanced
analytics team and category merchants.
Efficiency and Cost Control:
The Company has significantly improved its efficiency and cost
effectiveness through sourcing efficiencies, optimizing supply
chain productivity and improving systems and processes. Beyond
fiscal 2023, the Company will continue to focus on driving
efficiency and cost effectiveness through initiatives related to
strategic sourcing and supply chain productivity.
SUMMARY RESULTS – FOURTH QUARTER & FISCAL
YEAR
The Company's fourth quarter and fiscal year ends on the first
Saturday in May. As a result, the fourth quarter and fiscal year
are usually 13 weeks and 52 weeks, respectively, but include
results for an additional week every five to six years. The
quarters ended May 6, 2023 and
May 7, 2022 were 13 and 14 weeks
respectively. The years ended May 6,
2023 and May 7, 2022 were 52
and 53 weeks, respectively. The 53rd week of operations in fiscal
2022 accounted for approximately $551.0
million in sales and generated earnings per share of
approximately $0.07.
On November 4, 2022, Empire
experienced IT system issues related to a Cybersecurity Event. The
Company has included in its Adjusted Metrics an adjustment for
direct costs such as inventory shrink, hardware and software
restoration costs, legal and professional fees, and labour costs,
net of insurance recoveries to date. The adjustment to net earnings
for the quarter ended May 6, 2023 was
a recovery of $5.0 million. The
adjustment to net earnings for fiscal 2023 was ($34.1) million.
In addition, the Cybersecurity Event required certain
operational systems to be shut down for several weeks. The
inability to utilize these systems had a temporary negative impact
on Empire's sales and operational effectiveness, further impacting
third quarter and fiscal 2023 net earnings by at least ($15.0) million (($0.06) per share). There was no incremental
impact in the fourth quarter.
Empire is in the process of working with its insurance providers
to make claims under its policies. Due to the complexity of the
cyber insurance coverage and related claims, there is a time lag
between the initial incurrence of costs and the recognition of
anticipated insurance proceeds.
Longo's e-commerce business, Grocery Gateway, will be merged
into Voilà in July 2023. The Company
has included in its Adjusted Metrics an adjustment for the costs of
the integration charged to earnings in the fourth quarter of fiscal
2023 which were approximately $7.0
million, net of tax and non-controlling interest.
($ in millions, except
per
|
13 Weeks
Ended
|
14 Weeks
Ended
|
|
$
|
52 Weeks
Ended
|
|
53 Weeks
Ended
|
|
$
|
share
amounts)
|
|
May 6,
2023
|
|
May 7, 2022
|
|
Change
|
|
May 6,
2023
|
|
May 7, 2022
|
|
Change
|
Sales
|
$
|
7,408.4
|
$
|
7,840.8
|
$
|
(432.4)
|
$
|
30,478.1
|
$
|
30,162.4
|
$
|
315.7
|
Gross
profit(1)
|
|
1,959.0
|
|
2,004.0
|
|
(45.0)
|
|
7,792.7
|
|
7,659.7
|
|
133.0
|
Operating
income
|
|
321.6
|
|
333.6
|
|
(12.0)
|
|
1,232.4
|
|
1,363.7
|
|
(131.3)
|
Adjusted operating
income(1)
|
|
328.1
|
|
333.6
|
|
(5.5)
|
|
1,291.5
|
|
1,363.7
|
|
(72.2)
|
EBITDA(1)
|
|
592.3
|
|
586.2
|
|
6.1
|
|
2,263.0
|
|
2,330.8
|
|
(67.8)
|
Adjusted
EBITDA(1)
|
|
598.8
|
|
586.2
|
|
12.6
|
|
2,322.1
|
|
2,330.8
|
|
(8.7)
|
Net
earnings(2)
|
|
182.9
|
|
178.5
|
|
4.4
|
|
686.0
|
|
745.8
|
|
(59.8)
|
Adjusted net
earnings(1)(2)
|
|
184.9
|
|
178.5
|
|
6.4
|
|
727.1
|
|
745.8
|
|
(18.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS(2)
|
$
|
0.72
|
$
|
0.68
|
$
|
0.04
|
$
|
2.64
|
$
|
2.80
|
$
|
(0.16)
|
Adjusted
EPS(1)(2)
|
|
0.72
|
|
0.68
|
|
0.04
|
|
2.80
|
|
2.80
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
number of
shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding (in
millions)
|
|
255.4
|
|
264.0
|
|
|
|
259.4
|
|
266.2
|
|
|
Dividend per
share
|
$
|
0.165
|
$
|
0.150
|
|
|
$
|
0.66
|
$
|
0.60
|
|
|
|
13 Weeks
Ended
|
|
14 Weeks
Ended
|
|
52 Weeks
Ended
|
|
53 Weeks
Ended
|
|
|
May 6,
2023
|
|
May 7, 2022
|
|
May 6,
2023
|
|
May 7, 2022
|
|
Gross
margin(1)
|
26.4 %
|
|
25.6 %
|
|
25.6 %
|
|
25.4 %
|
|
EBITDA
margin(1)
|
8.0 %
|
|
7.5 %
|
|
7.4 %
|
|
7.7 %
|
|
Adjusted EBITDA
margin(1)
|
8.1 %
|
|
7.5 %
|
|
7.6 %
|
|
7.7 %
|
|
Same-store
sales(1) growth (decline)
|
1.6 %
|
|
(0.1) %
|
|
2.3 %
|
|
0.0 %
|
|
Same-store sales growth
(decline), excluding fuel
|
2.6 %
|
|
(2.5) %
|
|
1.5 %
|
|
(2.1) %
|
|
Effective income tax
rate
|
25.3 %
|
|
23.1 %
|
|
24.6 %
|
|
25.0 %
|
|
|
|
(1)
|
See "Non-GAAP
Financial Measures & Financial Metrics" section of this News
Release for a description of the types of costs included.
Additionally, relating to the 52 weeks ended May 6, 2023, certain
estimated financial impacts associated with the Cybersecurity Event
are not reflected in the Adjusted Metrics above as they relate to
sales declines which management considers are attributable to the
Event, as well as operational effectiveness which temporarily
declined during the Event. Management estimates that the impact of
these non-adjusted items on operating income and EBITDA to be at
least ($20.0) million, and the net earnings impact to be at least
($15.0) million.
|
(2)
|
Attributable to
owners of the Company.
|
Sales
Sales for the quarter ended May 6,
2023 decreased by 5.5% mainly due to the additional week of
operations in fiscal 2022 and lower fuel sales, offset by benefits
from Project Horizon initiatives and continued strength in the
Company's discount banners.
Sales for the fiscal year ended May 6,
2023 increased 1.0%, primarily driven by increased fuel
sales and benefits from Project Horizon initiatives, including the
expansion of FreshCo in Western
Canada. This increase was partially offset by the additional
week of operations in the prior year, the impact of the pandemic
restrictions in place during various stages of the prior year,
changing consumer purchasing behaviours as a result of higher food
inflation, and the impact of the Cybersecurity Event in the current
year.
Gross Profit
Gross profit for the quarter ended May 6,
2023 decreased by 2.2% mainly as a result of the additional
week of operations in fiscal 2022, partially offset by benefits
from Project Horizon initiatives, such as promotional optimization
and the expansion of FreshCo.
Gross margin for the quarter ended May 6,
2023 increased to 26.4% from 25.6% in the prior year. Gross
margin increased primarily as a result of benefits from Project
Horizon initiatives, lower supply chain costs and the mix impact of
lower fuel sales. Gross margin, excluding the mix impact of fuel,
increased by 58 basis points.
Gross profit for the fiscal year ended May 6, 2023 increased by 1.7% primarily as a
result of benefits from Project Horizon initiatives, such as the
expansion of FreshCo, Voilà and Farm Boy, partially offset by the
additional week of operations in fiscal 2022, the Cybersecurity
Event and the change in customer purchasing behaviours.
Gross margin for the fiscal year ended May 6, 2023 increased to 25.6% from 25.4% in the
prior year. Gross margin was positively impacted by benefits from
Project Horizon initiatives offset by the mix impact of lower fuel
sales and the Cybersecurity Event. Gross margin, excluding the mix
impact of fuel, increased by 43 basis points.
Operating Income
|
13 Weeks
Ended
|
|
14 Weeks
Ended
|
|
|
$
|
52 Weeks
Ended
|
|
53 Weeks
Ended
|
|
|
$
|
($ in
millions)
|
|
May 6,
2023
|
|
|
May 7, 2022
|
|
|
Change
|
|
May 6,
2023
|
|
|
May 7, 2022
|
|
|
Change
|
Food
retailing
|
$
|
304.5
|
|
$
|
321.2
|
|
$
|
(16.7)
|
$
|
1,140.1
|
|
$
|
1,277.0
|
|
$
|
(136.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments and other
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crombie REIT
|
|
10.9
|
|
|
10.7
|
|
|
0.2
|
|
77.3
|
|
|
61.0
|
|
|
16.3
|
Genstar
|
|
6.5
|
|
|
3.3
|
|
|
3.2
|
|
16.5
|
|
|
32.4
|
|
|
(15.9)
|
Other operations, net
of corporate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expenses
|
|
(0.3)
|
|
|
(1.6)
|
|
|
1.3
|
|
(1.5)
|
|
|
(6.7)
|
|
|
5.2
|
|
|
17.1
|
|
|
12.4
|
|
|
4.7
|
|
92.3
|
|
|
86.7
|
|
|
5.6
|
Operating
income
|
$
|
321.6
|
|
$
|
333.6
|
|
$
|
(12.0)
|
$
|
1,232.4
|
|
$
|
1,363.7
|
|
$
|
(131.3)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cybersecurity
Event(1)
|
$
|
(6.8)
|
|
$
|
-
|
|
$
|
(6.8)
|
$
|
45.8
|
|
$
|
-
|
|
$
|
45.8
|
Grocery Gateway
Integration(1)
|
|
13.3
|
|
|
-
|
|
|
13.3
|
|
13.3
|
|
|
-
|
|
|
13.3
|
|
|
6.5
|
|
|
-
|
|
|
6.5
|
|
59.1
|
|
|
-
|
|
|
59.1
|
Adjusted operating
income(1)
|
$
|
328.1
|
|
$
|
333.6
|
|
$
|
(5.5)
|
$
|
1,291.5
|
|
$
|
1,363.7
|
|
$
|
(72.2)
|
(1)
|
See "Non-GAAP
Financial Measures & Financial Metrics" section of this News
Release for a description of the types of costs included.
Additionally, relating to the 52 weeks ended May 6, 2023, certain
estimated financial impacts associated with the Cybersecurity Event
are not reflected in the adjusted metric above as it relates to
sales declines which management considers are attributable to the
Event, as well as operational effectiveness which temporarily
declined during the Event. Management estimates that the impact of
this non-adjusted item on operating income to be at least ($20.0)
million.
|
For the quarter ended May 6, 2023,
operating income from the Food retailing segment decreased mainly
due to higher sales and gross profit in the prior year partially
offset by lower selling and administrative expenses in the current
year, both resulting from the additional week of operations in the
quarter ended May 7, 2022. Selling
and administrative expenses decreased primarily due to one less
week of operations, resulting in a reduction of retail labour costs
and other variable operating expenses, as well as lower annual
incentives compared to the prior year. The decrease in selling and
administrative expenses was partially offset by planned investments
in Project Horizon initiatives (including the expansion of Farm
Boy, Voilà and FreshCo) and higher depreciation.
For the quarter ended May 6, 2023,
operating income from the Investments and other operations segment
increased primarily as a result of higher equity earnings from
Genstar, mainly due to higher property sales compared to prior
year.
For the fiscal year ended May 6,
2023, operating income from the Food retailing segment
decreased mainly due to higher selling and administrative expense
and a decrease in other income (driven by $47.0 million of lease terminations in the prior
year), partially offset by higher sales and gross profit. Selling
and administrative expenses increased primarily as a result of
investments in Project Horizon initiatives (including the expansion
of Voilà, Farm Boy and FreshCo) as well as higher depreciation, the
Cybersecurity Event and increased project costs, partially offset
by one less week of operations in the current year, resulting in a
reduction of retail labour costs and other variable operating
expenses.
For the fiscal year ended May 6,
2023, operating income from the Investments and other
operations segment increased primarily as a result of higher equity
earnings from Crombie Real Estate Investment Trust ("Crombie
REIT"), mainly due to increased sales of properties, partially
offset by lower equity earnings from Genstar as a result of higher
property sales in the prior year.
EBITDA
For the quarter ended May 6, 2023,
EBITDA increased to $592.3 million
from $586.2 million in the prior
year mainly as a result of the same factors affecting
operating income (which excludes the increase in depreciation and
amortization). EBITDA margin increased to 8.0% from 7.5% in the
prior year. Adjusted EBITDA margin increased to 8.1% from
7.5% in the prior year.
For the fiscal year ended May 6,
2023, EBITDA decreased to $2,263.0
million from $2,330.8 million
in the prior year mainly as a result of the same factors affecting
operating income. EBITDA margin decreased to 7.4% from 7.7% in the
prior year. Adjusted EBITDA margin decreased to 7.6% from 7.7% in
the prior year.
|
13 Weeks
Ended
|
14 Weeks
Ended
|
|
$
|
52 Weeks
Ended
|
53 Weeks
Ended
|
|
$
|
($ in
millions)
|
|
May 6,
2023
|
|
May 7, 2022
|
|
Change
|
|
May 6,
2023
|
|
May 7, 2022
|
|
Change
|
EBITDA
|
$
|
592.3
|
$
|
586.2
|
$
|
6.1
|
$
|
2,263.0
|
$
|
2,330.8
|
$
|
(67.8)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cybersecurity
Event(1)
|
|
(6.8)
|
|
-
|
|
(6.8)
|
|
45.8
|
|
-
|
|
45.8
|
Grocery Gateway
Integration(1)
|
|
13.3
|
|
-
|
|
13.3
|
|
13.3
|
|
-
|
|
13.3
|
|
|
6.5
|
|
-
|
|
6.5
|
|
59.1
|
|
|
|
|
59.1
|
Adjusted
EBITDA(1)
|
$
|
598.8
|
$
|
586.2
|
$
|
12.6
|
$
|
2,322.1
|
$
|
2,330.8
|
$
|
(8.7)
|
(1)
|
See "Non-GAAP
Financial Measures & Financial Metrics" section of this News
Release for a description of the types of costs included.
Additionally, relating to the 52 weeks ended May 6, 2023, certain
estimated financial impacts associated with the Cybersecurity Event
are not reflected in the adjusted metric above as it relates to
sales declines which management considers are attributable to the
Event, as well as operational effectiveness which temporarily
declined during the Event. Management estimates that the impact of
this non-adjusted item on EBITDA to be at least ($20.0)
million.
|
Income Taxes
The effective income tax rate for the quarter ended May 6, 2023 was 25.3% compared to 23.1% last
year. The effective tax rate was lower than the statutory rate
primarily due to the revaluation of tax estimates, not all of which
are recurring. The effective tax rate in the same quarter last year
was lower than the statutory rate primarily due to benefits related
to investment tax credits and capital items taxed at lower
rates.
The effective income tax rate for the fiscal year ended
May 6, 2023 was 24.6% compared to
25.0% last year. The current year effective tax rate was lower than
the statutory rate primarily due to the revaluation of tax
estimates, not all of which were recurring, the benefit of
consolidated structured entities and capital items that are taxed
at lower rates. The effective tax rate in the prior year was lower
than the statutory rate primarily due to consolidated structured
entities and capital items, both of which are taxed at lower rates,
and benefits related to investment tax credits.
Net Earnings
($ in millions,
except
|
13 Weeks
Ended
|
|
14 Weeks
Ended
|
|
|
$
|
52 Weeks
Ended
|
|
53 Weeks
Ended
|
|
|
$
|
per share
amounts)
|
|
May 6,
2023
|
|
|
May 7, 2022
|
|
|
Change
|
|
May 6,
2023
|
|
|
May 7, 2022
|
|
|
Change
|
Net
earnings(1)
|
$
|
182.9
|
|
$
|
178.5
|
|
$
|
4.4
|
$
|
686.0
|
|
$
|
745.8
|
|
$
|
(59.8)
|
EPS (fully
diluted)
|
$
|
0.72
|
|
$
|
0.68
|
|
$
|
0.04
|
$
|
2.64
|
|
$
|
2.80
|
|
$
|
(0.16)
|
Adjustment (net of
income taxes of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$4.5 and
$18.0):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cybersecurity
Event(2)
|
|
(5.0)
|
|
|
-
|
|
|
(5.0)
|
|
34.1
|
|
|
-
|
|
|
34.1
|
Grocery
Gateway(2)
|
|
7.0
|
|
|
-
|
|
|
7.0
|
|
7.0
|
|
|
-
|
|
|
7.0
|
Adjusted net
earnings(1)(2)
|
$
|
184.9
|
|
$
|
178.5
|
|
$
|
6.4
|
$
|
727.1
|
|
$
|
745.8
|
|
$
|
(18.7)
|
Adjusted EPS (fully
diluted)(2)
|
$
|
0.72
|
|
$
|
0.68
|
|
$
|
0.04
|
$
|
2.80
|
|
$
|
2.80
|
|
$
|
-
|
Diluted weighted
average number of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shares outstanding (in
millions)
|
|
255.4
|
|
|
264.0
|
|
|
(8.6)
|
|
259.4
|
|
|
266.2
|
|
|
(6.8)
|
(1)
|
Attributable to
owners of the Company.
|
(2)
|
See "Non-GAAP
Financial Measures & Financial Metrics" section of this News
Release for a description of the types of costs included.
Additionally, relating to the 52 weeks ended May 6, 2023, certain
estimated financial impacts associated with the Cybersecurity Event
are not reflected in the Adjusted Metrics above
as they relate to sales declines which
management considers are attributable to the Event, as well as
operational effectiveness which temporarily declined during the
Event. Management estimates that the impact of this non-adjusted
item on net earnings to be at least ($15.0) million.
|
Capital Expenditures
The Company invested $243.1
million and $796.7 million in
capital expenditures(1) for the quarter and fiscal year
ended May 6, 2023, respectively (2022
– $273.4 million and $767.2 million) including renovations and
construction of new stores, investments in advanced analytics
technology and other technology systems, FreshCo stores in
Western Canada and Voilà Customer
Fulfilment Centres ("CFC").
For fiscal 2024, capital spend is expected to be approximately
$775 million, with approximately half
of this investment allocated to renovations and new store
expansion, and approximately $50
million allocated toward sustainability initiatives such as
refrigeration system upgrades, HVAC system upgrades and other
energy efficiency initiatives. The Company is planning to renovate
approximately 20% to 25% of the network over the next three
years.
(1)
|
Capital expenditures
are calculated on an accrual basis and includes acquisitions of
property, equipment and investment properties, and additions to
intangibles.
|
Free Cash Flow
|
|
|
13
Weeks
|
|
|
14 Weeks
|
|
|
|
|
|
52
Weeks
|
|
|
53 Weeks
|
|
|
|
|
|
|
|
Ended
|
|
|
Ended
|
|
|
$
|
|
|
Ended
|
|
|
Ended
|
|
|
$
|
|
($ in
millions)
|
May 6,
2023
|
|
May 7, 2022
|
|
Change
|
|
May 6,
2023
|
|
May 7, 2022
|
|
Change
|
|
Cash flows from
operating activities
|
$
|
504.6
|
|
$
|
469.5
|
|
$
|
35.1
|
|
$
|
1,605.3
|
|
$
|
2,107.1
|
|
$
|
(501.8)
|
|
Add:
|
proceeds on disposal of
assets(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and lease
terminations
|
|
29.4
|
|
|
25.5
|
|
|
3.9
|
|
|
48.9
|
|
|
175.6
|
|
|
(126.7)
|
|
Less:
|
interest
paid
|
|
(3.4)
|
|
|
(22.0)
|
|
|
18.6
|
|
|
(52.0)
|
|
|
(56.2)
|
|
|
4.2
|
|
|
payments of lease
liabilities, net of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
payments received for
finance subleases
|
|
(163.2)
|
|
|
(218.2)
|
|
|
55.0
|
|
|
(653.0)
|
|
|
(635.0)
|
|
|
(18.0)
|
|
|
acquisitions of
property, equipment,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investment property and
intangibles
|
|
(158.2)
|
|
|
(205.9)
|
|
|
47.7
|
|
|
(757.7)
|
|
|
(780.3)
|
|
|
22.6
|
|
Free cash
flow(2)
|
$
|
209.2
|
|
$
|
48.9
|
|
$
|
160.3
|
|
$
|
191.5
|
|
$
|
811.2
|
|
$
|
(619.7)
|
|
(1)
|
Proceeds on disposal
of assets include property, equipment and investment
property.
|
(2)
|
See "Non-GAAP
Financial Measures & Financial Metrics" section of this News
Release.
|
Free cash flow for the quarter ended May
6, 2023 increased versus prior year primarily as a result of
a decrease in payments of lease liabilities, net of payments
received for finance subleases, a decrease in acquisitions of
property, equipment, investment property and intangibles and an
increase in cash flows from operating activities. The increase
in cashflow from operating activities is driven by favourable
working capital changes, partially offset by lower net earnings and
higher income taxes paid.
Free cash flow for the fiscal year ended May 6, 2023 decreased versus prior year primarily
as a result of a decrease in cash flows from operating activities
and lower proceeds on disposal of assets and lease terminations.
The decrease in cash flows from operating activities is driven by
unfavourable working capital changes, higher income taxes paid and
lower net earnings.
FINANCIAL PERFORMANCE BY SEGMENT
Food Retailing
|
13 Weeks
Ended
|
14 Weeks
Ended
|
|
$
|
52 Weeks
Ended
|
53 Weeks
Ended
|
|
$
|
($ in
millions)
|
|
May 6,
2023
|
|
May 7, 2022
|
|
Change
|
|
May 6,
2023
|
|
May 7, 2022
|
|
Change
|
Sales
|
$
|
7,408.4
|
$
|
7,840.8
|
$
|
(432.4)
|
$
|
30,478.1
|
$
|
30,162.4
|
$
|
315.7
|
Gross profit
|
|
1,959.0
|
|
2,004.0
|
|
(45.0)
|
|
7,792.7
|
|
7,659.7
|
|
133.0
|
Operating
income
|
|
304.5
|
|
321.2
|
|
(16.7)
|
|
1,140.1
|
|
1,277.0
|
|
(136.9)
|
Adjusted operating
income(1)
|
|
311.0
|
|
321.2
|
|
(10.2)
|
|
1,199.2
|
|
1,277.0
|
|
(77.8)
|
EBITDA
|
|
575.2
|
|
573.8
|
|
1.4
|
|
2,170.6
|
|
2,243.9
|
|
(73.3)
|
Adjusted
EBITDA(1)
|
|
581.7
|
|
573.8
|
|
7.9
|
|
2,229.7
|
|
2,243.9
|
|
(14.2)
|
Net
earnings(2)
|
|
163.5
|
|
165.2
|
|
(1.7)
|
|
610.1
|
|
677.9
|
|
(67.8)
|
Adjusted net
earnings(1)(2)
|
|
165.5
|
|
165.2
|
|
0.3
|
|
651.2
|
|
677.9
|
|
(26.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
See "Non-GAAP
Financial Measures & Financial Metrics" section of this News
Release for a description of the types of costs included.
Additionally, relating to the 52 weeks ended May 6, 2023, certain
estimated financial impacts associated with the Cybersecurity Event
are not reflected in the Adjusted Metrics above as they relate to
sales declines which management considers are attributable to the
Event, as well as operational effectiveness which temporarily
declined during the Event. Management estimates that the impact of
this non-adjusted item on net earnings to be at least ($15.0)
million.
|
(2)
|
Attributable to
owners of the Company.
|
Investments and Other Operations
|
13 Weeks
Ended
|
14 Weeks
Ended
|
|
$
|
|
52 Weeks
Ended
|
53 Weeks
Ended
|
|
$
|
|
($ in
millions)
|
|
May 6,
2023
|
|
May 7, 2022
|
|
Change
|
|
|
May 6,
2023
|
|
May 7, 2022
|
|
Change
|
|
Operating
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crombie REIT
|
$
|
10.9
|
$
|
10.7
|
$
|
0.2
|
$
|
77.3
|
$
|
61.0
|
$
|
16.3
|
Genstar
|
|
6.5
|
|
3.3
|
|
3.2
|
|
16.5
|
|
32.4
|
|
(15.9)
|
Other operations, net
of
|
|
|
|
|
|
|
|
|
|
|
|
|
corporate
expenses
|
|
(0.3)
|
|
(1.6)
|
|
1.3
|
|
(1.5)
|
|
(6.7)
|
|
5.2
|
|
$
|
17.1
|
$
|
12.4
|
$
|
4.7
|
$
|
92.3
|
$
|
86.7
|
$
|
5.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED FINANCIAL CONDITION
($ in millions, except
per share and ratio calculations)
|
May 6,
2023
|
May 7, 2022
|
May 1, 2021
|
Shareholders' equity,
net of non-controlling interest
|
$
|
5,200.4
|
$
|
4,991.5
|
$
|
4,372.7
|
Book value per common
share(1)
|
$
|
20.09
|
$
|
18.82
|
$
|
16.30
|
Long-term debt,
including current portion
|
$
|
1,012.3
|
$
|
1,176.7
|
$
|
1,225.3
|
Long-term lease
liabilities, including current portion
|
$
|
6,184.6
|
$
|
6,285.4
|
$
|
5,908.1
|
Funded debt to total
capital(1)
|
|
58.1 %
|
|
59.9 %
|
|
62.0 %
|
Funded debt to adjusted
EBITDA(1)
|
|
3.1x
|
|
3.2x
|
|
3.3x
|
Adjusted EBITDA to
interest expense(1)
|
|
8.8x
|
|
8.3x
|
|
8.0x
|
Current assets to
current liabilities
|
|
0.8x
|
|
0.8x
|
|
0.9x
|
Total assets
|
$
|
16,483.7
|
$
|
16,593.6
|
$
|
15,173.9
|
Total non-current
financial liabilities
|
$
|
7,289.5
|
$
|
7,220.0
|
$
|
7,187.7
|
(1)
|
See "Non-GAAP
Financial Measures & Financial Metrics" section of this News
Release.
|
During fiscal 2023, DBRS Morningstar ("DBRS") upgraded
Sobeys' credit rating from BBB (low) to BBB and changed the trend
from positive to stable while S&P Global ("S&P") remained
unchanged from the prior year. The following table shows Sobeys'
credit ratings as at May 6, 2023:
Rating
Agency
|
Credit Rating
(Issuer rating)
|
Trend/Outlook
|
DBRS
|
BBB
|
Stable
|
S&P
|
BBB-
|
Stable
|
|
|
|
Pursuant to an agreement dated November
3, 2022, Empire amended and restated its senior, unsecured
revolving term credit agreement extending the maturity date to
November 4, 2027. The principal
amount was reduced from $250.0
million to $150.0 million. As
of May 6, 2023, the outstanding
amount of this facility was $48.8
million (2022 – $47.3
million). Interest payable on this facility fluctuates with
changes in the Canadian prime rate or bankers' acceptance
rates.
Pursuant to an agreement dated November
3, 2022, Sobeys amended and restated its $650.0 million senior, unsecured revolving term
credit agreement extending the maturity date to November 4, 2027. As of May 6, 2023, the outstanding amount of this
facility was $306.9 million (2022 – $
nil) and Sobeys has issued $70.4
million in letters of credit against the facility (2022 –
$75.1 million). Interest payable on
this facility fluctuates with changes in the Canadian prime rate or
bankers' acceptance rates.
For additional information on Empire's long-term debt, see note
15 of the Company's audited consolidated financial statements for
the fiscal year ended May 6,
2023.
BUSINESS UPDATES
Cybersecurity Event
On November 4, 2022, Empire
experienced IT system issues related to a cybersecurity event (the
"Cybersecurity Event" or "Event"). Upon discovery, the Company
immediately activated its incident response and business continuity
plans, including the engagement of world-class experts, isolated
the source and implemented measures to prevent further spread.
This Cybersecurity Event and the precautionary response caused
some temporary challenges in the third quarter. For example,
availability of some products was temporarily impacted, pharmacy
services were shut down for four days while some in-store services,
such as self-checkouts, gift cards and redemption of Scene+
points were impacted for approximately one week. Other than this,
customers would have noticed very few changes to their normal
shopping experience.
Empire's security teams, supplemented by leading cyber defense
firms, worked to remediate this incident, implemented preventative
measures, including proactively shutting down certain systems out
of an abundance of caution, and took steps to supplement existing
security monitoring, scanning and protective measures. During
restoration efforts, the Company established certain workaround
processes to ensure continuity of supply chain, product
availability, costing and retail pricing. Empire completed its
controlled and phased approach to systematically bringing
information and administrative systems back online early in the
fourth quarter of fiscal 2023.
The Company regards the protection of personal information as
critically important and has taken all required steps with privacy
regulators and potentially impacted individuals.
The Company has a multi-layered security approach involving
cyber software tools, controls, policies, standards and procedures
pertaining to security access, system development, change
management and problem and incident management. This Cybersecurity
Event has reinforced the importance of the investments already made
in the cybersecurity area, as well as upcoming investments in the
IT systems and people. Continuous enhancement of the Company's IT
infrastructure will strengthen its defense against future such
incidents.
The Company maintains a variety of insurance coverages,
including cyber insurance. Empire is in the process of working with
its insurance providers to make claims under its policies. Due to
the complexity of the cyber insurance coverage and related claims,
there is a time lag between the initial incurrence of costs and the
recognition of anticipated insurance proceeds. While the
operational impact of the Cybersecurity Event is behind the
Company, management expects that there will be additional insurance
recoveries in fiscal 2024.
The Cybersecurity Event is considered an unusual item and has
been excluded from the Company's assessment of Project Horizon. For
comparative purposes, the Company is presenting Adjusted Metrics to
exclude certain impacts of the Cybersecurity Event. The net
financial impact of incremental direct costs, inventory shrink and
insurance recoveries on net earnings in the fourth quarter and
fiscal year ended May 6, 2023, were
$5.0 million and ($34.1 million, respectively. Please refer to the
"Summary Results – Fourth Quarter and Fiscal Year" sections of this
document for a more detailed discussion, including a reconciliation
of these non-generally accepted accounting principles ("GAAP")
financial measures.
In addition, certain financial impacts are not reflected in the
Adjusted Metrics as they relate to sales declines which management
considers are attributable to the Cybersecurity Event and the
associated temporary decline in operational effectiveness during
the Cybersecurity Event. Management estimates that the impact on
net earnings in the fourth quarter was insignificant and the impact
on the fiscal year ended May 6, 2023,
was at least ($15) million, from
impacts such as the temporary loss of advanced planning, promotion,
and fresh item management tools, temporary closures of pharmacies
and customers' inability to redeem gift cards and loyalty
points.
Empire estimates, based on available information, that the final
impact on net earnings over fiscal 2023 and fiscal 2024 will be
approximately ($32.0) million, net of
estimated insurance recoveries.
Scene+
In June 2022, the Company launched
a new loyalty strategy through Scene+, one of Canada's leading loyalty programs. Along with
Scotiabank and Cineplex, the Company is now a co-owner of Scene+.
The new loyalty program was successfully launched in Atlantic Canada in August 2022, followed by Western Canada in September 2022, Ontario in November
2022 and Quebec &
Thrifty Foods in March 2023.
As part of the Scene+ rollout, the Company launched its
next generation recommendation engine for one-to-one, machine
learning powered personalization at scale. The recommendation
engine is focused on improving customer engagement and offer
relevancy. The target algorithms will continue to improve over
time, driving progressively better performance and results.
Farm Boy
The acquisition of Farm Boy on December
10, 2018 added 26 locations to the Company's Ontario store network. The Company expects to
open an additional 22 stores in the five years following the
acquisition date, mainly in the Greater
Toronto Area ("GTA"). For the fiscal year, the Company
opened a total of three new stores. As at June 21, 2023, Farm Boy has 47 stores operating
in Ontario. In fiscal 2024, the
Company expects to open two additional Farm Boy stores in
Ontario.
FreshCo
In fiscal 2018, the Company announced plans to expand its
FreshCo discount format to Western
Canada with expectations of converting up to 25% of the 255
Safeway and Sobeys full-service format stores in Western Canada to the FreshCo banner.
Through the FreshCo expansion program, the discount business in
Western Canada has been on a sharp
growth trajectory, driven by store conversions and regional
expansion. The value proposition, strong multicultural assortment
along with the addition of the Scene+ loyalty program has
supported the growth and expansion of the discount format.
As at June 21, 2023, FreshCo has
44 stores operating in Western
Canada including four stores opened during fiscal 2023, in
line with management's expectations. In fiscal 2024, the Company
expects to open an additional three FreshCo stores in Western Canada.
Voilà
In fiscal 2021, the Company introduced its new e-commerce
platform, Voilà, which is the future of online grocery home
delivery in Canada. Voilà is
powered by industry-leading technology provided by Ocado Group plc
("Ocado"), through its automated CFCs. The Company will operate
four CFCs across Canada with
supporting spokes and curbside pickup. The Company will be able to
serve approximately 75% of Canadian households representing
approximately 90% of Canadians' projected e-commerce spend.
The first CFC in Toronto began
deliveries in June 2020. The second
CFC in Montreal began deliveries
in March 2022. The third CFC in
Calgary which services the
majority of Alberta, began
deliveries on June 20, 2023. The
fourth CFC in Vancouver will
service customers in British
Columbia ("B.C.") starting in calendar 2025. In fiscal 2021,
the Company launched Voilà curbside pickup, which currently
services 98 stores in locations across Canada and is also powered by Ocado
technology.
Longo's e-commerce business, Grocery Gateway, will be merged
into Voilà in July 2023 thereby
capturing logistics and delivery synergies. Operating as a 'shop in
shop' will increase the reach of Longo's within Ontario and increase Voilà's product count by
approximately 2,000 Longo's products. The costs of the integration
were charged to earnings in the fourth quarter of fiscal 2023 and
were approximately $7.0 million, net
of tax and non-controlling interest.
Voilà's future earnings will primarily be impacted by the rate
of sales growth, with operational efficiencies, margins, and cost
discipline serving as important drivers to manage financial
performance.
In the fourth quarter of fiscal 2023, the Company's four
e-commerce platforms (Voilà, Grocery Gateway, IGA.net and
ThriftyFoods.com) experienced a combined sales decline of 13.5%
compared to the same quarter in the prior year (excluding the
additional week of operations in the prior year). The decrease is
primarily driven by higher online sales in the fourth quarter of
fiscal 2022 as a result of the pandemic, which had an outsized
impact on the Company's non-Voilà e-commerce businesses. According
to third-party market data, Voilà continues to outperform the
market over the last fiscal year.
Outlook
With the Company's turnaround complete, management aims to grow
total adjusted EPS over the long-term through net earnings growth
and share repurchases. The Company intends to continue improving
sales, gross margin (excluding fuel) and adjusted EBITDA margin by
focusing on priorities such as: a continued focus on stores
(investing in renovations, Discount expansion, and Own Brands
program enhancement), an expanded focus on digital and data
(through key strategic initiatives including Voilà, Scene+,
personalization, space productivity and promotional optimization),
and driving efficiency and cost effectiveness through initiatives
related to strategic sourcing and supply chain.
For fiscal 2024, capital spend is expected to be approximately
$775 million, with approximately half
of this investment allocated to renovations and new store
expansion, and approximately $50
million allocated toward sustainability initiatives such as
refrigeration system upgrades, HVAC system upgrades and other
energy efficiency initiatives. The Company is planning to renovate
approximately 20% to 25% of the network over the next three
years.
During fiscal 2024, the Company intends to purchase
approximately $400 million in Class A
shares under an NCIB. The Company has declared a quarterly dividend
which reflects an increase in the annualized dividend rate of
10.6%, marking the 28th consecutive year of dividend
increases.
The Company continues to be well positioned to pursue growth
despite the impacts of global economic uncertainties such as higher
than normal inflation and supply chain challenges. The industry
continues to experience heightened levels of inflationary
pressures, particularly related to cost of goods sold and fuel.
Although it is difficult to estimate how long these pressures will
last, the Company is focused on supplier relationships and
negotiations to ensure competitive pricing for customers whose
shopping behaviours become more price sensitive in a heightened
inflationary environment.
On December 13, 2022, the Company
signed a definitive agreement between a wholly-owned subsidiary of
Sobeys Inc.'s ("Sobeys") and Canadian Mobility Services Limited, a
wholly-owned subsidiary of Shell Canada, to sell all 56 retail fuel
sites in Western Canada for
approximately $100.0 million. Closing
of the transaction is subject to customary conditions, including
regulatory approvals. The Company expects the transaction to close
in the first half of fiscal 2024.
Forward-Looking Information
This document contains forward-looking statements which are
presented for the purpose of assisting the reader to contextualize
the Company's financial position and understand management's
expectations regarding the Company's strategic priorities,
objectives and plans. These forward-looking statements may not be
appropriate for other purposes. Forward-looking statements are
identified by words or phrases such as "anticipates", "expects",
"believes", "estimates", "intends", "could", "may", "plans",
"predicts", "projects", "will", "would", "foresees" and other
similar expressions or the negative of these terms.
These forward-looking statements include, but are not limited
to, the following items:
- The Company's plans to purchase for cancellation Class A shares
under the normal course issuer bid, which may be impacted by market
and macro-economic conditions, availability of sellers, changes in
laws and regulations, and the results of operations;
- The Company's aim to increase total adjusted EPS through net
earnings, growth, and share repurchases, as well as its intention
to continue improving sales, gross margin (excluding fuel) and
adjusted EBITDA margin, all of which could be impacted by several
factors including a prolonged unfavourable macro-economic
environment and unforeseen business challenges, as well as the
factors identified in the "Risk Management" section of the fiscal
2023 MD&A;
- The Company's plans to further grow and enhance the Own Brand
portfolio, which may be impacted by future operating costs and
customer response;
- The Company's plan to invest capital in its store network
including store expansions and renovations and renovate
approximately 20% to 25% of the network over the next three years
which could be impacted by cost of materials, availability of
contractors, operating results, and other macro-economic
impacts;
- The Company's expectation that it will continue its e-commerce
expansion with Voilà, which may be impacted by future
operating and capital costs, customer response and the performance
of its technology provider, Ocado;
- The Company's expectation that it will continue to focus on
driving efficiency and cost effectiveness initiatives which could
be impacted by supplier relationships, labour relations, and other
macro-economic impacts;
- Management's expectations regarding the scope and impact of the
Cybersecurity Event, and the estimate of the impact on its
financial results in 2024. These statements and expectations may be
impacted by several factors including the nature, amount and timing
of the insurance outcome;
- The FreshCo expansion in Western
Canada and Farm Boy expansion in Ontario, including the Company's expectations
regarding future operating results and profitability, the amount
and timing of expenses, the projected number of store openings, and
the location, feasibility and timing of construction, all of which
may be impacted by construction schedules and permits, the
macro-economic environment and labour relations;
- The Company's expectations regarding the amount and timing of
expenses relating to the completion of any future CFC, which
may be impacted by supply of materials and equipment, construction
schedules and capacity of construction contractors;
- The Company's plan to integrate Voilà and Grocery Gateway
may be impacted by pre-existing supplier relationships;
- The Company's expectation of the impacts of cost inflationary
pressures, which may be impacted by supplier relationships and
negotiations and the macro-economic environment; and
- The Company's expectations on the timing of the disposition of
56 retail fuel sites in Western
Canada, which may be impacted by regulatory approval and
closing conditions.
By its nature, forward-looking information requires the Company
to make assumptions and is subject to inherent risks, uncertainties
and other factors which may cause actual results to differ
materially from forward-looking statements made. For more
information on risks, uncertainties and assumptions that may impact
the Company's forward-looking statements, please refer to the
Company's materials filed with the Canadian securities regulatory
authorities, including the "Risk Management" section of the fiscal
2023 annual MD&A.
Although the Company believes the predictions, forecasts,
expectations or conclusions reflected in the forward-looking
information are reasonable, it can provide no assurance that such
matters will prove correct. Readers are urged to consider the
risks, uncertainties and assumptions carefully in evaluating the
forward-looking information and are cautioned not to place undue
reliance on such forward-looking information. The forward-looking
information in this document reflects the Company's current
expectations and is subject to change. The Company does not
undertake to update any forward-looking statements that may be made
by or on behalf of the Company other than as required by applicable
securities laws.
NON-GAAP FINANCIAL MEASURES & FINANCIAL METRICS
There are measures and metrics included in this News Release
that do not have a standardized meaning under GAAP and therefore
may not be comparable to similarly titled measures and metrics
presented by other publicly traded companies. Management believes
that certain of these measures and metrics, including gross profit
and EBITDA, are important indicators of the Company's ability to
generate liquidity through operating cash flow to fund future
working capital requirements, service outstanding debt and fund
future capital expenditures and uses these metrics for these
purposes.
In addition, management adjusts measures and metrics, including
operating income, EBITDA and net earnings in an effort to provide
investors and analysts with a more comparable year-over-year
performance metric than the basic measure by excluding certain
items. These items may impact the analysis of trends in performance
and affect the comparability of the Company's core financial
results. By excluding these items, management is not implying they
are non-recurring.
The Company includes these measures and metrics because it
believes certain investors use these measures and metrics as a
means of assessing financial performance. Empire's definition of
the non-GAAP terms included in this News Release are as
follows:
- The Cybersecurity Event adjustment includes the impact of
incremental direct costs such as inventory shrink, hardware and
software restoration costs, legal and professional fees, labour
costs and insurance recoveries. Management believes that the
Cybersecurity Event adjustment results in a useful economic
representation of the underlying business on a comparative basis.
The adjustment does not include management's estimate of the full
financial impact of the Cybersecurity Event, as it excludes the net
earnings impacts related to the estimated decline in sales and
operational effectiveness from impacts such as the temporary loss
of advanced planning, promotion and fresh item management tools,
the temporary closure of pharmacies, and customers' temporary
inability to redeem gift cards and loyalty points.
- The Grocery Gateway Integration adjustment includes the impact
of the asset write-off related to the grocery gateway name and
facility assets, severance, IT project costs and other costs.
- Same-store sales are sales from stores in the same location in
both reporting periods.
- Same-store sales, excluding fuel are sales from stores in the
same location in both reporting periods excluding the fuel sales
from stores in the same location in both reporting periods.
- Gross profit is calculated as sales less cost of sales.
- Gross margin is gross profit divided by sales.
- Adjusted operating income is operating income excluding certain
items to better analyze trends in performance. These items are
excluded to allow for better period over period comparison of
ongoing operating results. Adjusted operating income is reconciled
to operating income in its respective subsection of the "Summary
Results – Fourth Quarter & Fiscal Year" section.
- EBITDA is calculated as net earnings before finance costs (net
of finance income), income tax expense, depreciation and
amortization of intangibles.
The following table reconciles net earnings to EBITDA:
|
13 Weeks
Ended
|
14 Weeks
Ended
|
|
13 Weeks
Ended
|
($ in
millions)
|
|
May 6,
2023
|
|
May 7, 2022
|
|
|
May 1, 2021
|
Net earnings
|
$
|
187.9
|
$
|
193.4
|
|
$
|
183.3
|
Income tax
expense
|
|
63.5
|
|
58.2
|
|
|
45.0
|
Finance costs,
net
|
|
70.2
|
|
82.0
|
|
|
66.7
|
Operating
income
|
|
321.6
|
|
333.6
|
|
|
295.0
|
Depreciation
|
|
237.0
|
|
227.8
|
|
|
200.2
|
Amortization of
intangibles
|
|
33.7
|
|
24.8
|
|
|
19.2
|
EBITDA
|
$
|
592.3
|
$
|
586.2
|
|
$
|
514.4
|
|
|
|
|
|
|
|
|
|
|
|
|
52 Weeks
Ended
|
53 Weeks
Ended
|
|
52 Weeks
Ended
|
($ in
millions)
|
|
May 6,
2023
|
|
May 7, 2022
|
|
|
May 1, 2021
|
Net earnings
|
$
|
727.7
|
$
|
811.3
|
|
$
|
764.2
|
Income tax
expense
|
|
237.7
|
|
270.3
|
|
|
265.9
|
Finance costs,
net
|
|
267.0
|
|
282.1
|
|
|
269.4
|
Operating
income
|
|
1,232.4
|
|
1,363.7
|
|
|
1,299.5
|
Depreciation
|
|
916.0
|
|
872.3
|
|
|
768.7
|
Amortization of
intangibles
|
|
114.6
|
|
94.8
|
|
|
75.6
|
EBITDA
|
$
|
2,263.0
|
$
|
2,330.8
|
|
$
|
2,143.8
|
- EBITDA margin is EBITDA divided by sales.
- Adjusted EBITDA is EBITDA excluding certain items to better
analyze trends in performance. These items are excluded to allow
for better period over period comparison of ongoing operating
results. Adjusted EBITDA is reconciled to EBITDA in its respective
subsection of the "Summary Results – Fourth Quarter & Fiscal
Year" section.
- Adjusted EBITDA margin is adjusted EBITDA divided by
sales.
- Free cash flow is calculated as cash flows from operating
activities, plus proceeds on disposal of property, equipment and
investment property and lease terminations, less acquisitions of
property, equipment, investment property and intangibles, interest
paid and payments of lease liabilities, net of payments received
from finance subleases.
- Book value per common share is shareholders' equity, net of
non-controlling interest, divided by total common shares
outstanding.
The following table shows the calculation of Empire's book value
per common share as at May 6, 2023,
May 7, 2022 and May 1, 2021:
($ in millions, except
per share information)
|
|
May 6,
2023
|
|
May 7, 2022
|
|
May 1, 2021
|
Shareholders' equity,
net of non-controlling interest
|
$
|
5,200.4
|
$
|
4,991.5
|
$
|
4,372.7
|
Shares outstanding
(basic)
|
|
258.8
|
|
265.2
|
|
268.3
|
Book value per common
share
|
$
|
20.09
|
$
|
18.82
|
$
|
16.30
|
- Funded debt is all interest-bearing debt, which includes bank
loans, bankers' acceptances, long-term debt and long-term lease
liabilities.
- Total capital is calculated as funded debt plus shareholders'
equity, net of non-controlling interest.
The following table reconciles the Company's funded debt and
total capital to GAAP measures as reported on the balance sheets as
at May 6, 2023, May 7, 2022 and May 1,
2021, respectively:
($ in
millions)
|
|
May 6,
2023
|
|
May 7, 2022
|
|
May 1, 2021
|
Long-term debt due
within one year
|
$
|
101.0
|
$
|
581.0
|
$
|
46.5
|
Long-term
debt
|
|
911.3
|
|
595.7
|
|
1,178.8
|
Lease liabilities due
within one year
|
|
563.7
|
|
509.5
|
|
490.5
|
Long-term lease
liabilities
|
|
5,620.9
|
|
5,775.9
|
|
5,417.6
|
Funded debt
|
|
7,196.9
|
|
7,462.1
|
|
7,133.4
|
Total shareholders'
equity, net of non-controlling interest
|
|
5,200.4
|
|
4,991.5
|
|
4,372.7
|
Total
capital
|
$
|
12,397.3
|
$
|
12,453.6
|
$
|
11,506.1
|
- Adjusted net earnings is net earnings, net of non-controlling
interest, excluding certain items to better analyze trends in
performance. These items are excluded to allow for better period
over period comparison of ongoing operating results. Adjusted net
earnings is reconciled in its respective subsection of the "Summary
Results – Fourth Quarter & Fiscal Year" section.
- Adjusted EPS (fully diluted) is calculated as adjusted net
earnings divided by diluted weighted average number of shares
outstanding.
- Funded debt to total capital ratio is funded debt divided by
total capital.
- Funded debt to adjusted EBITDA ratio is funded debt divided by
trailing four-quarter EBITDA.
- Adjusted EBITDA to interest expense ratio is trailing
four-quarter EBITDA divided by trailing four-quarter interest
expense.
- Management calculates interest expense as interest expense on
financial liabilities measured at amortized cost and interest
expense on lease liabilities.
The following table reconciles finance costs, net to interest
expense:
|
|
13 Weeks
Ended
|
14 Weeks
Ended
|
|
13 Weeks
Ended
|
($ in
millions)
|
May 6,
2023
|
May 7, 2022
|
|
May 1, 2021
|
Finance costs,
net
|
$
|
70.2
|
$
|
82.0
|
|
$
|
66.7
|
Plus:
|
finance income,
excluding interest
|
|
|
|
|
|
|
|
|
|
|
|
income on lease
receivables
|
|
1.7
|
|
2.3
|
|
|
1.7
|
Less:
|
pension finance costs,
net
|
|
(2.7)
|
|
(2.0)
|
|
|
(2.1)
|
Less:
|
accretion expense on
provisions
|
|
(0.3)
|
|
(0.1)
|
|
|
(0.5)
|
Interest
expense
|
$
|
68.9
|
$
|
82.2
|
|
$
|
65.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52 Weeks
Ended
|
53 Weeks
Ended
|
|
52 Weeks
Ended
|
($ in
millions)
|
May 6,
2023
|
May 7, 2022
|
|
May 1, 2021
|
Finance costs,
net
|
$
|
267.0
|
$
|
282.1
|
|
$
|
269.4
|
Plus:
|
finance income,
excluding interest
|
|
|
|
|
|
|
|
|
|
|
|
income on lease
receivables
|
|
5.3
|
|
7.3
|
|
|
9.8
|
Less:
|
pension finance costs,
net
|
|
(7.8)
|
|
(7.8)
|
|
|
(8.1)
|
Less:
|
accretion expense on
provisions
|
|
(1.4)
|
|
(1.9)
|
|
|
(2.3)
|
Interest
expense
|
$
|
263.1
|
$
|
279.7
|
|
$
|
268.8
|
For a more complete description of Empire's non-GAAP measures
and metrics, please see the section headed "Non-GAAP Financial
Measures & Financial Metrics" in Empire's MD&A for the
fourth quarter ended May 6, 2023
available on SEDAR at www.sedar.com, which section is incorporated
by reference into this press release.
CONFERENCE CALL INFORMATION
The Company will hold an analyst call on Thursday, June 22, 2023 beginning at 11:30 a.m. (Eastern Daylight Time) during which
senior management will discuss the Company's financial results for
the fourth quarter of fiscal 2023. To instantly join the conference
call by phone, please use the following URL to easily register
yourself and be connected into the conference call automatically:
https://emportal.ink/42Ysyht. You can also be entered to the call
by an Operator by dialing (888) 390-0546 outside the Toronto area or (416) 764-8688 from within the
Toronto area.
To secure a line, please call 10 minutes prior to the conference
call; you will be placed on hold until the conference call begins.
The media and investing public may access this conference call via
a listen mode only. You may also listen to a live audiocast of the
conference call by visiting the "Quick Links" section of the
Company's website located at www.empireco.ca, and then navigating
to the "Empire Company Limited Quarterly Results Call" link.
Replay will be available by dialing (888) 390-0541 and entering
access code 984059 until midnight July 6,
2023, or on the Company's website for 90 days following the
conference call.
SELECTED FINANCIAL INFORMATION
The following financial information is derived from our audited
annual consolidated financial statements for the year ended
May 6, 2023. The information does not
include all disclosures required by International Financial
Reporting Standards ("IFRS") and should be read in conjunction with
the Company's 2023 audited consolidated financial statements
available at www.sedar.com or by accessing the Investor Centre
section of the Company's website at www.empireco.ca.
Empire Company
Limited
|
|
|
|
|
|
|
Consolidated Balance
Sheets
|
|
|
|
|
|
As At
|
|
May 6
|
May 7
|
(in millions of
Canadian dollars)
|
|
2023
|
2022
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
221.3
|
|
$
|
812.3
|
Receivables
|
|
|
683.4
|
|
|
558.8
|
Inventories
|
|
|
1,743.3
|
|
|
1,591.5
|
Prepaid
expenses
|
|
|
131.0
|
|
|
127.6
|
Leases and other
receivables
|
|
|
85.2
|
|
|
73.8
|
Income taxes
receivable
|
|
|
90.8
|
|
|
48.7
|
|
|
|
|
|
|
|
|
|
|
2,955.0
|
|
|
3,212.7
|
|
|
|
|
|
|
|
Leases and other
receivables
|
|
|
587.0
|
|
|
549.1
|
Investments, at
equity
|
|
|
701.9
|
|
|
681.5
|
Other assets
|
|
|
26.3
|
|
|
21.7
|
Property and
equipment
|
|
|
3,338.1
|
|
|
3,159.2
|
Right-of-use
assets
|
|
|
4,860.9
|
|
|
4,999.7
|
Investment
property
|
|
|
166.8
|
|
|
146.8
|
Intangibles
|
|
|
1,375.6
|
|
|
1,338.5
|
Goodwill
|
|
|
2,067.8
|
|
|
2,059.0
|
Deferred tax
assets
|
|
|
404.3
|
|
|
425.4
|
|
|
|
|
|
|
|
|
|
$
|
16,483.7
|
|
$
|
16,593.6
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
3,028.6
|
|
$
|
2,988.9
|
Income taxes
payable
|
|
|
61.3
|
|
|
127.6
|
Provisions
|
|
|
29.9
|
|
|
32.7
|
Long-term debt due
within one year
|
|
|
101.0
|
|
|
581.0
|
Lease liabilities due
within one year
|
|
|
563.7
|
|
|
509.5
|
Other liabilities due
within one year
|
|
|
73.0
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
3,857.5
|
|
|
4,239.7
|
|
|
|
|
|
|
|
Provisions
|
|
|
42.7
|
|
|
44.2
|
Long-term
debt
|
|
|
911.3
|
|
|
595.7
|
Long-term lease
liabilities
|
|
|
5,620.9
|
|
|
5,775.9
|
Other long-term
liabilities
|
|
|
279.2
|
|
|
366.0
|
Employee future
benefits
|
|
|
166.6
|
|
|
178.2
|
Deferred tax
liabilities
|
|
|
268.8
|
|
|
260.0
|
|
|
|
|
|
|
|
|
|
|
11,147.0
|
|
|
11,459.7
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
Capital
stock
|
|
|
1,914.7
|
|
|
2,026.1
|
Contributed
surplus
|
|
|
50.1
|
|
|
37.2
|
Retained
earnings
|
|
|
3,216.0
|
|
|
2,914.2
|
Accumulated other
comprehensive income
|
|
|
19.6
|
|
|
14.0
|
|
|
|
|
|
|
|
|
|
|
5,200.4
|
|
|
4,991.5
|
|
|
|
|
|
|
|
Non-controlling
interest
|
|
|
136.3
|
|
|
142.4
|
|
|
|
|
|
|
|
|
|
|
5,336.7
|
|
|
5,133.9
|
|
|
|
|
|
|
|
|
|
$
|
16,483.7
|
|
$
|
16,593.6
|
Empire Company
Limited
|
|
|
|
Condensed
Consolidated Statements of Earnings
|
13 and 14 Weeks
Ended
|
|
52 and 53 Weeks
Ended
|
(in millions of
Canadian dollars,
|
May 6
|
|
May 7
|
|
May 6
|
|
May 7
|
except share and per
share amounts)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
7,408.4
|
|
$
|
7,840.8
|
|
$
|
30,478.1
|
|
$
|
30,162.4
|
Other income
|
|
39.9
|
|
|
25.8
|
|
|
60.8
|
|
|
86.8
|
Share of earnings from
investments, at equity
|
|
17.2
|
|
|
14.7
|
|
|
87.7
|
|
|
93.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
5,449.4
|
|
|
5,836.8
|
|
|
22,685.4
|
|
|
22,502.7
|
Selling and
administrative expenses
|
|
1,694.5
|
|
|
1,710.9
|
|
|
6,708.8
|
|
|
6,475.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
321.6
|
|
|
333.6
|
|
|
1,232.4
|
|
|
1,363.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance costs,
net
|
|
70.2
|
|
|
82.0
|
|
|
267.0
|
|
|
282.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income
taxes
|
|
251.4
|
|
|
251.6
|
|
|
965.4
|
|
|
1,081.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
63.5
|
|
|
58.2
|
|
|
237.7
|
|
|
270.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
$
|
187.9
|
|
$
|
193.4
|
|
$
|
727.7
|
|
$
|
811.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings for the period
attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interest
|
$
|
5.0
|
|
$
|
14.9
|
|
$
|
41.7
|
|
$
|
65.5
|
Owners of the
Company
|
|
182.9
|
|
|
178.5
|
|
|
686.0
|
|
|
745.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
187.9
|
|
$
|
193.4
|
|
$
|
727.7
|
|
$
|
811.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.72
|
|
$
|
0.68
|
|
$
|
2.65
|
|
$
|
2.81
|
Diluted
|
$
|
0.72
|
|
$
|
0.68
|
|
$
|
2.64
|
|
$
|
2.80
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares
|
outstanding, in
millions
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
254.9
|
|
|
263.0
|
|
|
258.8
|
|
|
265.2
|
Diluted
|
|
255.4
|
|
|
264.0
|
|
|
259.4
|
|
|
266.2
|
|
|
|
|
Empire Company
Limited
|
13 and 14 Weeks
Ended
|
|
52 and 53 Weeks
Ended
|
Consolidated
Statements of Cash Flows
|
May 6
|
|
May 7
|
|
May 6
|
|
May 7
|
(in millions of
Canadian dollars)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
$
|
187.9
|
|
$
|
193.4
|
|
$
|
727.7
|
|
$
|
811.3
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
237.0
|
|
|
227.8
|
|
|
916.0
|
|
|
872.3
|
Income tax
expense
|
|
63.5
|
|
|
58.2
|
|
|
237.7
|
|
|
270.3
|
Finance costs,
net
|
|
70.2
|
|
|
82.0
|
|
|
267.0
|
|
|
282.1
|
Amortization of
intangibles
|
|
33.7
|
|
|
24.8
|
|
|
114.6
|
|
|
94.8
|
Net gain on disposal of
assets
|
|
(35.5)
|
|
|
(3.7)
|
|
|
(44.7)
|
|
|
(23.1)
|
Net gain on lease
terminations
|
|
-
|
|
|
(23.6)
|
|
|
-
|
|
|
(47.0)
|
Impairment losses
(reversals) of non-financial
|
|
|
|
|
|
|
|
|
|
|
|
assets, net
|
|
9.0
|
|
|
(7.0)
|
|
|
6.2
|
|
|
(7.4)
|
Impairment losses of
long-lived assets
|
|
6.7
|
|
|
-
|
|
|
6.7
|
|
|
-
|
Amortization of
deferred items
|
|
2.1
|
|
|
0.6
|
|
|
1.6
|
|
|
1.8
|
Equity in earnings of
other entities, net of
|
|
|
|
|
|
|
|
|
|
|
|
distributions
received
|
|
(5.0)
|
|
|
(0.9)
|
|
|
(10.2)
|
|
|
9.5
|
Employee future
benefits
|
|
(1.1)
|
|
|
(2.5)
|
|
|
(3.9)
|
|
|
(12.0)
|
(Decrease) increase in
long-term provisions
|
|
(0.3)
|
|
|
2.8
|
|
|
(2.9)
|
|
|
(0.7)
|
Equity based
compensation
|
|
5.2
|
|
|
6.0
|
|
|
17.3
|
|
|
14.6
|
Net change in non-cash
working capital
|
|
(2.6)
|
|
|
(37.9)
|
|
|
(307.4)
|
|
|
(46.8)
|
Income taxes paid,
net
|
|
(66.2)
|
|
|
(50.5)
|
|
|
(320.4)
|
|
|
(112.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
504.6
|
|
|
469.5
|
|
|
1,605.3
|
|
|
2,107.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
|
|
|
|
|
|
|
|
|
|
|
|
Increase in equity
investments
|
|
(1.0)
|
|
|
(83.0)
|
|
|
(3.4)
|
|
|
(124.5)
|
Property, equipment and
investment property
|
|
|
|
|
|
|
|
|
|
|
|
purchases
|
|
(105.5)
|
|
|
(128.5)
|
|
|
(574.2)
|
|
|
(633.0)
|
Intangible
purchases
|
|
(52.7)
|
|
|
(77.4)
|
|
|
(183.5)
|
|
|
(147.3)
|
Proceeds on disposal of
assets
|
|
29.4
|
|
|
25.5
|
|
|
48.9
|
|
|
165.6
|
Proceeds on lease
terminations
|
|
-
|
|
|
-
|
|
|
-
|
|
|
10.0
|
Leases and other
receivables, net
|
|
(35.5)
|
|
|
15.7
|
|
|
(34.8)
|
|
|
25.4
|
Other assets and other
long-term liabilities
|
|
(3.4)
|
|
|
(2.1)
|
|
|
(6.7)
|
|
|
(28.9)
|
Business
acquisitions
|
|
(2.4)
|
|
|
(6.0)
|
|
|
(18.7)
|
|
|
(242.0)
|
Payments received for
finance subleases
|
|
21.9
|
|
|
27.3
|
|
|
84.8
|
|
|
79.4
|
Interest
received
|
|
0.5
|
|
|
1.5
|
|
|
2.9
|
|
|
3.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used in
investing activities
|
|
(148.7)
|
|
|
(227.0)
|
|
|
(684.7)
|
|
|
(891.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of long-term
debt
|
|
21.7
|
|
|
15.2
|
|
|
87.1
|
|
|
94.6
|
Repayments of long-term
debt
|
|
(18.1)
|
|
|
(13.4)
|
|
|
(590.2)
|
|
|
(96.8)
|
(Repayments) advances
on credit facilities, net
|
|
(3.2)
|
|
|
30.4
|
|
|
337.9
|
|
|
(83.2)
|
Interest
paid
|
|
(3.4)
|
|
|
(22.0)
|
|
|
(52.0)
|
|
|
(56.2)
|
Payments of lease
liabilities (principal portion)
|
|
(125.6)
|
|
|
(182.6)
|
|
|
(507.6)
|
|
|
(482.8)
|
Payments of lease
liabilities (interest portion)
|
|
(59.5)
|
|
|
(62.9)
|
|
|
(230.2)
|
|
|
(231.6)
|
Repurchase of common
shares
|
|
(111.7)
|
|
|
(16.5)
|
|
|
(350.0)
|
|
|
(248.9)
|
Dividends paid, common
shares
|
|
(41.9)
|
|
|
(37.6)
|
|
|
(170.2)
|
|
|
(156.8)
|
Non-controlling
interest
|
|
(3.5)
|
|
|
(6.4)
|
|
|
(36.4)
|
|
|
(32.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used in
financing activities
|
|
(345.2)
|
|
|
(295.8)
|
|
|
(1,511.6)
|
|
|
(1,293.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in
cash and cash equivalents
|
|
10.7
|
|
|
(53.3)
|
|
|
(591.0)
|
|
|
(78.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
|
210.6
|
|
|
865.6
|
|
|
812.3
|
|
|
890.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
$
|
221.3
|
|
$
|
812.3
|
|
$
|
221.3
|
|
$
|
812.3
|
2023 ANNUAL REPORT
The Company's audited consolidated financial statements and the
notes thereto for the fiscal year ended May
6, 2023 and MD&A for the fiscal year ended May 6, 2023, which includes discussion and
analysis of results of operations, financial position and cash
flows will be available today, June 22,
2023. These documents can be accessed through the Investor
Centre section of the Company's website at www.empireco.ca and also
at www.sedar.com.
The Company's 2023 Annual Report will be available on or about
July 28, 2023 and can be accessed
through the Investor Centre section of the Company's website at
www.empireco.ca and also at www.sedar.com.
ABOUT EMPIRE
Empire Company Limited (TSX: EMP.A) is a Canadian company
headquartered in Stellarton, Nova
Scotia. Empire's key businesses are food retailing, through
wholly-owned subsidiary Sobeys Inc., and related real estate. With
approximately $30.5 billion in annual
sales and $16.5 billion in assets,
Empire and its subsidiaries, franchisees and affiliates employ
approximately 131,000 people.
Additional financial information relating to Empire, including
the Company's Annual Information Form, can be found on the
Company's website at www.empireco.ca or on SEDAR at
www.sedar.com.
SOURCE Empire Company Limited