Earnings per share ("EPS") of $0.61 and adjusted EPS(1) of $0.63 Prior year EPS and adjusted EPS of $0.72 Same-store sales, excluding fuel, increased by 0.2% Gross margin, excluding fuel, increased by 68 basis points Accelerating Voilà's path to profitability, including pausing the timing of the fourth CFC Repurchased $400 million of shares in fiscal 2024 Capital allocation outlook for fiscal 2025: Declared a dividend increase of 9.6% Renewed NCIB with the intention to repurchase approximately $400 million of shares Capital investment program expected to be approximately $700 million STELLARTON, NS, June 20, 2024 /CNW/ - Empire Company Limited ("Empire" or the "Company") (TSX:EMP) today announced its financial results for the fourth quarter and full year ended May 4, 2024. For the quarter, the Company recorded net earnings of $148.9 million ($0.61 per share) compared to $182.9 million ($0.72 per share) last year. For the quarter, the Company recorded adjusted net earnings of $154.0 million ($0.63 per share) compared to $184.9 million ($0.72 per share) last year. "I am pleased with the way our team is executing our strategy despite the currently inhospitable economic backdrop," said Michael Medline, President & CEO, Empire. "Our results this quarter clearly demonstrate that we have become a disciplined, efficient grocer with strong gross margin control as well as capital and SG&A discipline, propelled by our productivity initiatives and restructuring. When you remove our real estate related income, quarterly results were consistent with the prior year. We are committed to driving profits, including taking proactive steps to improve the bottom-line results of Voilà. At the same time, we remain committed to returning capital to our investors. "We remain very optimistic about our Voilà business today as reflected in its strong Q4 same-store sales growth of 17.3% and are confident and committed in its future success," Mr. Medline stated. "We continue to look at every opportunity to improve our overall profitability and each Voilà CFC takes time to become profitable; as a result, we will pause the opening of our fourth customer fulfillment centre in Vancouver, allowing us to focus on driving performance and volume in our three active CFCs. We are also working with our partner, Ocado, to decrease costs and provide increased flexibility to serve our customers more broadly, which includes ending our mutual exclusivity agreement." Dividend Declaration The Company declared a quarterly dividend of $0.20 per share on both Non-Voting Class A shares ("Class A shares") and Class B common shares, that will be payable on July 31, 2024 to shareholders of record on July 15, 2024. This reflects an increase in the annualized dividend rate of 9.6%. These dividends are eligible dividends as defined for the purposes of the Income Tax Act (Canada) and applicable provincial legislation. (1) Adjusted Metrics include adjusted operating income, adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted net earnings, and adjusted EPS. On November 4, 2022, Empire experienced IT system issues related to the "Cybersecurity Event". The Company is excluding from its Adjusted Metrics: costs incurred to plan and implement strategies to optimize the organization and improve efficiencies, insurance recoveries related to the Cybersecurity Event and one-time costs associated with the integration of Grocery Gateway into Voilà. See "Non-GAAP Financial Measures & Financial Metrics" section of this News Release. Normal Course Issuer Bid ("NCIB") On June 19, 2024, the Company renewed its NCIB by filing a notice of intention with the Toronto Stock Exchange ("TSX") to purchase for cancellation up to 12,800,000 Class A shares representing approximately 9.9% of the public float of 129,904,937 Class A shares as of June 18, 2024, subject to regulatory approval. As of June 18, 2024, there were 143,472,652 Class A shares issued and outstanding. The Company intends to repurchase approximately $400.0 million of Class A shares in fiscal 2025. 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, 2024 and shall terminate not later than July 1, 2025. Based on the average daily trading volume ("ADTV") of 379,939 shares over the last six months, daily purchases will be limited to 94,984 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, 2023 and expires on July 1, 2024, the Company received approval from the TSX to purchase up to 12,600,000 Class A shares representing approximately 9.0% of the public float of Class A shares outstanding as of June 19, 2023. As of June 18, 2024, the Company has purchased 9,495,893 shares through the facilities of the TSX at a weighted average price of $35.37 for a total consideration of approximately $335.8 million under the NCIB that commenced July 2, 2023 and expires on July 1, 2024. Shares purchased are shown in the table below: 13 Weeks Ended 52 Weeks Ended ($ in millions, except per share amounts) May 4, 2024 May 6, 2023 May 4, 2024 May 6, 2023 Number of shares 3,010,237 3,110,280 11,301,318 9,444,902 Weighted average price per share $ 33.31 $ 35.91 $ 35.40 $ 37.06 Cash consideration paid $ 100.3 $ 111.7 $ 400.1 $ 350.0 Company Priorities Since fiscal 2017, 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 Stores: Over recent years, the Company has accelerated investments in renovations, conversions, and new stores along with store processes, communications, training, technology and tools. 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 on track with its plan to renovate approximately 20% to 25% of the network between fiscal 2024 and fiscal 2026. This capital investment includes important sustainability initiatives such as refrigeration system upgrades and other energy efficiency initiatives. Enhanced Focus on Digital and Data: The focus on digital and data will include continued e-commerce growth with Voilà, personalization, loyalty, through Scene+ (see "Business Updates – Voilà" and "Business Updates – Scene+" for more information), 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. Enhancing digital and data capabilities will allow the Company to deliver the best personalized experiences to elevate its in-store and e-commerce experience for its customers. 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. The Company will continue to focus on driving efficiency and cost effectiveness through initiatives related to sourcing of goods not for resale, supply chain productivity and the organizational structure. In addition, the Company is pursuing cost savings in the Voilà business by pausing the opening of its fourth Customer Fulfillment Centre ("CFC") and ending its mutual exclusivity with Ocado, amongst other initiatives. SUMMARY RESULTS - FOURTH QUARTER & FISCAL YEAR ($ in millions, except per 13 Weeks Ended $ 52 Weeks Ended $ share amounts) May 4, 2024 May 6, 2023 Change May 4, 2024 May 6, 2023 Change Sales $ 7,411.5 $ 7,408.4 $ 3.1 $ 30,732.6 $ 30,478.1 $ 254.5 Gross profit(1) 2,005.1 1,959.0 46.1 8,070.4 7,792.7 277.7 Operating income 291.3 321.6 (30.3) 1,310.8 1,232.4 78.4 Adjusted operating income(1) 297.7 328.1 (30.4) 1,257.1 1,291.5 (34.4) EBITDA(1) 556.6 592.3 (35.7) 2,381.5 2,263.0 118.5 Adjusted EBITDA(1) 563.0 598.8 (35.8) 2,327.8 2,322.1 5.7 Net earnings(2) 148.9 182.9 (34.0) 725.2 686.0 39.2 Adjusted net earnings(1)(2)(3) 154.0 184.9 (30.9) 681.6 727.1 (45.5) Diluted earnings per  share EPS(2) $ 0.61 $ 0.72 $ (0.11) $ 2.92 $ 2.64 $ 0.28 Adjusted EPS(1)(2)(3) 0.63 0.72 (0.09) 2.74 2.80 (0.06) Diluted weighted average number of shares outstanding (in millions) 243.7 255.4 248.4 259.4 Dividend per share $ 0.1825 $ 0.1650 $ 0.73 $ 0.66   13 Weeks Ended 52 Weeks Ended May 4, 2024 May 6, 2023 May 4, 2024 May 6, 2023 Gross margin(1) 27.1 % 26.4 % 26.3 % 25.6 % EBITDA margin(1) 7.5 % 8.0 % 7.7 % 7.4 % Adjusted EBITDA margin(1) 7.6 % 8.1 % 7.6 % 7.6 % Same-store sales(1) (decline) growth (0.3) % 1.6 % 1.3 % 2.3 % Same-store sales growth(1), excluding fuel 0.2 % 2.6 % 2.0 % 1.5 % Effective income tax rate 28.3 % 25.3 % 25.8 % 24.6 % (1) See "Non-GAAP Financial Measures & Financial Metrics" section of this News Release for a description of the types of costs and recoveries included. (2) Attributable to owners of the Company. (3) See "Adjusted Impacts on Net Earnings" section of this News Release. Sales Sales for the quarter ended May 4, 2024 were consistent with the prior year with positive growth across the business, particularly in FreshCo, Voilà and Farm Boy, offset by lower fuel sales mainly driven by the sale of the retail sites in Western Canada ("Western Canada Fuel Sale") which occurred in the first quarter of fiscal 2024. Sales for the fiscal year ended May 4, 2024 increased 0.8%, primarily driven by positive growth across the business, including both Discount and Full-Service. This increase was offset by lower fuel sales mainly driven by the Western Canada Fuel Sale. Gross Profit Gross profit for the quarter ended May 4, 2024 increased by 2.4% mainly as a result of business expansion (Voilà, Farm Boy and FreshCo), strong performance and operational discipline in Full-Service banners. Gross margin for the quarter ended May 4, 2024 increased to 27.1% from 26.4% in the prior year, primarily as a result of strong execution in Full-Service banners from several targeted initiatives aimed at improving promotional mix and closely managing shrink and inventory, as well as business expansion (Voilà, Farm Boy, and FreshCo) and continued implementation of efficiencies in distribution resulting in lower supply chain costs. Gross margin, excluding the mix impact of fuel, increased by 68 basis points. Gross profit for the fiscal year ended May 4, 2024 increased by 3.6% primarily as a result of business expansion (FreshCo, Farm Boy, and Voilà) and the increase in sales in both the Discount and Full-Service banners. Gross margin for the fiscal year ended May 4, 2024 increased to 26.3% from 25.6% in the prior year, primarily as a result of the mix impact of lower fuel sales, strong execution in operations, including a focus on improved shrink management, and lower distribution costs related to efficiency initiatives in supply chain. Gross margin, excluding the mix impact of fuel, increased by 43 basis points. Operating Income  13 Weeks Ended $ 52 Weeks Ended $ ($ in millions) May 4, 2024 May 6, 2023 Change May 4, 2024 May 6, 2023 Change Food retailing $ 280.6 $ 304.5 $ (23.9) $ 1,265.0 $ 1,140.1 $ 124.9 Investments and other operations: Crombie REIT(1) 11.9 10.9 1.0 43.5 77.3 (33.8) Real estate partnerships 3.6 6.5 (2.9) 12.8 16.5 (3.7) Other operations, net of corporate expenses (4.8) (0.3) (4.5) (10.5) (1.5) (9.0) 10.7 17.1 (6.4) 45.8 92.3 (46.5) Operating income $ 291.3 $ 321.6 $ (30.3) $ 1,310.8 $ 1,232.4 $ 78.4 Adjustments: Western Canada Fuel Sale(2) - - - (90.8) - (90.8) Cybersecurity Event(2) (14.1) (6.8) (7.3) (35.1) 45.8 (80.9) Grocery Gateway Integration(2) - 13.3 (13.3) - 13.3 (13.3) Restructuring(2) 20.5 - 20.5 72.2 - 72.2 6.4 6.5 (0.1) (53.7) 59.1 (112.8) Adjusted operating income(3) $ 297.7 $ 328.1 $ (30.4) $ 1,257.1 $ 1,291.5 $ (34.4) (1) Crombie Real Estate Investment Trust ("Crombie REIT"). (2) See "Non-GAAP Financial Measures & Financial Metrics" section of this News Release for a description of the types of costs and recoveries included. (3) See "Non-GAAP Financial Measures & Financial Metrics" section of this News Release. For the quarter ended May 4, 2024, operating income from the Food retailing segment decreased mainly due to higher selling and administrative expenses and a decrease in other income, partially offset by higher sales and gross profit. Selling and administrative expenses increased primarily as a result of continued investment in business expansion (including Voilà, Farm Boy and FreshCo), higher retail labour costs driven by wage rate increases, increased investments in the store network, tools, technology and projects to support the Company's strategic initiatives. These increases were partially offset by a decrease in compensation accruals in the current year and lower depreciation and amortization. For the quarter ended May 4, 2024, operating income from the Investments and other operations segment decreased primarily as a result of higher corporate expenses. For the fiscal year ended May 4, 2024, operating income from the Food retailing segment increased mainly due to higher sales, gross profit and other income, partially offset by higher selling and administrative expenses. Selling and administrative expenses increased primarily as a result of continued investment in business expansion (Voilà, Farm Boy and FreshCo), higher retail labour costs driven by wage rate increases, restructuring costs, increased focused investments in the store network, tools, technology and projects to support the Company's strategic initiatives, and higher depreciation and amortization. These increases were partially offset by the net cost recoveries in the current year compared to net costs in the prior year related to the Cybersecurity Event. For the fiscal year ended May 4, 2024, operating income from the Investments and other operations segment decreased primarily as a result of lower equity earnings from Crombie REIT, mainly due to fewer property sales in the current year. EBITDA For the quarter ended May 4, 2024, EBITDA decreased to $556.6 million from $592.3 million in the prior year mainly as a result of the same factors affecting operating income (which excludes the decrease in depreciation and amortization). EBITDA margin decreased to 7.5% from 8.0% in the prior year. For the fiscal year ended May 4, 2024, EBITDA increased to $2,381.5 million from $2,263.0 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 7.7% from 7.4% in the prior year. 13 Weeks Ended $ 52 Weeks Ended $ ($ in millions) May 4, 2024 May 6, 2023 Change May 4, 2024 May 6, 2023 Change EBITDA(1) $ 556.6 $ 592.3 $ (35.7) $ 2,381.5 $ 2,263.0 $ 118.5 Adjustments: Western Canada Fuel Sale(2) - - - (90.8) - (90.8) Cybersecurity Event(2) (14.1) (6.8) (7.3) (35.1) 45.8 (80.9) Grocery Gateway Integration(2) - 13.3 (13.3) - 13.3 (13.3) Restructuring(2) 20.5 - 20.5 72.2 - 72.2 6.4 6.5 (0.1) (53.7) 59.1 (112.8) Adjusted EBITDA(1) $ 563.0 $ 598.8 $ (35.8) $ 2,327.8 $ 2,322.1 $ 5.7 (1) See "Non-GAAP Financial Measures & Financial Metrics" section of this News Release. (2) See "Non-GAAP Financial Measures & Financial Metrics" section of this News Release for a description of the types of costs and recoveries included. Income Taxes The effective income tax rate for the quarter ended May 4, 2024, was 28.3% compared to 25.3% last year. The effective tax rate is higher than the statutory rate primarily due to changes in tax rates and the revaluation of tax estimates, not all of which are recurring, partially offset by the benefits of investment tax credits. The effective tax rate in the same quarter last year was lower than the statutory rate primarily due to the revaluation of tax estimates, not all of which are recurring. The effective income tax rate for the fiscal year ended May 4, 2024, was 25.8% compared to 24.6% 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 and the benefits of investment tax credits. The effective tax rate in the prior year was lower than the statutory rate primarily due to the revaluation of tax estimates, not all of which were recurring, non-taxable capital items, and consolidated structured entities which are taxed at lower rates. Net Earnings ($ in millions, except 13 Weeks Ended $ 52 Weeks Ended $ per share amounts) May 4, 2024 May 6, 2023 Change May 4, 2024 May 6, 2023 Change Net earnings(1) $ 148.9 $ 182.9 $ (34.0) $ 725.2 $ 686.0 $ 39.2 EPS (fully diluted)(4) $ 0.61 $ 0.72 $ (0.11) $ 2.92 $ 2.64 $ 0.28 Adjustments:(2) Western Canada Fuel Sale(3) - - - (71.5) - (71.5) Cybersecurity Event(3) (10.4) (5.0) (5.4) (25.9) 34.1 (60.0) Grocery Gateway Integration(3) - 7.0 (7.0) - 7.0 (7.0) Restructuring(3) 15.5 - 15.5 53.8 - 53.8 5.1 2.0 3.1 (43.6) 41.1 (84.7) Adjusted net earnings(1)(4)(5) $ 154.0 $ 184.9 $ (30.9) $ 681.6 $ 727.1 $ (45.5) Adjusted EPS (fully diluted)(4) $ 0.63 $ 0.72 $ (0.09) $ 2.74 $ 2.80 $ (0.06)