Thursday, September 14, 2017
Empire Company same-store sales and adjusted net earnings improved in the first quarter of fiscal 2018 with same-store sales increasing 0.5 per cent and net earnings increasing 18.9 per cent.
A 1.4 per cent sales increase for the first quarter is being attributed to higher same-store sales in most areas of the country. Increases in traffic, basket size and more disciplined pricing strategies drove the improvements.
“We are encouraged by our first quarter results. Stabilizing margins, good cost control, and an increase in same-store sales combined with our important transformational work of Project Sunrise gives us a level of optimism not seen in the business for some time,” said Michael Medline, president and CEO, Empire Company Limited. “Having said that, we must continue the heavy lifting of Project Sunrise, while beginning to make important strides in our brand and customer experience. We still have a lot of work ahead of us to thrill our customers and improve our bottom line.”
Project Sunrise, a three-year cost reduction project launched in fiscal 2017, is expected to result in $500 million in annualized cost savings by fiscal 2020. The company is expected to realize $200 million in one-time costs related to severances, relocation and consulting, most of which is expected to be incurred in the first half of fiscal 2018.
The company notes it has developed plans to mitigate the pending minimum wage increases in Ontario and Alberta that could cost Empire Company approximately $25 million in fiscal 2018 and $70 million in fiscal 2019.