Empire Co. has posted its results for the fourth quarter of fiscal 2019.
Gross profit increased by 8.7 and 3.1 per cent for the fourth quarter and fiscal year ended May 4, 2019, respectively. These increases are a result of higher sales, the incorporation of Farm Boy results and benefits from the initial rollout of the category reset program. They were partially offset by store closures in Western Canada and lower margins in the pharmacy business.
Same-store sales excluding fuel were up 3.8 per cent for the quarter (and 2.7 per cent for fiscal 2019), driven by stronger performance across the business, the incorporation of Farm Boy results and increased fuel prices.
The food retailing segment posted improved earnings due to higher sales and improved margins, contributing the lion’s share of a 75.6 per cent increase in operating income for the fourth quarter.
Empire plans to invest approximately $600 million in its operations during fiscal 2020. This estimate includes capital estimates of approximately $70 million related to expansion of the Farm Boy store network in Ontario.
Empire says its Project Sunrise corporate transformation will likely yield benefits above management's initial expectations. Empire realized approximately $100 million of benefits during fiscal 2018 through organizational design, strategic sourcing cost reductions and improvements in store operations. In fiscal 2019, it realized a further approximate $200 million of benefits. For fiscal 2020 – the project’s final year – management expects to achieve at least $250 million of benefits for a cumulative benefit of at least $550 million, ahead of original projections for the three-year program.