RBC maintains Empire stock rating, price target at CAD$50

March 14, 2025 12:49 AM AEDT | By Investing

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RBC maintains Empire stock rating, price target at CAD$50

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Investing.com -- On Thursday, RBC (TSX:RY) Capital Markets analyst Irene Nattel reaffirmed its Sector Perform rating for Empire Company Ltd (TSX:EMPa), maintaining a price target of CAD$50.00 and expressing a neutral sentiment towards the company's stock. Empire received this stable outlook despite the announcement that its Chief Financial Officer, Matt Reindel, will retire in May, as RBC stated that an orderly transition seems to be in place.

The company's third-quarter results for fiscal year 2025, which ended on February 1st, aligned with forecasts, showcasing solid merchandising strategies aimed at catering to consumers seeking value. Empire Company Limited has continued to focus on maximizing revenues in its full-service offerings, even as consumers increasingly turn to discount channels. The adjusted earnings per share (EPS) for the quarter stood at $0.62, in line with both the forecast and updated consensus. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $565 million, slightly above the consensus estimate of approximately $559 million.

Empire's food retail same-store sales (SSS) excluding fuel increased by 2.6%, surpassing the forecasted 1.8% and consensus of 2.1%. This performance is noteworthy when compared to its peers, such as Loblaw (TSX:L), which reported a 2.5% increase in SSS for its 12-week fourth fiscal quarter ending December 28th, and Metro (TSX:MRU), which saw a 1.0% rise in SSS for its 12-week first fiscal quarter ending December 21st. The report also highlighted Empire's positive sales performance across its various retail banners.

E-commerce sales for Empire soared by 72%, driven by new partnerships with Instacart (NASDAQ:CART) and Uber (NYSE:UBER) Eats that have generated additional demand. The company's online grocery delivery service, Voilà, is estimated to continue its double-digit growth trajectory as seen in previous quarters.

Empire Company Limited's financial guidance for the fiscal year 2025 remains unchanged, signaling a steady course ahead despite the upcoming change in its CFO position. The company has assured that there will be an orderly transition as the current CFO, Matt Reindel, prepares to step down.

This article first appeared in Investing.com

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