Empire Company Limited

Good morning, ladies and gentlemen, and welcome to the Empire Company first quarter F27 conference call. At this time, all lines are now in ceremony mode. Following the presentation, we'll come back to question and answer sessions for our analysts only. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, September 10th, 2026. I would now like to turn the conference over to Katie Brine. Please go ahead.

Thank you, Julie. Good morning and thank you for joining us today for Empire's first quarter fiscal 2027 conference call. Today we will provide summary comments on our results and then open the call for questions. This call is being recorded and the audio recording will be available on the company's website at empireco.ca. There is a short summary document outlining the points of our quarter available on our website as well. Joining me on the call this morning are Pierre St-Laurent, President and Chief Executive Officer, Costa Pefanis, Chief Financial Officer, and Luc Marchavec, Chief Customer Officer. Before we begin, I would remind you that today's discussion includes forward-looking statements. We caution that these statements are based on management's assumptions and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially. I refer you to our news release and MD&A for more information on these assumptions and factors. With that, I'll turn the call over to Pierre.

Thanks, Katie. Good morning, everyone. We delivered a strong first quarter, driven by disciplined execution across the business and continued progress against our strategic priorities. Despite the market environment that remains challenging, with customers highly focused on overall value and affordability, our banners continue to perform well. We delivered a record high first quarter EPS of $1.04, up 14.3% year over year. This performance reflects improvement in our core business and benefits from our cost efficiency initiatives. Our Q1 results reflect the strength of our underlying operation, as well as the focus we have placed on productivity, efficiency, and discipline execution across the organization. I'll focus on three topics today. Our first quarter results and market trends, an update on our strategic priorities and growth initiatives, and our new leadership appointment. Starting with Q1 results, food sales grew 1.7% with same-store sales up 1.2. This reflects positive growth in both our full-service and discount businesses. Total e-commerce sales across our platforms and third-party partnerships increased 11.3% year-over-year. Gross margin excluding fuel was essentially flat year-over-year. That was in line with our expectation given strong prior year comparison, higher supply chain cost and elevated fuel-related expenses during the quarter. Despite those headwinds, we were pleased with the performance of the core business. We were also pleased with our cost efficiency during the quarter. The improvements we are seeing reflect the benefit of our multi-year focus on productivity and efficiency across the organization. This was our third consecutive quarter with operating leverage. Costa will provide more details on the drivers. Turning to the current environment, internal inflation remained below stat-can food CPI during the quarter. reflecting our continued focus on delivering value for customers while managing supplier cost increases in a disciplined manner. The market environment remained challenging and consumer continued to be focused on value and affordability given fuel price volatility and ongoing trade-related uncertainty. Across North America, retailers are reporting a more cautious customer environment as we are seeing many of the same trends here in Canada. Against this backdrop, we are pleased to be gaining share in full service while maintaining our position in discount, despite the rapid expansion of discount formats across the market. As we continue to expand discount footprint, we expect that growth to increasingly support market share gains in the channel. The recent escalation in the Canada and US trade tension has also increased customer interest in supporting Canadian businesses and products, which is something we are equally passionate about. While purchasing decisions will continue to be driven by value, quality, and convenience, we believe our deep Canadian roots Long-standing relationship with Canadian suppliers and portfolio of locally operated banners position us well to serve customers in this environment. As a proud Canadian company, we will continue to invest meaningfully across the country through new stores, new jobs, local supplier partnership, and the ongoing growth of our business to help our country become stronger. Against this backdrop, our priorities are unchanged. Delivering value for customer, maintaining operational discipline, and executing with focus against our priorities. We continue to increase momentum across our four strategic priorities, customer, stores, growth, and cost efficiency. We have already touched on cost efficiency, so I spent a few minutes sharing an update on the other three. Starting with customers. Our investment in customer value are resonating. We are seeing very encouraging improvement in price perception and growing recognition in the value of the label across all of our banners. In the current environment, we continue to strengthen our value proposition through promotions, loyalty, own brand, personalization, and our value size offers. We are encouraged by the progress we are seeing in our customer data and remain committed to delivering value, appealing value whether you are shopping at Sobeys, Freshco, Safeway, IGA, Famboy, Longo's, Guala and any other banners. Turning to stores, we continue to invest in our store network to support long-term growth. We opened four new stores during Q1, plus the addition of four Merin stores. We now expect to complete more than 25 new stores this year, are from our prior expectation of more than 20. We are pleased with the performance of recently opened stores. We are meeting or exceeding our expectation and reinforcing our confidence in the strength on our growth pipeline. These investments are now expecting to deliver approximately 2% square footage growth and strengthen our ability to serve customers across the country. We continue to evolve our approach to real estate, balancing new store growth with opportunity to optimize our existing network and improve capital efficiency. While our real estate strategy continues to evolve, our investment discipline remains the same. We pursue attractive white space opportunities and deploy capital where we believe it will generate the highest return for shareholders. and we continue to focus on making our store more efficient and customer focused. This includes the continued rollout of electronic shelf labels with over 400 stores now live across the country, as well as initiative to enhance in-store signage, improve store condition and evolve our ways of working to spend less time on manual tasks and more time focused on customers. On growth, we have accomplished a lot since we last spoke, and this remains a top priority for us. A key milestone in our discount expansion strategy was the opening of our first fresh cold store in Atlantic Canada in August, and early customer response are very encouraging. We also completed the Méran acquisition in June, and in August, broke ground for a new Méran location in Trois-Rivières, Québec. While we're still in early stage of the integration, we are excited about the opportunity ahead and the potential to expand this business. We continue to grow our store footprint, and just in the last month, opened two new Fresco stores in Calgary, a new IGX from Montreal, a new IG in Edmonton, a new Safeway in Vancouver Oak Ridge Park development, and a new Fresco in Paris on Trail. These openings reflect the strength of our growth pipeline and our commitment to serving more customers in communities across Canada. We also continue to strengthen our pharmacy business, which remains an attractive growth platform for Empire. In August, we welcome Neetu Singh, our new SVP Pharmacy. Neetu, who reports to our Chief Pharmacy and Development Officer, Doug Nathanson, brings more than 20 years of industry experience and has already hit the ground running. Last month, we announced the acquisition of nine more release pharmacies co-located with Longo Stores in Ontario. These pharmacies will be integrated into our national pharmacy operations and rebranded as Longo's Pharmacy. While the acquisition is modest in size, strategically, it is important. It expands our network and market where we already have strong customer relationships and reflect our disciplined approach to growing this business through both organic initiatives and targeted acquisitions. Finally, I'm pleased to welcome Lara Skripitsky to EMPIRE's Executive Leadership Team A as our new Chief Technology and Transformation Officer. With more than 20 years of experience, most recently having spent 12 years in a leading global consumer brand, Lara brings a proven track record of driving transformation Modernizing Technology Platform and Enhancing the Customer Experience. Julia Knox will work closely with Lara to ensure a seamless transition. Overall, this first quarter reinforces our confidence in both our strategy and outlook for the year ahead. Our banners are competing effectively, our growth initiatives are gaining traction, and our focus on productivity and efficiency is delivering results. As a result, we continue to expect adjusted EPS growth in the I.N. of our long-term financial framework in fiscal 27. Our focus remains very clear, delivering value for customers, driving sustainable growth, and strengthening our business for the long term. With a strong start to the year, we remain well positioned to deliver an attractive return to our shareholders, Dynamic environments create opportunity for strong operators to differentiate themselves, and that is what we will continue to do. With that, I'll turn the call over to Costa.