Empire Company: Operational Improvements Driving Margin Growth

2025-02-08 08:04:40 ET

Summary

• Empire has shown operational improvements and margin growth, but shares are less compelling now due to valuation rerating and reduced discount to peers.
• Q2 ’25 results were mixed with 0.3% revenue growth, 3.0% gross profit increase, and 4.2% adjusted EBITDA rise, driven by cost-cutting and supply chain enhancements.
• Management targets 8%-11% long-term EPS growth through sales, margin expansion, and share repurchases, but achieving this depends on successful execution of cost initiatives.
• Despite a 20% total return since June 2024, Empire trades at a discount to peers due to cyclical business nature and heavy capex plans, warranting a cautious outlook.

Please note all $ figures in , not , unless otherwise stated.

Introduction

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