A breakdown of the numbers behind Sobeys' parent company's first quarter, the two deals it closed alongside them, and what the results say about Canadian grocery spending.
Empire Company Q1 earnings climbed to $233 million for the quarter ended August 1, 2026, a 9.9% increase over the $212 million the Stellarton, Nova Scotia-based grocery operator posted in the same period a year earlier. The company, best known nationally as the parent of Sobeys, reported the results on September 10, 2026, in what was also the first full quarter under new President and Chief Executive Officer Pierre St-Laurent.
Sales for the quarter reached $8.475 billion, up 2.6% year over year, while operating income rose 7.6%. Earnings per share came in at $1.04, compared with $0.91 a year ago — a 14.3% increase that outpaced the growth in total net earnings. Alongside the numbers, Empire confirmed it had closed its acquisition of Québec food retailer Mayrand Food Group and announced an agreement to acquire nine Morelli’s pharmacies operating inside Longo’s stores in the Greater Toronto and Hamilton areas.
The Numbers Behind the $233 Million Quarter
The headline figures point to a quarter in which profitability grew faster than the top line. Sales rose 2.6%, but operating income advanced 7.6% and net earnings 9.9% — a pattern that typically indicates margin improvement or tighter cost control rather than a surge in volume.
| Measure | Q1 FY2027 (ended Aug 1, 2026) | Prior-year quarter | Change |
|---|---|---|---|
| Net earnings | $233 million | $212 million | +9.9% |
| Earnings per share | $1.04 | $0.91 | +14.3% |
| Sales | $8.475 billion | Not specified | +2.6% |
| Operating income | Not specified | Not specified | +7.6% |
| Food same-store sales | Not specified | Not specified | +1.2% |
Empire did not break out, in the results summarized here, the dollar value of operating income or the composition of the sales increase between existing stores, new locations and acquired businesses. Those line items are Not specified in the figures released.
Why Earnings Per Share Grew Faster Than Profit
The 4.4-percentage-point gap between the 9.9% rise in net earnings and the 14.3% rise in earnings per share is the kind of detail worth pausing on. Arithmetically, per-share growth can only exceed total earnings growth when the number of shares outstanding falls — most commonly through share repurchases.
Empire has not, in the results reported here, attributed the gap to any specific cause, and the precise driver is Not specified. As general market context, Canadian grocers and other mature, cash-generative retailers frequently run buyback programs alongside dividends as a way to return capital, which has the mechanical effect of lifting per-share figures. Readers should treat the connection as an explanation of the arithmetic rather than a confirmed company disclosure.
Food Same-Store Sales Up 1.2% in a Cautious Consumer Market
Same-store sales — sales at locations open at least a year, stripped of the effect of new or acquired stores — rose 1.2% in food. It is the cleanest read in the release on underlying demand, and it tells a story of steady rather than spectacular growth.
That modest figure sits against a backdrop in which Canadian households have spent two years adjusting to elevated food prices and higher borrowing costs. Grocery is defensive by nature: people keep eating regardless of the cycle. What changes in a squeezed market is where and how they shop — a shift toward discount banners, private-label products, smaller baskets and more frequent trips.
Monetary policy is part of that picture. The Bank of Canada’s recent decision to hold its policy rate at 2.25% shapes how much room households have left after debt servicing, which in turn shapes discretionary spending inside a grocery store — the premium cuts, the prepared foods, the impulse aisle.
Pierre St-Laurent’s First Scorecard as President and CEO
The quarter carries added weight because it is an early public marker for Pierre St-Laurent, who has taken over as President and Chief Executive Officer. In commenting on the results, St-Laurent pointed to disciplined execution and progress against the company’s strategic priorities as the drivers of the performance.
Leadership transitions at large Canadian retailers are watched closely for signals about direction: whether the incoming executive doubles down on the existing plan, reweights toward discount formats, accelerates or slows store development, or reshapes the loyalty and e-commerce strategy. A first quarter that beats the prior year on profitability buys a new chief executive time and credibility, though it is a single data point rather than a trend.
The specific contents of Empire’s strategic priorities, and any changes St-Laurent intends to make to them, are Not specified in the results reported here.
The Mayrand Food Group Acquisition Closes in Québec
Empire confirmed that it has completed its acquisition of Mayrand Food Group, a Québec-based food retailer. The purchase price, store count and expected contribution to future results were not disclosed in the information reported here.
The deal matters strategically for a few reasons worth spelling out for readers who do not follow grocery consolidation closely:
- Québec is a distinct market: The province has its own banner loyalties, language requirements and supplier relationships, and national chains generally compete there through locally rooted formats rather than importing a single template.
- Format diversity is a hedge: Adding a differently positioned banner gives an operator another way to capture shoppers who are trading down or shopping differently, without cannibalizing the core network.
- Acquired sales flow outside same-store metrics: Revenue from newly acquired stores lifts total sales but does not appear in the same-store sales figure, which is why the 2.6% total sales gain and the 1.2% food same-store gain differ.
Nine Morelli’s Pharmacies Become Longo’s Pharmacy Locations
The second transaction announced with the results is smaller in dollar terms but strategically revealing. Empire has agreed to acquire nine Morelli’s pharmacies that currently operate inside Longo’s stores across the Toronto and Hamilton areas, with the intention of converting them to Longo’s Pharmacy locations.
In practical terms, this brings pharmacy counters that were already physically inside the grocery stores under the retailer’s own banner. Financial terms and the expected timing of the conversions are Not specified.
As general industry context, pharmacy is one of the most valuable adjacencies in grocery retail. Prescription customers return on a predictable schedule, typically carry higher basket values on those trips, and give the retailer a reason to build a direct health-services relationship. Owning rather than leasing that counter gives the operator control over pricing, staffing, loyalty integration and data — the reasons grocery chains across North America have steadily brought in-store pharmacy under their own banners.
What Empire Company Q1 Earnings Signal for the Canadian Grocery Sector
Read together, the quarter sketches a familiar playbook among Canada’s large grocers: grow modestly on existing stores, buy growth where a regional operator fits, and widen margins by controlling costs and capturing adjacent services like pharmacy.
For investors, the standout is that profit and operating income are both growing faster than sales — an operating-leverage story rather than a volume story. For shoppers, a 1.2% same-store gain in food suggests price growth has cooled considerably from the peaks of recent years, though it does not mean prices have fallen.
The sector also sits inside a broader policy environment that is shifting. Supply chains, tariffs and trade frameworks all feed into food costs, and Canada’s evolving trade posture — including the recent offer of EU associate member status — will influence sourcing options and input costs for food retailers over the coming years.
One further note for readers parsing the figures: Empire’s quarter ended August 1, 2026, meaning the reporting period covers late spring and mid-summer trading. Grocery results are seasonal, and a first quarter is not directly comparable to the holiday-heavy quarters later in a retailer’s year.
The figures above are drawn from Empire Company’s reported first-quarter results. This article is business journalism, not investment advice; anyone making financial decisions should consult the company’s full audited filings and a qualified advisor.
