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Investing.com - RBC Capital has reiterated its Sector Perform rating and C$61.00 price target on Empire Co Ltd. (TSX:EMP.A) (OTC:EMLAF), citing the company’s Q1/F26 results that aligned with revised forecasts.
The Canadian food retailer demonstrated ongoing stabilization of consumer value-seeking behavior, according to RBC Capital. Empire is executing its strategy to maximize revenues in full-service stores while growing its discount presence.
The company is improving gross margin management through better product mix, lower shrink, and tighter execution, while simultaneously controlling costs across its operations.
RBC Capital noted that improving market conditions are encouraging for Empire, which owns grocery chains including Sobeys, Safeway, and FreshCo. However, the firm maintained its view that shifts in consumer behavior favoring Empire’s full-service positioning will likely be modest and gradual.
The cautious outlook stems from the current uncertain macroeconomic backdrop and accelerating food Consumer Price Index (CPI), factors that continue to influence shopping patterns in the Canadian grocery sector.
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