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Loblaw Companies Ltd L
Q3 2012 Earnings Call Transcript

Transcript Call Date 11/14/2012

Operator: Good morning. My name is Denise, and I will be your conference operator today. At this time, I would like to welcome everyone to the Loblaw's Third Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you.

Kim Lee, Vice President of Investor Relations, please go ahead.

Kim Lee - VP, IR: Thanks Denise. Good morning and welcome to the Loblaw Companies Limited third quarter 2012 conference call. This call is also being webcast simultaneously on our website at loblaw.ca. I'm joined here this morning by Galen G. Weston, Executive Chairman; Vicente Trius, President; and Sarah Davis, Chief Financial Officer.

Before we begin today's call, I want to remind you that the discussions will include forward-looking statements, such as the Company's beliefs and expectations regarding certain aspects of its financial performance in 2012 and future years. These statements are based on certain assumptions and reflect management's current expectations, and they are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. These risks and uncertainties are discussed in the Company's materials filed with the Canadian securities regulators from time-to-time, including the Company's Annual Report and third quarter 2012 report. Any forward-looking statements speak only as of the date they are made. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.

Certain non-GAAP financial measures may be discussed or referred to today. Please refer to our third quarter reports and other materials filed with the Canadian Securities Regulators from time-to-time for reconciliation of each of these measures to the most directly comparable GAAP financial measures. An archive of this conference call will be available on our website.

With that, I'll turn the call over to Galen Weston.

Galen G. Weston - Executive Chairman: Good morning and thank you for joining us. In the third quarter the team executed the plan. Targeted investments in the customer proposition are delivering clear results. The infrastructure program remains on track and planned efficiencies are beginning to come through. We're pleased with the fundamental progress to-date. The dividend increase announced this morning reflects the Board's confidence that management's long-term strategy will build shareholder value over time.

Now, I'll turn the call over to, Sarah to walk us through the results.

Sarah R. Davis - CFO: Thank you, Galen, and good morning. Let me start with the performance in our Retail segment; Retail sales increased by 0.7% to C$9.6 billion in the third quarter of 2012; same-store sales decreased by 0.2%. Modest growth in our food, drug and gas bar businesses was offset by a decline in general merchandise; apparel sales were flat. During the quarter, our average quarterly internal food price index experienced modest inflation, which was lower than that in Q3 of 2011 and lower than average CPI in the quarter of 1.8%.

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