Loblaw 2Q Profit, Revenue Top Views as Food Inflation Climbs in Canada

By Adriano Marchese

Loblaw on Wednesday reported a better-than-expected rise in profit and revenue in the second quarter as Canadian consumers continue to see their grocery bills increase.

For the three months ended June 17, the Canadian retailer reported net income of 508 million Canadian dollars ($385.7 million), or C$1.58 a share, compared with C$387 million, or C$1.16 a share a year ago.

Loblaw said this quarter's rise was unusually elevated after lapping a prior-year commodity-tax charge at the company's President's Choice Bank of C$111 million.

On an adjusted basis, which strips out exceptional or one-off items, earnings rose nearly 15% higher, reaching C$1.94 a share, compared with C$1.69 a share. According to FactSet, analysts were expecting a rise to C$1.91 a share.

Sales rose to C$13.74 billion from C$12.85 billion. Consensus expectations among analysts was for a rise to C$13.63 billion.

Loblaw's food retail segment saw same-store sales rise by 6.1% in the period, led by consumer shift toward the company's discount stores, and the company has seen food retail traffic increase in the period, but basket size decrease.

Canada has been in the midst of a period of high food inflation, where in June alone, prices were 9.1% higher than a year ago, according to Statistics Canada.

The drug retail segment also saw same-store sales rise, increasing by 5.7%.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

July 26, 2023 07:08 ET (11:08 GMT)

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