Loblaw 1Q Profit Rises as Food Retail Leads Sales Growth
By Adriano Marchese
Loblaw profit rose higher-than-expected in the first quarter thanks to higher sales at the company's food retail business.
The Canadian grocer on Wednesday posted a rise in net income to 459 million Canadian dollars ($333.1 million), or C$1.47 a share, compared with C$418 million, or C$1.29 a share, in the comparable quarter a year ago.
Adjusted earnings, a metric which excludes exceptional and one-off costs, were C$1.72 a share. According to FactSet, analysts were expecting C$1.70 a share.
Sales rose to C$13.58 billion from C$13 billion, beating analyst forecasts of a rise to C$13.46 billion
Loblaw's two segments both saw same-store sales growth in the quarter. The company's food retail segment, its largest, rose at a higher rate than a year earlier, at 3.4% compared with 3.1%. Meanwhile, its drug retail business operating under the Shoppers Drug Mart banner rose by 4%, down from a growth rate of 7.4% last year.
Loblaw noted that its internal food inflation was blow Canada's Consumer Price Index. In March, CPI for food purchased from stores was 1.9%, the lowest level in more than two years and below the headline CPI in the first quarter of 2024.
The company also reiterated its expectations for the year for its retail business to grow earnings faster than sales, and for adjusted net earnings per share to grow in the high single-digits.
Loblaw is also on track to develop its store network and distribution centers by a net amount of C$1.8 billion. When it announced the new investment plan in February, Loblaw outlined plans to build more than 40 new discount stores and 140 new pharmacy care clinics in communities across Canada.
Write to Adriano Marchese at adriano.marchese@wsj.com
(END) Dow Jones Newswires
May 01, 2024 07:14 ET (11:14 GMT)
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