Grocery and drugstore retailer Loblaw reports Q4 profit and revenue up from year ago

Loblaw profit rises

Loblaw Cos. Ltd. reported its fourth-quarter profit and sales rose compared with year ago.

The grocery and drugstore retailer says it earned a profit available to common shareholders of $541 million or $1.72 per diluted share for the quarter ended Dec. 30. The result compared with a profit of $529 million or $1.62 per diluted share in the last three months of 2022.

Revenue totalled $14.53 billion, up from $14.01 billion a year earlier.

Food retail same-stores sales rose by 2.0 per cent, while drug retail same-store sales increased 4.6 per cent, with front store same-store sales growth of 1.7 per cent and pharmacy and health-care services same-store sales growth of 8.0 per cent.

On an adjusted basis, Loblaw says it earned $2 per share in its latest quarter compared with an adjusted profit of $1.76 per share a year earlier.

Markets were expecting earnings per share of $1.90 as of Feb. 21, according to financial data firm Refinitiv.

"We are very pleased to deliver another year of consistent operational and financial performance, reflecting our ongoing focus on retail excellence," Loblaw chief executive Per Bank said in statement on Thursday.

"Canadians continue to recognize the superior value and service we provide across our network, something all 220,000 of our colleagues are proud to deliver each and every day."

In its outlook for 2024, Loblaw said it expects its retail business to grow earnings faster than sales, with growth of adjusted net earnings per common share in the high single-digits.

The company said it will also continue to invest in its store network and distribution centres with a net investment of $1.8 billion in capital expenditures, including $2.2 billion in gross capital investments offset in part by about $400 million in proceeds from property sales.

The latest results come as Loblaw faces pressure from politicians and Canadian shoppers regarding inflation and the cost of groceries.

The company recently had to walk back a decision to reduce its discount on food items nearing their sell-by date after the move drew intense scrutiny.

Loblaw is also being urged by politicians to sign on to the grocery code of conduct, which it and Walmart Canada have said could raise prices.

The earnings follow an announcement by Loblaw on Tuesday that it planned to build more than 40 new stores, expand or relocate 10 stores and renovate more than 700 locations across its banners.

The company, which owns the Loblaws, Shoppers Drug Mart, No Frills, Real Canadian Superstore and T&T banners, has a network of 2,500 stores across the country.

The company said the investment plan will introduce more than 40 new discount stores and 140 new pharmacy care clinics, and will create more than 7,500 jobs in stores and in construction.

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