HomeBusinessLoblaw profit soars 40 per cent in first quarter

Loblaw profit soars 40 per cent in first quarter


Canada’s biggest food retailer says people are shopping for groceries more often but buying less and shifting to discount stores as pandemic restrictions loosen and inflation soars.

Loblaw Companies Ltd. noted the trends as it raised its quarterly dividend and reported that its first-quarter profit rose nearly 40 per cent compared with a year ago.

The grocery and drugstore retailer said Wednesday it will now pay a quarterly dividend of 40.5 cents per share, up from 36.5 cents per share.

The increased payment to shareholders came as the company reported its profit available to common shareholders totalled $437 million or $1.30 per diluted share for the 12-week period ending March 26 compared with $313 million or 90 cents per diluted share a year earlier.

Revenue for the quarter totalled $12.26 billion, up from $11.87 billion in the same quarter last year.

Loblaw chairman and president Galen G. Weston said the company’s strong results reflect its ability to provide service and value to meet the evolving needs of Canadians.

“We have begun the year with momentum in our core retail businesses, a clear strategic agenda, and continued traction in our growth initiatives,” he said in a statement.

Food retail same-store sales rose 2.1 per cent, while drug retail same-store sales grew 5.2 per cent, with pharmacy same-store sales up 6.8 per cent and front store same-store sales up 3.6 per cent.

The grocer said food sales continued to benefit from higher than normal eat-at-home levels.

Loblaw said its discount division performed well in the quarter, led by strong growth at its discount banner No Frills.

The company said its conventional grocery stores, which include Zehrs, Provigo and Atlantic Superstore, were impacted by the shift to discount.

Meanwhile, its drugstores, which include Shoppers Drug Mart and Pharmaprix, recorded strong front-store and prescription sales. The company said its drug retail results drove margin expansion in the quarter.

On an adjusted basis, Loblaw said it earned $1.36 per diluted share, up from an adjusted profit of $1.13 per diluted share a year ago.

Irene Nattel, an analyst with RBC Dominion Securities Inc., said in a client note Loblaw posted another quarter of strong and better than expected results, underscoring the company’s “favourable momentum shift.”

This report by The Canadian Press was first published May 4, 2022.



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