Loblaw reports 30% surge in first-quarter profit but sees sales slowing

Loblaw Companies Ltd. reported its first-quarter profit was up 30 per cent compared with a year ago, helped by an improvement in its financial services business.

“A year into the pandemic, our stores, supply chain and digital assets have demonstrated resilience and innovation and are better prepared than ever to serve the needs of Canadians,” Galen G. Weston, Loblaw’s executive chairman, said in a statement.

“Our strong financial results reflect continued momentum and positive consumer response to the value and services in our stores and our expanding online solutions.”

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Canada’s biggest grocery and drugstore retailer earned a profit available to common shareholders of $313 million or 90 cents per diluted share for the quarter ended March 27.

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The result compared with a profit of $240 million or 66 cents per diluted share in the same quarter last year.

Revenue totalled $11.87 billion, up from $11.80 billion a year ago.

However, the company signalled that as the economy begins to reopens, revenue growth will be challenging as results start to lap the elevated sales at the outset of the pandemic last year.

Food retail same-stores sales growth was just 0.1 per cent in the quarter, for example, as Loblaw lapped the unprecedented demand and stockpiling witnessed towards the end of the same quarter in 2020. Drug retail same-store sales fell by 1.7 per cent.

Meanwhile, the company’s higher profits came as the company’s financial services segment saw a $20-million reduction in its expected credit loss provisions in the quarter compared with a $50-million increase in the first quarter of 2020.

On an adjusted basis, Loblaw said it earned $1.13 per diluted share, up from an adjusted profit of 97 cents per diluted share.

© 2021 The Canadian Press

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