BRAMPTON, Ont. — Loblaw Companies Ltd.’s second-quarter adjusted earnings were above analyst estimates, but the grocery and pharmacy retailer also recorded an 86.1 per cent decline in net profit due to a number of unfavourable items including an acquisition expense at its Choice Properties division.
Net profit available to common shareholders dropped to $50 million or 13 cents per share for the 12 weeks ended June 16, from $359 million or 90 cents per share a year earlier, the company said Wednesday.
Excluding $100 million or 26 cents per share of costs related to the acquisition of Canadian Real Estate Investment Trust, $192 million or 51 cents in adjustments to the fair value of a liability as well as other items, Loblaw’s adjusted net earnings were down a less dramatic 5.6 per cent to $421 million, or $1.11 per share.
Analysts had estimated $1.09 per share of adjusted earnings, according to Thomson Reuters Eikon.
Overall revenue was in line with analyst estimates at $10.92 billion for the 12 weeks ended June 16, down $157 million or 1.4 per cent from the second quarter of 2017 — reflecting the sale of the company’s gas bar operations last year.
Analyst Irene Nattel of RBC Dominion Securites wrote that the second-quarter results are evidence that the company “is hyper-focused on ensuring its sector-leading market position while driving operating efficiency and productivity.”
Same-store sales growth at the food retail division — which operates under a number of banners — was 0.8 per cent, excluding gas bar operations, while drug retail same-store sales growth at Shoppers Drug Mart was 1.7 per cent.
“Our base businesses continued to perform well in a very competitive marketplace despite significant cost pressures,” said Galen G. Weston, chairman and chief executive officer.
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The Canadian Press