By Judy McKinnon
Canadian grocery and pharmacy giant Loblaw Cos. reported
better-than-expected earnings and revenue on Wednesday, driven
largely by its retail operations, and raised its dividend by about
2%.
Toronto-based Loblaw, which last year purchased pharmacy chain
Shoppers Drug Mart Corp., said first-quarter revenue climbed nearly
38% to 10.05 billion Canadian dollars ($8.3 billion).
Revenue beat the C$9.45 billion analysts polled by Thomson
Reuters were expecting.
It said retail-segment sales rose 39% to C$9.83 billion,
including C$2.60 billion contributed by Shoppers. Total retail
same-store sales growth was 2.3% in the latest quarter.
Loblaw, which also has financial services and real estate
operations, said first-quarter earnings rose 22% to C$146 million,
or 35 Canadian cents a share. Adjusted to exclude items, it earned
73 Canadian cents, up from 54 Canadian cents a year earlier and
ahead of the 68 Canadian cents analysts expected.
The company also bolstered its quarterly dividend payout to 25
Canadian cents a share from 24.5 Canadian cents.
"Although the grocery industry remains highly competitive and
health care reform continues to challenge our pharmacy business, we
are maintaining stable business performance, gaining incremental
efficiencies, delivering synergies on schedule, deleveraging the
balance sheet and achieving continued earnings growth," Executive
Chairman Galen G. Weston said in a statement.
Loblaw, which closed its C$12.4 billion takeover of Shoppers
last year, has said it plans to spend more than C$1.2 billion on
its Canadian business this year to build and refurbish stores,
expand its e-commerce operations and invest further in its supply
chain and IT infrastructure.
Write to Judy McKinnon at judy.mckinnon@wsj.com
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