Loblaw on Thursday said earnings in its fiscal fourth quarter improved by 57%, driven by cost savings, improvements in its drug, financial and real estate divisions, and a slight increase in same-store food sales.
"We continued to lower prices, delivering more value to consumers," Galen G. Weston, chairman and CEO, said in a statement. "Our focus on our strategic framework and financial plan delivered solid financial performance in the fourth quarter and demonstrated the strength of our portfolio of businesses amidst a highly competitive food retail environment, and pressures from healthcare reform."
Food retail sales of $7.8 billion (Canadian; about $5.9 billion U.S.) increased by 2.4% compared to the fourth quarter last year, with non-fuel food retail comps improving by 1.1%. Same-store sales growth included the favorable impact of an extra selling day in the period due to the timing of New Year’s Day, providing a 1% boost to food store comps. Food margins were stable in the period.
Loblaw’s Shoppers Drug Mart drugstore division reported same-store sales growth of 3.4%, with same-store pharmacy sales increasing by 2.5% and same-store front store sales increasing by 4.1%.
Net earnings of $201 million (Canadian) increased by 57.0% compared to the fourth quarter of 2015, reflecting underlying operating performance of $30 million and $43 million in favorable adjustments from last year’s fourth quarter including an impairment charge.
Food retail sales for the fiscal year totaled $33.2 billion (Canadian, about $25.3 billion U.S.), an increase of 1.1%. Same-store food retail sales improved by 1.9% for the fiscal year.