For the rest of 2023, Loblaws wants to focus investment efforts on its store network and distribution centers, according to the company’s latest financial results. Making that kind of strategy easier is positive cash flow, and Loblaws continues to produce strong numbers with its quarterly financial earnings.
In its most recent third quarter results, released Wednesday, the Canadian grocer saw solid results in virtually all categories. Revenue was up 5% year-over-year at over $18.2 billion (CAD) and food retail same-store sales increased by 4.5% while drug retail same-store sales were up 4.6%.
Store traffic increased as did ecommerce sales, which were up 13.6% year-over-year. Average basket size at store-level, however, decreased.
“Our stores are delivering more value, including deeper discounts on essentials, and customers are responding positively,” said Galen Weston, chairman, Loblaw Companies Limited. “We remain focused on doing what we can to fight inflation and deliver lower prices for Canadians, while continuing to invest for the future.”
Adjusted EBITDA was just over $1.9 billion for the third quarter, a 7.5% increase year-over-year, and net earnings available to common shareholders of the company were $621 million, which was an 11.7% improvement vs. third quarter 2022.
Operating income was just over $1 billion, a 7.5%, or $74 million, increase, and adjusted gross profit was just over $5.1 billion, which is a 4.4% improvement year-over-year.
Loblaws also expects its retail earnings to grow faster than sales over the final months of the fiscal year.
Loblaws expanded its network in the third quarter by opening more discount stores, including its 150th discount Maxi location.