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Loblaw Raises Profit Outlook as Discount, Drugstore Gains Fuel Q3

Discount banners with expanded pharmacy services are pulling cost-conscious shoppers back.

Overview

  • Revenue rose 4.6% to C$19.4 billion, with net earnings of C$794 million (66 cents per share) and adjusted earnings of 69 cents.
  • Same-store sales increased 2% in food retail and 4% at Shoppers Drug Mart, reflecting stronger traffic and larger baskets.
  • The company opened 19 new discount stores and 55 pharmacy clinics, and e-commerce sales grew 18%.
  • Loblaw wound down its Theodore & Pringle optical business under a Specsavers arrangement, recording a one-time C$22 million expense.
  • Management now guides to low double-digit adjusted EPS growth for the year, up from a high single-digit outlook, as analysts called the quarter solid despite slight shortfalls versus some forecasts.