Loblaw revenue increased $1,250 million to $14,007 million, a growth of 9.8 per cent. Retail segment sales climbed 9.7 per cent to $13,694 million. Front-store same-store sales for drug retail led growth in this segment increasing 11.5 per cent (drug retail same store sales increased 8.7 per cent). Food retail same-store sales increased 8.4 per cent and e-commerce sales grew 8.3 per cent.
The company forecast annual earnings above analysts’ expectations, supported by the strength in the pharmacy business and in grocery. Loblaw expects full-year 2023 adjusted earnings per common share to grow in low double-digits compared with the average analyst estimate of 9.64%, according to business analyst reports.
Galen G. Weston, chairman and president of Loblaw Companies Limited, says higher sales and leveraging of cost control measures drove earnings growth in the quarter.
“Loblaw used its assets to provide value to customers in a period of continued inflation,” said Galen G. Weston, Chairman and President, Loblaw Companies Limited. “Consumers responded favourably to those efforts and continued to benefit from our extensive private label offering, leading loyalty program and targeted promotions.”
Loblaw says continued strong demand for cough and cold products and strength in beauty and cosmetics categories drove growth.
For food retail, store traffic increased, and basket size decreased slightly, according to the company. Discount stores outperformed in the quarter, while Market Division stores performed with promotional strategies.
Overall for the quarter, “gross margins were slightly lower, largely related to the no name price freeze and increased commitment to promotional activity, partially offset by continued strength in higher margin front-store sales in the drug business.”
Outlook: Three strategic pillars
Loblaw says it plans to focus on three pillars moving forward: delivering retail excellence, driving growth and investing in the future.
Retail Excellence: Loblaw says it will focus on procurement opportunities to “improve product selection and drive economies of scale across grocery and pharmacy businesses” by leveraging its customer loyalty program “and more than one billion customer transactions across food, pharmacy, apparel and financial services.”
Driving Growth: Loblaw says it will focus on three areas – Digital Retail, Loblaw Media and PC Optimum.
Investing for the Future: Plans include ongoing investments to modernize and automate its supply chain and expand its retail network.
