Loblaw Q3 Profit Declines; Cuts FY13 Operating Income View - Quick Facts

(RTTNews) - Loblaw Companies Limited (L.TO, LBLCF.PK), a Canadian provider of drugstore, general merchandise and financial products and services, reported Wednesday that its third-quarter net earnings declined 29 percent to C$154 million from C$217 million a year ago. Basic net earnings per share fell 28.6 percent to C$0.55.

Adjusted net earnings, which excluded items, was C$220 million or C$0.78 per share, compared to prior year's C$228 million or C$0.81 per share.

Revenue increased 1.9 percent to C$10.01 billion from prior year's C$9.83 billion. Retail sales growth was 1.5 percent and same-store sales growth was 0.4 percent.

The company noted that retail same-store sales growth was negatively impacted by the timing of the Thanksgiving holiday, estimated to be 0.5 percent to 0.7 percent.

Adjusted EBITDA, a key earnings metric, was down 0.3 percent to C$657 million.

Looking ahead for the full year 2013, the company now expects adjusted operating income and operating income to be flat compared to 2012. The company previously estimated mid-single digit growth in operating income for 2013.

Galen Weston, Executive Chairman, Loblaw Companies, said, "Unfortunately, due to incremental margin investment in the back half of the year, we are lowering our earnings growth expectations for 2013. …. Over the next three quarters, we will carefully balance our commitment to competitiveness and financial performance. Looking forward, the strength of the core business, combined with the acquisition of Shoppers Drug Mart, will powerfully position Loblaw Companies to deliver long-term earnings growth."