Canadian food and pharmacy retailer Loblaw Companies topped expectations for first-quarter revenue and profit, aided by sustained consumer demand well as easing prices of grocery items.
The company has seen gains from steady sales of essential items such as groceries and medicines, as well as higher demand for its private labels as consumers trade down from well-known brands that are typically more expensive.
Cost cut measures and promotional strategies have also helped the company to mitigate inflationary pressures, Loblaw has said.
With food prices now coming off their peaks in Canada, analysts expect consumer spending power to grow and boost sales across products, including on discretionary items such as apparels.
Quarterly Highlights
The Brampton, Ontario-based company reported a 4.4% rise in its retail segment sales in the first quarter, echoing strong growth in its food and drug businesses.
Loblaw's revenue rose 4.5% to C$13.58 billion ($9.86 billion) from a year earlier, compared with analysts' average estimate of C$13.46 billion ($9.58 billion), according to LSEG data.
On an adjusted basis, Loblaw's earnings per share came in at C$1.72, above analysts' average estimate of C$1.70.
The company added that its e-commerce sales increased by 16.1%.
“We continued to deliver value, quality and service across our various banners, which led to more customers choosing our stores,” said Per Bank, president and chief executive officer of Loblaw Companies Limited. “Our dedicated colleagues, strategic plan and unique assets position us well to best serve the needs of Canadians today and in the future.”
News by Reuters, additional reporting by ESM.
