Canadian retailer Loblaw tops profit expectations on robust demand, easing costs (updated)

George Weston

22/02/2024 12:06

(Adds background in paragraph 2 onwards, company expected
earnings in paragraph 4 and revenue details in paragraph 8)
       Feb 22 (Reuters) - Canadian retailer Loblaw Companies
 L.TO  topped Wall Street expectations for fourth-quarter profit
on Thursday, helped by sustained demand for daily essentials and
easing input costs.
    Retailers in Canada have been benefiting from sales of
essential items like groceries and pharmaceuticals, and a
customer shift to affordable private labels as rising prices had
steered them away from big-name brands.
    Loblaw posted a 3.4% rise in its retail segment sales,
riding on demand for its beauty products and medicines.
    Canada's annual inflation rate slowed more than expected to
2.9% in January, while core price measures have also eased.
    The Brampton, Ontario-based company expects its full-year
2024 adjusted earnings per common share to grow in the high
single-digits.
        Easing supply chain snags and decelerating inflation in
Canada are likely to bring down costs for retailers, boosting
their margins.
  
    With food prices coming down in Canada, analysts expect
consumer spending power to grow and boost sales across products,
including discretionary items like apparel.
    Fourth quarter adjusted earnings per share came in at C$2.00
($1.49), compared with analysts' average estimate of C$1.90,
according to LSEG data.
        The company's revenue was C$14.53 billion in the quarter
ended Dec. 30, compared with analysts' expectations of C$14.52
billion.
  


($1 = 1.3456 Canadian dollars)

 (Reporting by Annett Mary Manoj in Bengaluru; Editing by Tasim
Zahid)
 ((AnnettMary.Manoj@thomsonreuters.com))