Loblaw beats quarterly estimates as Canadian shoppers turn to local and discount brands
Consumers seeking lower-priced alternatives across categories ranging from food to healthcare have boosted demand for discount retailers such as Loblaw.
Same-store sales at its food retail segment rose 3.5% in the second quarter, while drug retail unit sales increased 4.1% from a year earlier.
The "Buy Canadian" movement, sparked by trade disputes between the U.S. and Canada, has also led to consumers switching to locally made goods.
This shift has led to a dramatic reshuffling of shelves at Canadian retail stores, which are now benefiting from a surge in sales of Canadian products.
Loblaw's retail sales, its biggest revenue contributor, climbed 5.4% in the quarter ended June 14, compared with a 1.4% increase a year ago. E-commerce sales also jumped 17.5%.
Earlier this month, U.S. President Trump threatened to impose a 35% tariff for goods imported from Canada, starting August 1, raising concerns about an escalating trade war.
Loblaw's quarterly revenue rose 5.2% to C$14.67 billion ($10.78 billion) from a year ago. Analysts estimated a rise of 5% to C$14.64 billion, according to data compiled by LSEG.
On an adjusted basis, the company posted earnings per share of C$2.40, topping expectations of C$2.33 per share.
Loblaw maintained its annual adjusted profit forecast of high single-digit growth.
Separately, Loblaw announced a 4-for-1 stock split on Thursday to keep shares affordable for retail and employee investors.
($1 = 1.3614 Canadian dollars)
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