Loblaw Reports Revenue Growth of 4.1% and Adjusted Diluted Net Earnings Per Common Share(2) Growth of 9.3% in the First Quarter

Associated Press

30-04-2025

BRAMPTON, ON, April 30, 2025 /CNW/ - Loblaw Companies Limited (TSX: L) ('Loblaw' or the 'Company') announced today its unaudited financial results for the first quarter ended March 22, 2025.(1)
During the quarter, Loblaw continued its focus on providing Canadians with quality, value, service, and convenience, across its coast-to-coast network of stores and digital platforms. Strong customer response to everyday value offerings, personalized PC Optimum™ loyalty offers, and impactful promotions drove continued sales momentum and market share gains, underpinned by positive unit sales and larger baskets in Food Retail. In Drug Retail, pharmacy and healthcare services performed well, reflecting continued strong growth in prescription volumes and specialty drugs. Front store sales were strong across beauty categories and reflected an extended cough, cold and flu season, partially offset by the exit from certain items in the electronics category. Delivering against its capital investment plans to open approximately 80 new stores and 100 new clinics in 2025, the Company brought Hard Discount banners to five new communities and opened four new pharmacies with expanded clinics in the quarter, and opened a second T&T Supermarket in downtown Toronto.
'We will continue to support Canadian companies and brands, highlight Canadian-made products in our stores, and deliver value across our network,' said Per Bank, President and Chief Executive Officer, Loblaw Companies Limited. 'Our commitment to retail excellence is resonating with customers and allowed us to deliver consistent financial results.'
2025 FIRST QUARTER HIGHLIGHTS
CONSOLIDATED AND SEGMENT RESULTS OF OPERATIONS
The following table provides key performance metrics for the Company by segment.
The following table provides a breakdown of the Company's total and same-store sales for the Retail segment.
RETAIL SEGMENT
In the first quarter of 2025, 10 food and drug stores were opened and 4 food and drug stores were closed. Retail square footage was 72.3 million square feet, a net increase of 1.0 million square feet, or 1.4% compared to the first quarter of 2024.
FINANCIAL SERVICES SEGMENT
OUTLOOK(3)
Loblaw will continue to execute on retail excellence while advancing its growth initiatives with the goal of delivering consistent operational and financial results in 2025. The Company's businesses remain well positioned to meet the everyday needs of Canadians.
In 2025, the Company's results will include the impact of a 53rd week, which is expected to benefit adjusted net earnings per common share(2) growth by approximately 2%. On a full-year comparative basis, excluding the impact of the 53rd week, the Company continues to expect:
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ('ESG')
With a network of more than 2,800 locations, and 220,000 colleagues and employees, Loblaw provides life's everyday essentials to Canadian families coast-to-coast. As such, Loblaw's prosperity is directly linked to the prosperity of the communities it serves.
In April 2025, the Company released its 2024 Live Life Well® report, showcasing its progress relative to two key pillars that underpin the Company's commitment to Canada's prosperity – fighting climate change and advancing social equity:
The 2024 Live Life Well® report builds on the Early Release of Priority 2024 ESG disclosures released in February 2025, and together, these two reports demonstrate the Company's commitment to providing timely and relevant information for stakeholders, and to its future alignment with the International Sustainability Standards Board ('ISSB').
NORMAL COURSE ISSUER BID PROGRAM ('NCIB')
From time to time, the Company participates in an automatic share purchase plan ('ASPP') with a broker in order to facilitate the repurchase of the Company's common shares under its NCIB. During the effective period of the ASPP, the Company's broker may purchase common shares at times when the Company would not be active in the market.
FORWARD-LOOKING STATEMENTS
This News Release contains forward-looking statements about the Company's objectives, plans, goals, aspirations, strategies, financial condition, results of operations, cash flows, performance, prospects, opportunities and legal and regulatory matters. Specific forward-looking statements in this News Release include, but are not limited to, statements with respect to the Company's anticipated future results, events and plans, strategic initiatives and restructuring, regulatory changes including further healthcare reform, future liquidity, planned capital investments, and the status and impact of IT systems implementations. These specific forward-looking statements are contained throughout this News Release including, without limitation, in the 'Consolidated and Segment Results of Operations' and 'Outlook' sections of this News Release. Forward-looking statements are typically identified by words such as 'expect', 'anticipate', 'believe', 'foresee', 'could', 'estimate', 'goal', 'intend', 'plan', 'seek', 'strive', 'will', 'may', 'should' and similar expressions, as they relate to the Company and its management.
Forward-looking statements reflect the Company's estimates, beliefs and assumptions, which are based on management's perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. The Company's estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change. The Company can give no assurance that such estimates, beliefs and assumptions will prove to be correct.
Numerous risks and uncertainties could cause the Company's actual results to differ materially from those expressed, implied or projected in the forward-looking statements, including those described in the Company's Management Discussion & Analysis ('MD&A') in the 2024 Annual Report, and the Company's Annual Information Form ('AIF') for the year ended December 28, 2024.
Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company's expectations only as of the date of this News Release. Except as required by law, the Company does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
DECLARATION OF DIVIDENDS
Subsequent to the end of the first quarter of 2025, the Board of Directors declared a quarterly dividend of $0.5643 per Common Shares, payable on July 1, 2025 to shareholders of record on June 15, 2025.
EXCERPT OF NON-GAAP AND OTHER FINANCIAL MEASURES
The Company uses non-GAAP and other financial measures, as reconciled and fully described in Appendix 1 'Non-GAAP and Other Financial Measures' of this News Release.
These measures do not have a standardized meaning prescribed by International Financial Reporting Standards as issued by the International Accounting Standards Board ('IFRS Accounting Standards' or 'GAAP'), and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with GAAP.
The following table provides a summary of the differences between the Company's consolidated GAAP and Non-GAAP and other financial measures, which are reconciled and fully described in Appendix 1.
The following table provides a summary of the Company's adjusting items which are reconciled and fully described in Appendix 1.
CORPORATE PROFILE
2024 Annual Report and 2025 First Quarter Report to Shareholders
The Company's 2024 Annual Report and 2025 First Quarter Report to Shareholders are available in the 'Investors' section of the Company's website at loblaw.ca and on sedarplus.ca.
Investor Relations
Additional financial information has been filed electronically with various securities regulators in Canada through SEDAR+ and with the Office of the Superintendent of Financial Institutions (OSFI) as the primary regulator for the Company's subsidiary, President's Choice Bank ('PC Bank'). The Company holds an analyst call shortly following the release of its quarterly results. These calls are archived in the 'Investors' section of the Company's website at loblaw.ca.
Conference Call and Webcast
Loblaw Companies Limited will host a conference call as well as an audio webcast on April 30, 2025 at 10:00 a.m. (ET).
To access via tele-conference, please dial [phone] or [phone]. The playback will be made available approximately two hours after the event at [phone] or [phone], access code: 30196#. To access via audio webcast, please go to the 'Investor' section of loblaw.ca. Pre-registration will be available.
Full details about the conference call and webcast are available on the Loblaw Companies Limited website at loblaw.ca.
Annual Meeting of Shareholders
The 2025 Annual Meeting of Shareholders of Loblaw Companies Limited will be held on Tuesday, May 6, 2025 at 11:00 a.m. (EDT) at The Royal Conservatory, TELUS Centre for Performance and Learning, Koerner Hall, 273 Bloor Street West, Toronto, Ontario, Canada and virtually via a live webcast.
Shareholders will also be able to listen, participate and vote at the meeting in real time through a live webcast online at https://meetings.lumiconnect.com/400-700-868-246 (meeting password: AGM2025). See 'How do I attend and participate in the Meeting?' in the Management Proxy dated March 25, 2025, which can be viewed online at www.loblaw.ca or under Loblaw's SEDAR+ profile at www.sedarplus.ca, for detailed instructions on how to attend and vote at the meeting.
Please refer to the 'Events and Presentations' or 'Shareholders Services' page at loblaw.ca for additional details on the virtual meeting.
APPENDIX 1: NON-GAAP AND OTHER FINANCIAL MEASURES
The Company uses the following non-GAAP and other financial measures and ratios: Retail segment gross profit; Retail segment adjusted gross profit; Retail segment adjusted gross profit percentage; adjusted earnings before income taxes, net interest expense and other financing charges and depreciation and amortization ('adjusted EBITDA'); adjusted EBITDA margin; adjusted operating income; adjusted net interest expense and other financing charges; adjusted income taxes; adjusted effective tax rate; adjusted net earnings available to common shareholders; adjusted diluted net earnings per common share, free cash flow, and same-store sales. The Company believes these non-GAAP and other financial measures and ratios provide useful information to both management and investors in measuring the financial performance and financial condition of the Company for the reasons outlined below.
Management uses these and other non-GAAP and other financial measures to exclude the impact of certain expenses and income that must be recognized under GAAP when analyzing underlying consolidated and segment operating performance, as the excluded items are not necessarily reflective of the Company's underlying operating performance and make comparisons of underlying financial performance between periods difficult. The Company adjusts for these items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring.
These measures do not have a standardized meaning prescribed by GAAP and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with GAAP.
Retail Segment Gross Profit, Retail Segment Adjusted Gross Profit and Retail Segment Adjusted Gross Profit Percentage The following tables reconcile adjusted gross profit by segment to gross profit by segment, which is reconciled to revenue and cost of sales measures as reported in the consolidated statements of earnings for the periods ended as indicated. The Company believes that Retail segment gross profit and Retail segment adjusted gross profit are useful in assessing the Retail segment's underlying operating performance and in making decisions regarding the ongoing operations of the business.
Retail segment adjusted gross profit percentage is calculated as Retail segment adjusted gross profit divided by Retail segment revenue.
Adjusted Operating Income, Adjusted EBITDA and Adjusted EBITDA Margin The following tables reconcile adjusted operating income and adjusted EBITDA to operating income, which is reconciled to net earnings attributable to shareholders of the Company as reported in the consolidated statements of earnings for the periods ended as indicated. The Company believes that adjusted EBITDA is useful in assessing the performance of its ongoing operations and its ability to generate cash flows to fund its cash requirements, including the Company's capital investment program.
Adjusted EBITDA margin is calculated as adjusted EBITDA divided by revenue.
In addition to the items described in the Retail segment adjusted gross profit section above, when applicable, adjusted EBITDA was impacted by the following:
Amortization of intangible assets acquired with Shoppers Drug Mart and Lifemark The acquisition of Shoppers Drug Mart in 2014 included approximately $6,050 million of definite life intangible assets, which are being amortized over their estimated useful lives. In 2024, the annual amortization associated with the acquired intangibles was $479 million. The annual amortization will decrease to approximately $130 million in 2025, including $110 million in the first quarter of 2025, and approximately $30 million in 2026 and thereafter.
The acquisition of Lifemark in 2022 included approximately $299 million of definite life intangible assets, which are being amortized over their estimated useful lives.
Fair value adjustment on fuel and foreign currency contracts The Company is exposed to commodity price and U.S. dollar exchange rate fluctuations. In accordance with the Company's commodity risk management policy, the Company enters into exchange traded futures contracts and forward contracts to minimize cost volatility relating to fuel prices and the U.S. dollar exchange rate. These derivatives are not acquired for trading or speculative purposes. Pursuant to the Company's derivative instruments accounting policy, changes in the fair value of these instruments, which include realized and unrealized gains and losses, are recorded in operating income. Despite the impact of accounting for these commodity and foreign currency derivatives on the Company's reported results, the derivatives have the economic impact of largely mitigating the associated risks arising from price and exchange rate fluctuations in the underlying commodities and U.S. dollar commitments.
Sale of Wellwise In the fourth quarter of 2024, the Company entered into an agreement with a third party to sell all of the shares of its Wellwise by Shoppers™ ('Wellwise') business, including 42 Wellwise locations, for cash proceeds and recorded a net fair value write-down of $23 million in the Retail segment in SG&A. The transaction closed in the first quarter of 2025 and the Company recorded a gain of $5 million in the Retail segment in SG&A.
Gain on sale of non-operating property In the first quarter of 2025, the Company recorded a gain related to the sale of a non-operating property to a third party of $14 million (2024 – nil).
Adjusted Net Interest Expense and Other Financing Charges The following table reconciles adjusted net interest expense and other financing charges to net interest expense and other financing charges as reported in the consolidated statements of earnings for the periods ended as indicated. The Company believes that adjusted net interest expense and other financing charges is useful in assessing the Company's underlying financial performance and in making decisions regarding the financial operations of the business.
Adjusted Income Taxes and Adjusted Effective Tax Rate The following table reconciles adjusted income taxes to income taxes as reported in the consolidated statements of earnings for the periods ended as indicated. The Company believes that adjusted income taxes is useful in assessing the Company's underlying operating performance and in making decisions regarding the ongoing operations of its business.
Adjusted effective tax rate is calculated as adjusted income taxes divided by the sum of adjusted operating income less adjusted net interest expense and other financing charges.
Adjusted Net Earnings Available to Common Shareholders and Adjusted Diluted Net Earnings Per Common Share The following table reconciles adjusted net earnings available to common shareholders of the Company and adjusted net earnings attributable to shareholders of the Company to net earnings attributable to shareholders of the Company and then to net earnings available to common shareholders of the Company for the periods ended as indicated. The Company believes that adjusted net earnings available to common shareholders and adjusted diluted net earnings per common share are useful in assessing the Company's underlying operating performance and in making decisions regarding the ongoing operations of its business.
The following table reconciles adjusted net earnings available to common shareholders of the Company and adjusted diluted net earnings per common share to net earnings available to common shareholders of the Company and diluted net earnings per common share for the periods ended as indicated.
Free Cash Flow The following table reconciles, by reportable operating segments, free cash flow to cash flows from operating activities. The Company believes that free cash flow is the appropriate measure in assessing the Company's cash available for additional financing and investing activities.
Same-Store Sales Same-store sales are retail segment sales for stores in operation in both comparable periods, including relocated, converted, expanded, contracted or renovated stores. The Company believes this metric is useful in assessing sales trends excluding the effect of the opening and closure of stores.
SOURCE Loblaw Companies Limited