Loblaw Companies Ltd. reported its third-quarter profit rose about 30 per cent compared with a year ago.
The grocery and drugstore retailer says its net earnings available to common shareholders totalled $556 million, or $1.69 per diluted share, for the quarter ended Oct. 8. The result was up from $431 million, or $1.27 per diluted share, in the same quarter last year.
Revenue totalled $17.39 billion, up from $16.05 billion in its third quarter of 2021.
Food retail same-store sales rose 6.9 per cent, while drugstore same-store sales added 7.7 per cent.
Sales were led by strong performance in the grocer’s discount banners, including No Frills and Real Canadian Superstore, the company said.
The grocer also noted a continued shift to private label brands such as President’s Choice and No Name.
Loblaw said Canadian retail food inflation remained among the lowest of G7 countries but that “global inflationary forces continued to increase the cost of food in the quarter.”
“Loblaw’s efforts to moderate cost increases and provide superior value to customers through its PC Optimum Program and promotions resulted in strong sales and stable gross margins in food retail,” the company said in a report to shareholders.
Higher-margin sales offset flat food margins
In its drugstores like Shoppers Drug Mart, revenues benefited from elevated sales of higher-margin categories like beauty, cough and cold, Loblaw said.
On an adjusted basis, Loblaw says it earned $2.01 per diluted share, up from an adjusted profit of $1.59 per diluted share a year ago.
Analysts on average had expected a profit of $1.96 per share and $16.85 billion in revenue, according to estimates compiled by financial markets data firm Refinitiv.