Market News

Loblaw Second-Quarter Profits Rise 7.1%

Loblaw Cos. Ltd.'s second-quarter profit, for the three-month period ending June 18, was $211 million, or 76 cents a share compared with $197 million or 71 cents a share in the year-earlier period. While an improvement over last year's numbers, the results are lower than those predicted by most analysts. Sales at Loblaws stores that have been open a year or longer have been virtually flat. "The number of greatest concern was the same-store sales, which came in at zero, including 2% inflation," said Perry Caicco, managing director, CIBC World Markets. "Adjusting for Easter boosts the number to 1%—still not healthy." Competitive square footage growth and Real Canadian Superstore cannibalization in Ontario, and supply-chain problems in western Canada depressed sales, said the CIBC analyst. "The massive back-end reorganization continues to impact front-end execution, and sales could be slow to rebuild," he predicted. Source: Canadian Grocer E-Newsletter, July 29, 2005.