CANADA: Loblaw Q1 profits slide on higher costs
- Net earnings slide 36%
- Loblaw invests in supply chain, IT
- Sales increase 0.9%
Canadian grocery retailer Loblaw has booked a drop in first-quarter profits due to higher IT and supply chain costs.
For the three months to the end of March, net earnings slid 36% to C$126m (US$128m), the company reported today (2 May).
Operating profit in the period slumped 64% to C$239m, as a result of a decrease in retail operating income of C$60m and a drop in financial services operating income of C$4m. Loblaw's first-quarter operating margin fell to 3.4% from 4.4% in the year-ago period.
Sales, however, amounted to C$6.94bn, an increase of 0.9% over the first quarter of 2011.
"In the first quarter, we executed on our plan," said executive chairman of Loblaw Galen Weston. "Despite a decline in year-over-year earnings, store conditions are improved, we made steady progress on our IT implementation and we took a disciplined approach to improving our customer proposition."
Loblaw said its outlook for 2012 remains unchanged.
"We expect full-year net earnings to be down, with more pressure in the first half. We are confident that our ongoing investments in infrastructure will enable efficiencies and expense leverage, setting the stage for future earnings growth."
Click here to view the full earnings release.
More to follow.......
Around 700 jobs at Canadian retailer Loblaw could be cut as it plans to make its head office "leaner" and "more efficient"....
Canadian food manufacturer and grocer George Weston has recorded a decline in first-half profits thanks to costs from retail division Loblaw....
- General Mills sales woes continue - analysis
- Why personalisation will take-off in US food
- US food next wave on display at Winter Fancy Food
- Comment: Meal kits in US - don't believe the hype
- Column: Kraft Heinz, Unilever and sustainability
- Unilever 'lining up spreads sale'
- UK own-label firm Park Cakes sold in MBO
- Immigration crackdown "risk" for US dairy industry
- BRF plant suspended amid bribery allegations
- Fonterra cuts earnings forecast