Canadian food manufacturer and grocer George Weston has booked a drop in first-quarter adjusted earnings on the back of higher costs at Loblaw.
Adjusted net earnings for the three months to 24 March fell to C$0.89 (US$0.88) per share, from C$1.07 a year earlier.
Net earnings attributable to shareholders, however, including the impact of a forward sale agreement for shares of Loblaw and other items, rose 18.1% to C$124m.
Operating profits in the period slid 9.6% to C$274m, primarily due to a decline in the operating performance of Loblaw, partially offset by a decline in the effective income tax rate.
Group sales amounted to C$7.22bn, a 1.1% increase over the prior-year period.
Loblaw sales in the quarter increased by 0.9% to C$6.94bn, while retail segment sales were up 0.8% and same-store sales down 0.7%, negatively impacted by the effect of one less day of store operations.
Loblaw’s operating income dropped 21.3% to C$237m as a result of increased transportation costs and higher input costs outpacing internal food price inflation.
Weston Foods saw sales increase by 3.7% to C$425m and operating income reached C$60m, compared to C$19m in the year-ago period.
For the remainder of 2012, George Weston said it anticipates adjusted basic net EPS to be down year-over-year, primarily due to the impact of the incremental costs at Loblaw.
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