Canada’s largest grocer Loblaw has posted a sharp decline in first-quarter profits today (1 May), as restructuring charges took their toll on results.
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The supermarket group reported earnings of C$54m (US$48.8m), down from $140m booked in the first quarter of last year. Loblaw realised first quarter basic net earnings per common share of $0.20 compared to $0.51 for the same period in 2006. Adjusted EPS dropped 15% to $0.46 per share.
The company attributed the decline to costs associated with its sweeping supply chain overhaul. During the quarter, the group saw a restructuring charge of $75m and a $14m charge related to store closures.
Loblaw said that it would continue to drive through its restructuring initiative in order to ensure the group’s long term competitiveness.
“The company’s “Formula for Growth” continues to focus on how it will compete and succeed for the long term. The “Simplify” program is being executed as planned,” Galen G. Weston, executive chairman, said.
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By GlobalDataLoblaw said total restructuring costs are now expected to come in at the lower end of the previously disclosed range of $150-200m. A substantial part of the cost is expected to be registered during the second quarter of 2007, the retailer said.
Sales gained 3.3%, rising to $6.347bn. Same-store sales rose 2.4%, or 4% excluding the impact of decreased tobacco sales.
