Loblaw Cos, the Canadian retailer, saw underlying profits tumble 22% in 2007, the company said yesterday (7 February).

The company posted adjusted operating income of C$1.03bn, down from C$1.3bn in 2006. The figure was adjusted to exclude one-off items booked in 2006 and 2007.

Loblaw saw sales rise 2.6% to C$29.3bn; same-store sales grew 3.4%.

Loblaw’s fourth-quarter results mirrored the company’s full-year performance, with underlying profits down 22.7% but sales up 2.7%. Same-store sales rose 2.6% during the last three months of the year.

“The fourth quarter concluded a year of transformational change, amidst intense competition and consequent pressure on earnings,” Loblaw said. “Despite these challenges, progress was made on our multi-year turnaround plan.”

The retailer said that it would continue to look at the cost base of the business to boost margins.

“Cost reductions in 2008 will help to support our profitability. Costs remain a critical focus for management. Our actions show that we are committed to driving costs out of our business. We have made some progress but we need to make more.”