Canadian grocery retailer Loblaw has booked a jump in third-quarter profits but warned that sales and margins may be at risk from competition and falling food prices.
For the period ended 9 October, profits climbed 12.7% to C$213m (US$209m). Operating profit rose 3.2% to C$390m.
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Sales in the period were positively impacted by the acquisition of T&T Supermarket in the third quarter and so increased 1.3% to C$9.6bn. Same-store sales, however, dropped by 0.4%.
Galen Weston, executive chairman of Loblaw, said yesterday (17 November): “The company continues to make progress towards the final stages of its renewal programme in a market which remains highly competitive and under deflationary pressures. These factors, combined with the significant risk and cost associated with the major systems and infrastructure programmes the company is undertaking, will continue to put future sales and margins increasingly under pressure.”
For the 40-week period, profits rose 7.9% to C$530m, while operating profits climbed 5.6% to C$980m. Net sales increased 1.8% to reach C$23.84bn.
Click here to view the full earnings release.
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