Canadian grocery retailer Loblaw has reported lower third-quarter profits, hit by restructuring costs and supply chain disruptions.
The company posted a profit of C$192m (US$161.3m), or 70 cents per share, for the third quarter to 8 October, compared to $258m, or 94 cents per share, in the year-ago period. Earnings were impacted by restructuring and other charges and costs associated with supply chain disruptions.
Sales for the third quarter increased 6.4% to $8.7bn from the $8.1bn reported in the third quarter of 2004, with all regions enjoying sales growth. On a comparable basis, sales increased 4.7% for the quarter and 5.2% for the year to date. Same-store sales growth was flat during the quarter and approximately 0.5% year-to-date. Sales and same-store sales were adversely affected by supply chain disruptions experienced during the quarter, with the general merchandise and health and beauty care departments experiencing the greatest impact.
During the quarter, the company said it continued to move forward with its strategies including the execution of previously announced transformative initiatives including its office consolidation, systems conversions, supply chain network restructuring and relocation of its general merchandise operations.
Loblaw said it remains confident in its long-term strategy and in its ability to implement it.
