Loblaw, the Canadian retailer, today (24 July) booked improving sales and margins for the second quarter of 2009.
The grocer, which also announced the acquisition of Canada’s largest Asian retailer T&T Supermarket, reported a 2.5% rise in same-store sales for the three months to 20 June. Same-store sales in the first six months of the year was up 2.4%.
Net earnings jumped almost 38% to C$193m (US$178.3m) during the second quarter. Operating profit climbed 22.7% to C$324m, with quarterly operating margin standing at 4.5%. First-half operating margin was 3.9%. Turnover grew 2.8% to C$7.23bn.
Nevertheless, executive chairman Galen Weston was cautious about the next six months.
“This quarter’s improvement in earnings was largely cost- and gross margin-driven,” Weston said. “This is a trend that we do not expect to continue.”
He added: “We have consistently said that the second half of this year would be by far the toughest, and with market volumes in decline, inflation dropping off, intensified competitive activity and a substantial ramp up in our infrastructure and renovation programmes, we expect sales and margins to be significantly challenged.”