Loblaw Cos., the Canadian retailer, has posted a jump in fourth-quarter earnings, helped by lower restructuring and stock compensation charges but also boosted by rising same-store sales.
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The company yesterday (18 February) booked net earnings or C$188m (US$150.3m), a more than four-fold jump of the C$40m filed last year.
Same-store sales climbed 10.6%, driving an 11.2% rise in group turnover to C$7.75bn, but Loblaw said lower one-off costs, the disposal of a foodservice business and an extra selling week had also boosted earnings.
Operating income more than doubled during the fourth quarter, rising from C$134m a year earlier to C$317m.
Loblaw benefited from income of C$8m due to lower than expected restructuring costs, which had cost the company C$36m during the fourth quarter of 2007.
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By GlobalDataLoblaw’s operating income was also helped by income of C$17m due to stock-0based compensation during the fourth quarter of 12008, During the last three months of 2007, Loblaw incurred a charge of C$52m.
The retailer also gained C$22m from the sale of its foodservice business during the last three months of 2008.
Nevertheless, Loblaw said that even after accounting for the extra selling week, and after excluding the one-off items, operating income had “improved” during the fourth quarter of 2008.
Loblaw is in the midst of a turnaround programme designed to revitalise the business amid fierce competition from Sobeys, Metro Inc and Wal-Mart.
“Our fourth quarter performance demonstrated that we are continuing to edge forward,” said Loblaw executive chairman Galen Weston. “However, given the unpredictable economy and tough competitive environment, we remain cautious and are prepared for a challenging 2009.”
Over the whole of 2008, Loblaw saw same-store sales rise 4.2%, helping turnover climb 4.8% to C$30.8bn. Operating income, helped by one-off items, rose 42.1% to C$1.05bn; net earnings jumped 65.2% to C$545m.
