Shares in Canadian retailer Loblaw fell today (25 July) after the company, which had warned of lower earnings in 2012, reported a 21% drop in first-half profits.
Loblaw said in February spending on its supply chain and market positioning would put pressure on earnings this year.
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It reported today a 20.6% fall in first-half net profit to C$285m. Operating income was down 18.4% at C$529m.
Revenue increased 1.1% to C$14.31bn but same-store sales fell 0.3% in the 24 weeks to 16 June.
Nevertheless, Loblaw insisted its plans are paying off. Executive chairman Galen Weston said: “We are beginning to gain traction on the top-line, particularly in our core food and drug businesses, as we continued our disciplined approach to improving our customer proposition. We remain confident that our ongoing investments in infrastructure, including the completion of our IT implementation, will enable efficiencies and expense leverage to drive future earnings growth.”
Loblaw’s shares were down 2.07% at C$31.26 at 14:18 ET today.
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