Shares in Canada's largest food retailer Loblaw closed 6% up yesterday (13 November) after the company posted a rise in third-quarter net earnings.

Loblaw said earnings reached C$155m (US$127.4m) for the period ended 4 October, compared with earnings of C$117m for the comparable period last year.

Operating income increased to C$311m for the third quarter of 2008, an increase of 24.4%, primarily due to lower restructuring costs, higher sales and cost-reduction initiatives.

Sales rose 3.9% to C$9.49bn in the quarter, while same-store sales increased 3% boosted by "moderate" internal retail food price inflation.

Loblaw chairman Galen Weston said: "Third-quarter performance showed some signs of progress towards our goal of becoming an effective selling organisation. We also continued to realise benefits from our improved buying, cost management and operating procedures. However, we are preparing for a challenging close to the current year and start to the next, driven by the uncertain economy and continued competitive pressures."

Loblaw shares closed up C$1.66 or 6.2% at C$28.6 on the Toronto Stock Exchange yesterday.