Loblaw Companies Ltd. had lower net income in the third quarter but higher adjusted earnings and revenue in the company’s first financial report since completing its acquisition of Shoppers Drug Mart — a deal that combined Canada’s largest grocery company with the country’s largest pharmacy retailer.
“In the third quarter we continued to advance our strategic initiatives and improve our market position,” said Galen G. Weston, Loblaw’s president and executive chairman.
“We delivered solid performance across our portfolio of businesses, recognized efficiencies, realized significant synergies, and remained on track with our deleveraging targets.”
Loblaw had 90 cents per share of adjusted basic net earnings, or $371 million, up 23% from a year earlier and three cents better than analyst estimates.
Its revenue jumped 35.9% compared with a year earlier, rising to $13.6 billion. Excluding revenue from Shoppers, Loblaw’s revenue was up a more typical two per cent to $10.2 billion, an increase of about $203 million.
Loblaw’s net income fell 5.3% to $142 million, from $150 million in last year’s third quarter. The company attributed the decline to a decrease in operating income, which fell to $335 million from $375 million, before adjustments.
Excluding Shoppers Drug Mart, the adjusted operating income increased 74.2% to $669 million from $384 million.
Besides the grocery and pharmacy businesses — which operate under various banners such as Loblaw, No Frills, Real Canadian Superstore, Fortinos and Provigo — Loblaw has the Joe Fresh brand of clothing and clothing stores, the President’s Choice financial services and a majority stake in Choice Properties, a publicly traded real estate trust.
