Loblaw’s profits grow 30% in Q1

Loblaw delivered a strong financial performance in the first quarter ended March 27, reporting revenue of CAN $11,872 million. This represented an increase of $72 million, or 0.6% when compared with the first quarter of 2020. Net earnings available to common shareholders were $313 million, an increase of $73 million, or 30.4%.

"A year into the pandemic, our stores, supply chain and digital assets have demonstrated resilience and innovation, and are better prepared than ever to serve the needs of Canadians," said Galen G. Weston, executive chairman of Loblaw Cos. Ltd. "Our strong financial results reflect continued momentum and positive consumer response to the value and services in our stores and our expanding online solutions." Weston will succeed Sarah Davis, who announced her retirement in March, as president on May 6.

Loblaw saw an impressive sales increase of 133% in e-commerce compared with the first quarter of 2020.

Food retail same-stores sales growth held steady at 0.1%, however. While food retail basket size increased, traffic decreased in the quarter as compared with the first quarter of 2020.

In health care and pharmacy, drug retail (Shoppers Drug Mart Inc.) same-store sales decreased by 1.7%, with pharmacy same-store sales growth of 3.5%, and front store same-store sales decreased by 6.4%

Adjusted EBITDA was approximately $1.1 million. This represented a decrease of $12 million, or 1.0% when compared with last year. The decrease was driven by the lapping of the late first quarter of 2020, when shoppers were in panic-buying mode at the onset of the pandemic.

Operating income was $617 million for the company. This represented an increase of $76 million, or 14.0%. The retailer incurred approximately $48 million in COVID-19 related costs.

Loblaw also reported that adjusted gross profit in the first quarter of 2021 was $3,533 million, representing an increase of $83 million, or 2.4%, when compared with the first quarter of 2020. Adjusted gross profit percentage of 30.3% increased by 50 basis points compared with the first quarter of 2020, due to underlying improvements in business initiatives.

Looking forward, Loblaw anticipates that grocery sales will remain elevated due to the continued impact of the pandemic. It expects its core retail segment business to grow earnings faster than sales.