Loblaw reports profit and revenue spike

Loblaw is reporting a profit and revenue boost as it deals with a PR crisis.

The parent company of Loblaw, Shoppers Drug Mart, Real Canadian Superstore, No Frills and Maxi says it earned a profit available to common shareholders of $459 million, an almost 10% spike from $418 million in the same quarter last year. Revenue for the quarter moved up to $13.58 billion, an increase from $13 billion a year earlier.

Food same-store sales were up 3.4%, drug same-stores moved 4% higher, and e-commerce sales increased by 16.1%, the highest level reported in two years, equally weighted toward discount and conventional.

PCX is experiencing triple-digit growth, and it’s seeing growth in third-party delivers like Instacart as well. Foot traffic was also up, while basket size was down.

In Wednesday’s earnings call, Richard Dufresne, Loblaw’s CFO of market and discount says the company saw share gains and that the consumer shift to discount continues. He says internal inflation was lower than CPI again this quarter. This “highlights strength of discount banners, private label and PC Optimum,” he says, as well as more Canadians choosing stores for value, quality and service.

In pharmacy, health and beauty and prescription services showed strong growth.

Per Bank, the company’s CEO, says it is keeping costs low and providing superior value to Canadians, who remain “very focused on value.” Bank says customers voting with their feet, and that going forward private label will grow apace with national brands.

Traffic and items sold “very strong,” and it is seeing positive results in both discount and conventional banners. There is more engagement with PC Optimum, Bank says, and it remains “bullish” on “having one of the best digital loyalty programs in the world.”

Regarding the Grocery Code of Conduct, Bank says it is working with a committee and that it is starting to be “cautiously optimistic” about securing an agreement between retailers and suppliers as Canadians becoming increasingly concerned about food sticker shock.

The positive news comes as the retailer remains the subject of a mass boycott, with a related subreddit, r/loblawsisoutofcontrol, now boasting around 62,000 members criticizing the company.