Loblaw profit soars as strategic moves pay off

Loblaw Companies is reporting a big jump in first-quarter profit as it benefits from major strategic moves, including the purchase of Shoppers Drug Mart.

Canada's largest grocer said this morning that its net income was up 21.7 per cent from the same time last year, rising to $146 million and its adjusted net income was up 96.7 per cent to $301 million.

Loblaw's overall revenue for the quarter ended March 22 was $10.05 billion, up $2.76 billion, up 37.8 per cent from the same time last year.

Most of the increased revenue came from Shoppers Drug Mart, the country's largest pharmacy retailer.

In a statement, Loblaw’s executive chairman and president, Galen Weston, noted that his company was able to achieve the improved results even though “the grocery industry remains highly competitive and health-care reform continues to challenge our pharmacy business.”

He added that "our entire organization is focused on delivering the best in food, the best in health and beauty, operational excellence and growth.”

Total same-store sales grew 2.3 per cent during the quarter, led by four per cent growth in Loblaw’s food retail sales over the first quarter of 2014

Shoppers Drug Mart’s same-store sales grew 3.1%, with pharmacy up 3.5% and front store up 2.7 per cent.

Loblaw says its quarterly dividend will go up by two per cent to 25 cents per common share, starting in July.

In March Loblaw announced an expanson plan that would include the construction of 50 new stores and renovations or improvements to more than 100 existing stores this year.

The additions were to be across the country, and Loblaw’s estimated it would create about 5,000 jobs at its corporate and independently-owned stores.