Canadian grocer Loblaw profit falls due to later Thanksgiving

Reuters

* Third-quarter profit C$0.73 per share vs est C$0.80

* Says profit hurt by later Thanksgiving, higher investments

* Same-store sales up 0.4 pct

* Revenue up 2 percent

* Cuts full year earnings outlook

Nov 13 (Reuters) - Loblaw Cos Ltd, Canada's largestgrocer, reported a 29 percent fall in quarterly profit, hurt bya later Thanksgiving holiday and a decline in sales at itsdrugstores.

The Thanksgiving holiday in Canada fell on Oct. 14 thisyear, nine days after the company's third quarter ended.

The holiday was on Oct. 8 last year, just two days after thequarter ended, meaning the company got some benefit fromshopping ahead of the holiday.

Loblaw cut its full-year earnings outlook due tohigher-than-expected investments in store expansions and certainfood categories as competition intensifies.

Canadian retailers face increasing competition from TargetCorp and Wal-Mart Stores Inc.

That is one of the reasons Loblaw is buying Shoppers DrugMart Corp for C$12.4 billion.

Canada's No.3 grocer Metro Inc on Wednesday alsoreported a lower quarterly profit and blamed competition.

Loblaw said on Wednesday it expects operating income infiscal 2013 to be flat with 2012. In July, it forecast incomewould grow in the mid-single digits percentage-wise.

Earlier last month Loblaw, which is also involved infinancial services and property leasing, said it was cuttingabout 275 jobs as part of its drive to improve operations.

Third-quarter net income fell to C$154 million ($147million), or 55 Canadian cents per share, from C$217 million, or77 Canadian cents per share, a year earlier.

Excluding certain one-time items, profit was 73 Canadiancents per share, below analysts average estimates of 80 Canadiancents, according to Thomson Reuters I/B/E/S.

Total revenue rose 2 percent to C$10.01 billion, but fellshort of analysts' estimates of C$10.04 billion.

Sales at established stores, a key measure for retailers,climbed 0.4 percent, compared with a 0.2 percent fall a yearearlier.

Loblaw shares closed at C$47.84 on the Toronto StockExchange on Tuesday.

View Comments (0)