Loblaw, the Canadian retailer, announced better-than-expected financial results for the second quarter, as Canadian consumers grapple with increasing grocery prices.
In the three months ending June 17, Loblaw reported a net income of 508 million Canadian dollars ($385.7 million), equivalent to C$1.58 per share. This is compared to C$387 million, or C$1.16 per share, in the same period the previous year.
The rise in profit is attributed to an unusually high increase this quarter, as the company surpassed a prior-year commodity-tax charge at President’s Choice Bank of C$111 million.
On an adjusted basis, which excludes exceptional or one-off items, earnings increased by nearly 15%, reaching C$1.94 per share. This surpasses the expected rise to C$1.91 per share, according to analysts polled by FactSet.
Furthermore, sales rose from C$12.85 billion to C$13.74 billion, exceeding consensus expectations of a rise to C$13.63 billion.
Loblaw’s food retail segment experienced a 6.1% increase in same-store sales during this period. This growth was primarily driven by consumer preference for the company’s discount stores, although the size of each consumer’s purchase has reduced.
In addition to the food retail segment, Loblaw’s drug retail segment also reported a rise in same-store sales, with an increase of 5.7%.
Canada has recently been dealing with high food inflation, with prices in June alone being 9.1% higher compared to a year ago, according to Statistics Canada.