TORONTO -- Loblaw Cos. here said strong retail sales boosted overall sales and earnings for the third quarter and 40 weeks ended Oct. 8. Net income rose 37.3% to $24.6 million U.S. for the 16-week quarter and 25.3% to $62 million for the year to date. The results were converted to U.S. currency at the exchange rate of $1.36 Canadian to the U.S. dollar. Sales rose 6.9% for the quarter to $2.3 billion and 6% for the 40 weeks to $5.6 billion. The company said improvements in its New Orleans operations -- following last year's results, which were affected by a 34-week strike -- resulted in U.S. sales increases of 9.4% to $341 million. Sales in eastern Canada rose 10.2% to $1.3 billion, "with good same-store sales increases and new square footage growth," the company said. However, sales in western Canada fell 0.2% to $659.9 million as an 11% increase in retail growth was offset by reductions in Loblaw's wholesale business in the spring of 1993. The company noted that labor negotiations will be under way during the fourth quarter in western Canada, "where our primary competitor [Safeway] received material labor cost reductions last year." Marilyn Brophy, a securities analyst for the local office of Levesque Beaubien Geoffrion, Montreal, said Loblaw has been able to overcome sales weaknesses in western Canada, which were evident during the first half, as the negative impact of the company's decision to prune underperforming wholesale accounts slows down. Sales in Canada got a big boost, Brophy noted, from the addition of approximately 700,000 square feet of retail space during the first half of the year -- about half the new footage Loblaw expects to add by year's end, she said. U.S. sales were enhanced, she added, by store renovations in New Orleans that have upgraded the format of the company's That Stanley stores there.
