TORONTO — Loblaw Cos. here on Thursday said it expects net income for fiscal 2012 to be lower than 2011 as it undertakes several investments in technology and other areas.
The company said it planned to invest about $1.1 billion (U.S.) in capital expenditures in 2012, including 40% on IT and supply chain and 60% on its store base. Loblaw, Canada’s largest operator of traditional supermarkets, said it would incur costs this year of $30 million to $40 million related to labor agreements in Ontario; incremental costs of about $70 million for IT and supply chain; and incremental costs of about $40 million “associated with strengthening its customer proposition.”
Loblaw said it expects that “operations will not cover the incremental costs related to the investments in IT and supply chain and its customer proposition,” putting downward pressure on earnings.
The company also reported a 5.5% gain in net income for the 12-week fourth quarter, which ended Dec. 31, to $174 million. Revenues increased 3.6%, to $7.4 billion. For the full year, net income rose 13.9%, to $769 million, on a 1.3% gain in revenues, to $31.3 billion.
Same-store sales growth for the fourth quarter was 2.5%, with an extra day of store operations having a positive impact estimated to be between 0.8% and 1%.
