TORONTO — Loblaw Cos.’ fourth-quarter financial results showed progress in the company’s turnaround program, but officials of the retailer here are bracing for a difficult year ahead.
A worsening economy, along with needed investments in store renovations and technology infrastructure, would “challenge results” in fiscal 2009, which began Jan. 4, Loblaw officials said in a conference call Wednesday.
“People have accused me of being too cautious about this, but I think this will be a very tough year and I don’t think we’ve yet seen the beginning of it,” said Allen Leighton, president and deputy chairman.
Leighton said the chain has already begun a program to strengthen its price positioning and “tweak” value at its stores, including a round of “Price Freeze” extended discounts and the reintroduction of the No-Name value private label.
“We believe continuing to own value, particularly in our discount and superstore [banners], will become increasingly important as the year unfolds,” he said.
For the 13-week quarter, Loblaw reported net income of $149 million (U.S.), a 370% increase from the 12-week fourth quarter a year ago, on overall sales of $6.1 billion, an improvement of 11.2%. Same-store sales improved 10.6%. The extra selling week accounted for 7.9% of the same-store sales increase. For the fiscal year, net income rose 65.2% to $432 million on sales gains of 4.8% to $24.4 billion.
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