BRAMPTON, Ontario — Loblaw Cos. here on Wednesday said net profits declined by 15.9% in the second quarter as price investments exceeded modest sales gains.
Comparable-store sales improved by 0.2% and overall revenues improved by 1.1% to $7.2 billion (U.S.) for the 12-week quarter that ended June 16. EBITDA margin slid to 6.4% of sales from 6.9% as a result of around $15 million in price investments and higher labor costs, and ongoing IT expenses, officials said. Net earnings totaled $156 million (U.S.).
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“While I’m not happy that earnings are down, we are on plan, we are staying on strategy, and we’re consistently executing,” Vincente Trius, Loblasw’s president, said in a conference call.
Trius characterized the market as rational, but “competitively intense” as square footage increased as consumer confidence and inflation decreased. Trius said the company was experiencing positive results as a result of comprehensive resets in key categories, and said customer counts increased during the quarter. Loblaw also on Wednesday said it inked an agreement to put its Joe Fresh clothing line in JC Penney stores throughout the U.S.
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