BRAMPTON, Ontario — Loblaw Cos. here on Wednesday said net income in the fiscal first quarter was down by 22.2% as a result of soft sales, higher transportation costs and a $10 million investment in lower prices.
Net earnings of $128 million (U.S.) or 45 Canadian cents per share, came in below analyst estimates of 50 cents. Sales of $7 billion (U.S.) were up by 0.9% but same-store sales decreased by 0.7%. Food and drug sales were flat, while gas revenues grew as a result of price increases. The company said food inflation was “modest,” but less than national food inflation figures of 3.7% in the quarter, which ended March 24.
“In the first quarter we executed our plan,” Galen Weston, executive chairman, said in a statement. “Despite a decline in year-over-year earnings, store conditions are improved, and we made steady progress on our IT implementation and we took a disciplined approach to improving our customer proposition.”
The company reiterated its previous outlook for a decline in earnings for the fiscal year, with more pressure in the first half of the year. It expects to invest $40 million in its pricing program for the year.