Despite what it described as a double-digit supplier cost increase and continued shrink, Loblaws had financial numbers go its way in the second quarter.
The Canadian retailer banked on strong results with its private label brands for a net earning increase of 31.3% compared to Q2 2022. Adjusted net earnings were up 10.6% ($626 million) year-over-year and the adjusted EBITDA increased 9.4% to over $1.6 billion. Revenue was $348 million for the quarter, an increase of 17.2%.
Loblaws is committed to private label expansion in the coming months, as the company will add another 25 No Frills stores to its network.
“The ongoing shift to discount continued to pick up steam driving high growth in our stores,” Loblaw Chairman and President Galen Weston said during the quarterly earnings call. “Our hard discount locations have never been busier with our highest-ever customer counts.”
The only heavy number on Loblaw’s Q2 budget sheet was operating income, which went up 14.1% to $925 million.
Other than that, the breakdown was positive: Retail segment sales increased 6.7% ($848 million) vs. Q2 2022, same-store sales for food retail increased 6.1%, and drug retail same-store sales grew by 5.7% led by pharmacy and healthcare services same-store, which grew 6.2%.
For the rest of 2023, Loblaw expects its retail business to grow earnings faster than sales, and will continue to put money back into the network — $1.6 billion will be invested in stores and distribution centers.
