By Adriano Marchese

Loblaw reported higher profit and revenue growth in-line with expectations in the fourth quarter as customers continued to flock to its discount banners in response to persistently higher food prices in Canada.

The Canadian grocery and pharmacy giant reported on Thursday earnings available to common shareholders of 541 million Canadian dollars ($400.6 million), or C$1.72 a share, up from C$529 million, or C$1.62 a share, in the comparable quarter a year ago.

Adjusted earnings rose to C$2.00 a share. According to FactSet, analysts were expecting a more modest rise to C$1.90 a share.

Revenue rose 3.7% to C$14.53 billion, in line with analyst expectations, with food retail same-store sales rising 2% while its drug retail saw same-store sales rise 4.6%. Pharmacy and healthcare services same-store sales growth came in at 8%.

In the quarter, the consumer price index for food purchased from stores was 4.9%, compared with 11.2% a year earlier, which it said was higher than the company's internal food inflation. Loblaw saw food traffic in its grocery stores rise, but basket size per customer decreased, it said.

Loblaw said its portfolio of businesses remains strong and well-positioned as economic pressures continue to drive consumers to search for more value across its banners.

It added that the company will focus more on its discount business by bringing its NoFrills and Maxi brands to more communities and neighborhoods across the country.

Looking ahead to the full 2024 year, on the capital expenditures front, Loblaw has set a figure of C$1.8 billion to continue investing in its store network and distribution centers.

Loblaw expects its retail business to grow earnings faster than sales, with adjusted net earnings per share growth expected to be in the high single-digits.

It also said it plans to return capital to shareholders by allocating a significant portion of free cash flow to share repurchases in the year.

Write to Adriano Marchese at

(END) Dow Jones Newswires

02-22-24 0736ET