Loblaw Reports Third Quarter 2017 Results¹
BRAMPTON, ON, Nov. 15, 2017 /CNW/ - Loblaw Companies Limited (TSX: L) ("Loblaw" or the "Company") today announced its unaudited financial results for the third quarter ended October 7, 2017. The Company's 2017 Third Quarter Report to Shareholders will be available in the Investors section of the Company's website at loblaw.ca and will be filed with SEDAR and available at sedar.com.
"We delivered solid results in the third quarter in an increasingly competitive market," said Galen G. Weston, Chairman and Chief Executive Officer, Loblaw Companies Limited.
"In an industry that is facing significant financial headwinds, we remain focused on delivering shareholder value. Our strong balance sheet and free cash flow enable us to continue to return capital to shareholders and to invest to bring innovation to Canadian consumers."
2017 THIRD QUARTER HIGHLIGHTS The following highlights include the impacts of the consolidation of franchises, as set out in "Other Retail Business Matters."
Revenue was $14,192 million, an increase of $49 million, or 0.3%, compared to the third quarter of 2016.
Retail segment sales were $13,923 million, an increase of $32 million, or 0.2%, compared to the third quarter of 2016.
Food retail (Loblaw) same-store sales growth was 1.4%, excluding gas bar operations.
Drug retail (Shoppers Drug Mart) same-store sales growth was 3.3%, with pharmacy same-store sales growth of 3.9% and front store same-store sales growth of 2.8%.
Operating income was $1,236 million, an increase of $546 million, or 79.1%, compared to the third quarter of 2016.
Adjusted EBITDA² was $1,229 million, an increase of $86 million, or 7.5%, compared to the third quarter of 2016.
Net earnings available to common shareholders of the Company were $883 million, an increase of $464 million, or 110.7%, compared to the third quarter of 2016. Diluted net earnings per common share were $2.24, an increase of $1.21, or 117.5%, compared to the third quarter of 2016.
Adjusted net earnings available to common shareholders of the Company² were $549 million, an increase of $37 million, or 7.2%, compared to the third quarter of 2016. Adjusted diluted net earnings per common share² were $1.39, an increase of $0.13, or 10.3%, compared to the third quarter of 2016. Normalized for the disposition of gas bar operations, adjusted diluted net earnings per common share² increased by approximately 13.0%. Diluted net earnings per common share growth is higher than adjusted diluted net earnings per common share² growth primarily due to the gain on disposition of gas bar operations.
The Company repurchased 7.2 million common shares at a cost of $485 million.
The Company completed the disposition of its gas bar operations and recognized a post-tax gain of $432 million, net of related costs. The disposition negatively impacted the Company's Retail sales growth by $368 million, Retail adjusted EBITDA² by approximately $20 million and diluted net earnings per common share growth by approximately $0.03 per common share. Gas bar operations were a low gross margin business compared to the Company's overall Retail segment.
President's Choice Bank ("PC Bank"), a wholly owned subsidiary of the Company, entered into an agreement to end its relationship with a major Canadian chartered bank, which represented the personal banking services offered under the President's Choice Financial® brand. The agreement did not have a significant impact on the adjusted net earnings available to common shareholders of the Company² in the third quarter of 2017.
Note: This is an excerpt from the full release. To view the complete document, please download the full Q3 2017 news release.
¹This News Release contains forward-looking information. See "Forward-Looking Statements" section of this News Release for a discussion of material factors that could cause actual results to differ materially from the forecasts and projections herein and of the material factors and assumptions that were used when making these statements. This News Release should be read in conjunction with Loblaw Companies Limited's filings with securities regulators made from time to time, all of which can be found at sedar.com and at loblaw.ca.
²See "Non-GAAP Financial Measures" section of this News Release, which includes the reconciliation of such non-GAAP measures to the most directly comparable GAAP measures.
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