BRAMPTON, ON - After strategic moves such as the completed acquisition of the Shoppers Drug Mart Corporation, Loblaw Companies Limited posted a successful spike in revenue for its first quarter of the 2015 fiscal year.
"In 2015 we continue to execute against the clear strategic framework we set out a year ago," Galen G. Weston, Executive Chairman & President of Loblaw Companies Limited, said in the report. "Our entire organization is focused on delivering the best in food, the best in health and beauty, operational excellence and growth. Although the grocery industry remains highly competitive and health care reform continues to challenge our pharmacy business, we are maintaining stable business performance, gaining incremental efficiencies, delivering synergies on schedule, deleveraging the balance sheet and achieving continued earnings growth."
According to the report, Loblaw’s overall revenue for the quarter, which ended March 22, was C$10.05 billion (U.S. $8.3 billion), an almost C$3 billion (just over U.S. $2 billion) boost (37.8%) from the same time last year. The company’s net income was up 21.7% from this time in 2014, rising to C$146 million (U.S. $121 million). Its adjusted net income was up 96.7%, totalling in C$301 million (U.S. $250 million).
Same-store sales for the company’s food retail grew 4%, excluding 1.2% from gas bar and a .8% negative impact when it changed its distribution model by a tobacco supplier, as listed in the quarterly report.
Food retail same-store sales growth, with these impacts included, was 2.0%, a significant jump from 0.9% in 2014.
Financial highlights from the first quarter included:
- Consolidated sales of C$10,048 million (U.S. $8,350 million), an increase of 37.8% compared to the first quarter of 2014.
- Consolidated adjusted EBITDA(2) of C$789 million (U.S. $656 million), an increase of 63.7% compared to the first quarter of 2014.
- Retail segment sales of C$9,830 million (U.S. $8,168 million), an increase of 38.5% compared - to the first quarter of 2014, including C$2,596 million (U.S. $2156 million) of retail sales contributed by Shoppers Drug Mart.
- Financial Services revenue of C$199 million (U.S. $165 million), an increase of 10.6% compared to the first quarter of 2014.
- Choice Properties Real Estate Investment Trust’s adjusted funds from operations(2) of C$75 million (U.S. $62 million), an increase of 8.7% compared to the first quarter of 2014.
- Adjusted basic net earnings per common share(2) of $0.73, an increase of 35.2% compared to the first quarter of 2014.
- During the first quarter of 2015, the Company realized approximately C$44 million (U.S. $37 million) of net synergies.
- In the first quarter of 2015, free cash flow(2) was C$144 million (U.S. $1196 million) compared to negative free cash flow of CA $282 million (US $234 million) in the first quarter of 2014.
- During the first quarter of 2015, adjusted debt(2) increased by C$43 million (U.S. $36 million), primarily driven by normal seasonal working capital requirements. The Company remains on track to meet its debt reduction target.
- Quarterly common share dividend increase of approximately 2.0% from $0.245 per common share to $0.250 per common share.
Plans the company has for the future include growing its consolidated adjusted net earnings (2) (including synergies) relative to 2014, invest approximately C$1,200 million (U.S. $997 million) in capital expenditure programs, and remain on track with its deleveraging target with expectations to meet its target in the first quarter of 2016.
In addition, as we previously reported, Loblaw plans to open 50 new stores and invest C$1.2 billion into its Canadian business in 2015. This investment will include construction projects for dozens of new and existing stores, e-commerce expansion, and continued investment in supply chain and IT infrastructure.
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