Q3 2024 Loblaw Companies Ltd Earnings Call Transcript
Key Points
- Loblaw Companies Ltd (LBLCF) reported a revenue growth of 1.5% to $18.5 billion and an adjusted EBITDA increase of 7.4%.
- Adjusted diluted net earnings per share grew by 10.6% to $2.50, with GAAP net earnings increasing by 25% due to a $125 million recovery related to a PC bank commodity tax matter.
- The company opened 29 new Maxi and NoFrills stores in the quarter, with plans to open 20 more in Q4, contributing to a strong expansion strategy.
- Online sales saw the highest growth rate in 2.5 years, increasing by 18.5%, with grocery delivery outperforming as a channel.
- Loblaw Companies Ltd (LBLCF) achieved significant improvements in shrink management, contributing to a 30 basis point increase in total retail gross margin to 30.9%.
- Both consolidated revenue and same-store sales were negatively impacted by the shift in Thanksgiving, which occurred in Q4 this year versus Q3 last year.
- The weaker Canadian dollar is affecting inflation, particularly in fresh categories, leading to higher than normal price increases from global vendors.
- The decision to exit low-margin electronics categories, including laptops, computers, TVs, and cameras, is expected to impact front store sales by 1% in 2024.
- Front store same-store sales in drug retail declined by 0.5% year over year, with additional pressure expected from exiting game consoles and games.
- Despite improvements, shrink management in the drug retail sector is not progressing at the same pace as in food retail, indicating ongoing challenges.
Good morning, ladies and gentlemen, and welcome Loblaw's third-quarter 2024 results conference call.
(Operator Instructions)
I would now like to turn the conference over to Mr. Roy MacDonald. Please go ahead.
Thank you, Jamie, and good morning, everybody. Welcome to the Loblaw Companies Limited third-quarter 2024 results conference call.
I'm joined this morning by Per Bank, our President and Chief Executive Officer; and by Richard Dufresne, our Chief Financial Officer.
So before we begin the call, I want to remind you that today's discussion will include forward-looking statements, which may include or are not limited to statements with respect to Loblaw's anticipated future results. These statements are based on assumptions and reflect management's current expectations. As such, are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from our expectations. These risks and uncertainties are
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