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Loblaw Profits Rise as T&T Purchase helps lift sales

Canada's largest supermarket operator says profit jumped 25.7 per cent to $137 million, or 50 cents a share, in the three months ended March 28.

Sales grew 3.1 per cent to $6.926 billion, Loblaw Cos. Ltd. also said, driven largely by the acquisition of the Asian-Canadian supermarket chain T&T Supermarkets Inc.

Sales at stores open more than a year, considered a key measure of retail performance, grew just 0.3 per cent, the operator of Loblaws, Real Canadian Superstore, No Frills and Zehrs said.

"The company remains on track with its renewal program," Loblaw executive chairman Galen Weston said. "Our major investment in information technology and supply chain will now start to ramp up. As previously announced, we expect these investments to negatively impact 2010 operating income".

T&T contributed 2 per cent of the sales growth, Loblaw said. Loblaw bought T&T in the third quarter of 2009.

Sales of food were flat, due partly to internal food price deflation, the company said. Sales growth in pharmacy was moderate while growth in its line of Joe Fresh clothing was strong.

The earnings report was released before the stock market opened.




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