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Loblaw reports better-than-expected profit

(Dave Bedard photo)

Reuters — Canadian grocery and pharmacy retailer Loblaw Cos. Ltd. reported a better-than-expected quarterly profit on Wednesday, as expenses fell and discounting attracted more shoppers.

Profit at Loblaw’s main retail unit was helped by lower selling, general and administrative costs, and an increase in same-store sales in the quarter ending Oct. 8, the company said.

The company, whose chains include Loblaws, Real Canadian Superstore, Shoppers Drug Mart, Extra Foods, Maxi and Provigo, among others, booked “modest” retail same-store sales growth in food, at 1.4 per cent, during the quarter.

Loblaw also noted its average quarterly internal food price index declined and came in lower than the average quarterly national food price inflation of 0.2 per cent.

“We lowered prices and consumers responded,” executive chairman Galen Weston said in a statement.

Loblaw, which sells everything from grocery to wireless mobile products, said revenue climbed 1.4 per cent to $14.14 billion in the third quarter ended Oct. 8, edging past the average analyst estimate of $14.12 billion, according to Thomson Reuters I/B/E/S.

The company’s adjusted net earnings attributable to shareholders rose to $512 million or $1.26 per share, from $408 million, or 98 cents per share a year earlier.

Analysts on average had expected a profit of $1.12 per share.

During the 12 months ending Oct. 8, Loblaw noted, it opened 44 food and drug stores and closed 69, driven mainly by the store closure plan it announced in 2015.

Reporting for Reuters by John Benny in Bangalore. Includes files from Network staff.

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