WRAPUP 1-Loblaw profit falls as rival Metro posts increase
* Metro Q4 EPS C$1.46 vs 83 cents year earlier
* Loblaw Q3 EPS 77 Canadian cents vs 83 cents
* Same-store sales up 1.1 pct at Metro, Loblaw off 0.2 pct
Nov 14 (Reuters) - Loblaw Cos Ltd, Canada's biggest grocer, raised its dividend even as it reported lower quarterly profit on Wednesday, while rival Metro Inc said its profit rose, helped by an extra week in the quarter and a recent acquisition.
Loblaw's sales at established stores fell 0.2 percent in the third quarter. Still, it raised its dividend by 1 cent to 22 Canadian cents a share.
Loblaw's operating margin slipped to 4.1 percent from 4.3 percent as labor and other operating costs rose.
Loblaw, majority-owned by George Weston Ltd, said net earnings fell to C$222 million, or 77 Canadian cents a share, from C$236 million, or 83 Canadian cents, a year earlier. Revenue rose 1.0 percent to C$9.83 billion.
Analysts looked for earnings of 78 Canadian cents a share on revenue of C$9.84 billion.
Loblaw has been spending to secure the loyalty of its customers as competition heats up, paying to improve its product assortment and customer service and holding back on price increases even as input costs rise.
For the full year, Loblaw expects to make incremental investments of C$50 million ($50 million) in what it calls its "customer proposition," up from C$40 million previously.
Much of the competition is coming from Wal-Mart Stores Inc . Its Canadian unit said in February it would remodel or open 73 stores by the end of 2012, its most ambitious expansion ever. It was slated to open 28 new stores in October, and has been converting many existing locations to "supercenters" that feature a wider array of grocery items.
METRO SAME-STORE SALES UP
Loblaw's smaller rival, Metro, said net earnings rose to C$145.1 million, or C$1.46 a share, from C$84.4 million, or 83 Canadian cents.
Excluding closure costs and other items, adjusted earnings rose 24.8 percent to C$123.4 million, or C$1.24 a share. Analysts, on average, expected earnings of C$1.18 a share, according to Thomson Reuters I/B/E/S.
Metro, which also competes with Empire Co Ltd's Sobeys, sees competition remaining strong in 2013.
In its fiscal fourth quarter fiscal ended Sept. 29, Metro's sales and profit margin were boosted by its purchase of a 55 percent stake in Mediterranean food seller Marche Adonis and its distributor Phoenicia Products in October 2011.
Same-store sales rose 1.1 percent in the quarter ended Sept. 29, and gross profit margin increased to 18.5 percent from 17.7 percent a year earlier.
Metro's sales climbed 11.1 percent to C$2.94 billion, compared with the analysts' consensus target of C$2.88 billion. Excluding the extra week in the latest quarter, sales rose 2.5 percent.
- Tweet this
- Share this
- Digg this