This past Thursday Canadian retailer Loblaw Companies Limited announced its unaudited financial results for the fourth quarter ended 12.31.22 and the release of its 2022 Annual Report – Financial Review.

Loblaw continued to deliver strong financial and operating results in the fourth quarter. Retail segment sales grew 9.7% reflecting strong growth in both Food and Drug businesses. Drug Retail sales growth was driven by continued strong demand for cough and cold products and strength in high-margin beauty and cosmetics categories. Food Retail sales reflected the Company’s efforts to provide value to its customers. The Company’s Discount stores outperformed, benefiting from an increased consumer focus on price. Market stores extended strong performance relative to peers with impactful promotional strategies. Gross margins were slightly lower, largely related to the no name price freeze and increased commitment to promotional activity, partially offset by continued strength in higher-margin front-store sales in the Drug business. Higher sales and leverage from focused cost control measures drove earnings growth in the quarter.

“Loblaw used its assets to provide value to customers in a period of continued inflation,” said Galen G. Weston, Chairman, and President, Loblaw Companies Limited. “Consumers responded favorably to those efforts and continued to benefit from our extensive private label offering, leading loyalty program, and targeted promotions.”

Shoppers reacted positively to the retailer’s sharp pricing on private brand in the fourth quarter, which helped drive a 9.7% increase in retail sales.

2022 FOURTH QUARTER HIGHLIGHTS

• Revenue was $14,007 million, an increase of $1,250 million, or 9.8%.
• Retail segment sales were $13,694 million, an increase of $1,208 million, or 9.7%. Food Retail (Loblaw) same-store sales increased by 8.4%. ◦ Drug Retail (Shoppers Drug Mart) same-store sales increased by 8.7%, with front store same-store sales growth of 11.5% and pharmacy same-store sales growth of 5.4%.
• E-commerce sales increased by 8.3%.
• Operating income was $871 million, an increase of $166 million, or 23.5%.
• Adjusted EBITDA² was $1,493 million, an increase of $169 million, or 12.8%.

2022 SELECT ANNUAL HIGHLIGHTS

• Revenue was $56,504 million, an increase of $3,334 million, or 6.3%.
• Food Retail same-store sales increased by 4.7% and Drug Retail same-store sales increased by 6.9%.
• E-commerce sales were approximately $3 billion, a decrease of 3.8%, lapping elevated online sales due to lockdowns last year.
• Net earnings available to common shareholders of the Company were $1,909 million, an increase of $46 million or 2.5%. Diluted net earnings per common share were $5.75, an increase of $0.30, or 5.5%.