George Weston Q2 profit drops on weakness at Loblaw, bakery division

George Weston Ltd. says its second-quarter net income plunged 77.6% to $28 million and adjusted earnings slipped to $210 million, below analyst estimates on both counts.

The Toronto-based grocery, pharmacy and bakery company says its net income per share dropped to 21 cents from $160 million or $1.23 per share in last year's second quarter

After excluding some items, Weston's adjusted earnings fell to $210 million or $1.63 per share for the 12 weeks ended June 16, down from $216 million or $1.63 per share a year earlier

George Weston's sales slipped to $11.2 billion, mostly from the company's Loblaw division, down 1.7% from $11.4 billion in last year's second quarter. Sales at Weston Foods dropped 8.1% to $468 million from $509 million.

Analysts had estimated George Weston would have $1.40 per share of net income and $1.68 per share of adjusted earnings, according to Thomson Reuters Eikon.

Last week, Loblaw announced costs related to the acquisition of Canadian Real Estate Investment Trust and non-operating factors pushed down its net income by 86.1%.

Loblaw's adjusted earnings were down 5.6%, at $421 million or $1.11 per share, but ahead of analyst estimates.

George Weston said Tuesday the CREIT acquisition had nominal impact on its net earnings attributable to common shareholders, but there was a bigger impact from the underlying performance of its Loblaw and Weston Foods divisions.