Loblaw's profit falls in second quarter

Shoppers Drug Mart pharmacy division sees faster revenue growth

Loblaw Companies Ltd. eked out more revenue from its diverse retail, financial services and real estate businesses in the second quarter but saw its net profit drop by 14.6% from the same time last year.

The company's net income was $158 million or 39 cents per share, down from $185 million or 44 cents per share.

Loblaw says the main reason for the reduced profit for its common shareholders was higher interest expenses and financing charges.

Its adjusted earnings excluding some items were up from last year, rising to $412 million or $1.01 per share from $350 million or 84 cents per share in last year's second quarter.

Overall revenue was up $196 million or two per cent, rising to $10.73 billion from $10.54 billion a year earlier.

Revenue grew faster at the Shoppers Drug Mart pharmacy division than from food retailing.

Same-store sales at Loblaw's grocery stores rose 0.7% in the quarter, excluding gas bars.

At Shoppers Drug Mart, same-store growth was 4%, with pharmacy up 3.6% and front-store up 4.3%.

Loblaw said that same-store growth was negatively impacted 1% by the timing of Easter.

Sales performance in drug retail remained strong in the quarter," executive chairman and president Galen Weston said in a statement.

He added that "in an increasingly competitive food retail environment, our initiatives are beginning to put money back in the pockets of Canadians."

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