Loblaw Eyes Target Locations as Q4 2014 Profit More Than Doubles
BRAMPTON, ON - Loblaw revealed Thursday that its Q4 2014 profit more than doubled and revenue saw a nearly 50% increase. This profit outpaced analyst expectations, as it continued to benefit from its Shoppers Drug Mart Corp. acquisition.
Loblaw said Q4 earnings jumped to C$247 million (approximately $197 million U.S.), or 59 Canadian cents a share, from C$114 million (approximately $91 million U.S.), or 40 Canadian cents a year earlier, according to The Wall Street Journal.
"While the competitive intensity in grocery remains high, and the regulatory environment in health care remains challenging, we believe we are well-positioned to achieve stable earnings growth," said Galen G. Weston, President and Executive Chairman of Loblaw
Following the release of its Q4 earnings, Loblaw has also announced it is considering taking over Target locations in Canada. As we’ve previously reported, Target has recently announced its decision to close all 133 of its Canadian locations. Loblaw says the number of acquired Target locations will not be “significant or material” to its overall growth strategy, according to The Globe and Mail.
"The (Target) network of stores has been out and on the market for many, many years in one way, shape or form," Weston told analysts in a call Thursday. "Their network is not particularly complementary to the Loblaw network, (but) we have a team looking at the assets. We have identified the number of stores that could be complementary."
According to The Globe and Mail, Weston said this announcement is due in part to the company expecting that business will be hurt by the liquidation sales currently going on at Target.
Other highlights from Loblaw’s financial report, according to Nasdaq, include:
- Adjusted net earnings for the quarter was C$396 million (approximately $317 million U.S.) or C$0.96 per basic share.
- Revenues for Q4 surged 49.4% to C$12.41 billion (approximately $9.9 billion U.S.) .
- Revenue excluding Shoppers Drug Mart grew 9.4 percent to C$8.36 billion from last year (approximately $6.6 billion U.S.).
- Looking ahead to fiscal 2015, the company expects to grow consolidated adjusted net earnings.
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