Loblaw Earnings Show Positive Relative Strength
Today Loblaw reported its earnings for Q1, and the company also announced an increase in its quarterly dividend. The company's stock price has shown a significant relative strength, and the company has several new initiatives planned.
The company reported a 40% drop in net earnings, $103 million compared to $171 million in the same quarter of 2013. However, gross revenues were actually higher this year. Gross revenue for Q1 increased 9.1% due to its financial services, including credit card receivable balances and increased interest income.
In an effort to bolster future sales, the grocer is expanding its e-commerce by testing a "click-and-collect" program at three of its Toronto stores. This will enable customers to buy groceries online and then pick up their orders at store locations. An increase in its fresh food offerings and the addition of 100 juice bars in Ontario locations are some if its other initiatives.
The company faced several adversities last quarter, including a decline in the use of generic drugs and a drop in reimbursement rates for generic drugs due to regulatory reforms. Additionally, there has been stiff competition from rivals such as Sobeys, Metro, Wal-Mart, and Target.
With the stock rising about 3% today after news of the lower earnings, this stock has shown investors good relative strength and its higher gross revenue indicates that the company is still in a very strong position.
Loblaw
