Business

Loblaw hikes dividend on higher grocery sales — but no plans to bring back pandemic pay hike, too – CBC.ca

Published

4 years ago

November 13, 2020

Loblaw Cos. Ltd. is seeing significantly higher sales across all of its brands of grocery stores, enough to hike the company’s dividend to shareholders even as it sticks by a decision to roll back a $2-per-hour pay bump for workers.

The grocery retailer reported higher profit and sales for the three-month period up to the start of October, with same-store sales at Loblaws, Zehrs, Your Independent Grocer, Real Atlantic Superstore and Provigo up 9.7 per cent, and 4.7 per cent at discount brands No Frills and Maxi. Which means company-wide, the chain “continued with its 2020 winning streak,” Loblaw president Sarah Davis said.

The company said that eight months into the pandemic, it looks like Canadians are grocery shopping less often, but buying more when they do.

“At the height of the pandemic, there would have been the panic buying,” Davis said during a conference call with investors. “But I would say now, through Q2 and Q3, it’s stabilized and people are just buying bigger-size packs.”

Revenue totalled $15.67 billion, up from nearly $14.66 billion in the same quarter a year earlier.

But some of those higher sales were offset by roughly $85 million in COVID-19-related expenses, and higher labour costs associated with booming e-commerce sales from home delivery.

That translated to an adjusted profit $464 million, or $1.30 per diluted share, up from an adjusted profit of $458 million, or $1.25 per diluted share, a year ago.

All in all, the company was confident enough with its financial performance to boost its dividend by two cents a share, to 33.5 cents.

Sales were up across all of Loblaw’s various grocery store brand names, company president Sarah Davis said. (Cole Burston/Bloomberg)

The company did not, however, see fit, to reinstate the $2-an-hour pay raise it gave workers early on in the pandemic before rolling it back in June.

There have been calls to bring the so-called COVID pay back for front-line retail workers, but a spokesperson for Loblaw said the company has no plans to do so.

“The temporary pay premium, introduced at the height of the panic buying and uncertainty, was never about safety. It was a recognition of extraordinary effort. Our stores are now operating at a normal pace, albeit in a new way. Importantly, we have invested far more in our colleagues and customers during this pandemic than we have earned in extra sales,” Catherine Thomas told CBC news in an emailed statement, referring to the $85 million in COVID-19-related costs.

“Those investments will continue well into the future…. The company remains absolutely committed to its investments in colleague and customer well-being. Any suggestion of profiteering is untrue and ignores the facts.”

Higher costs

The company has been squeezing suppliers, too, informing them that the cost of getting products on shelves would go up in January.

Citing plans to invest $6 billion in improving its in-store and digital operations over the next five years, the company said in a supplier letter that the grocery business has become “more challenging and costly to operate.”

Analysts say those costs are likely to be passed on to customers, but the company told suppliers that it is committed to protecting customers from the risk of higher prices.

Galen Weston, executive chairman of Loblaw, reiterated the retailer’s pledge to avoid price increases on Thursday.

“The company remains steadfast in its commitment to put customers and colleagues first, as we sustained investments and safety measures at store level, while resisting pressure to raise prices at a time when Canadians need value more than ever,” he told investors.

Finance professor Stephen Foerster at the Ivey Business School in London, Ont., said there are no easy answers to what the company should do, but there is nothing wrong with viewing shareholders as the primary stakeholders.

“If the optics look bad, that can hurt a company’s brand, and ultimately profitability and ultimately shareholders,” he said in an interview.

“The challenge is to strike that balance to make sure employees and other stakeholders are fairly treated.”

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Business

Roots sees room for expansion in activewear, reports $5.2M Q2 loss and sales drop

Published

1 day ago

September 13, 2024

Anne Joseph

TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.

The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.

“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.

The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.

But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.

Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.

“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.

“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”

Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.

The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.

In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.

Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.

The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.

The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.

Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.

Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.

It will also re-evaluate its design ranks.

Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.

Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:ROOT)

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Business

Talks on today over HandyDART strike affecting vulnerable people in Metro Vancouver

Published

2 days ago

September 12, 2024

Anne Joseph

VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.

No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.

About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.

Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.

Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.

A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”

This report by The Canadian Press was first published Sept. 12, 2024.

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Business

Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

Published

2 days ago

September 12, 2024

Anne Joseph

MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.

The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.

The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.

Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.

On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.

Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.

This report by The Canadian Press was first published Sept. 12, 2024.

Companies in this story: (TSX:TRZ)

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