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Loblaw tops analysts’ estimates as rising grocery prices still outpace inflation

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A shopper buys produce at a Toronto Loblaw store in this file photo.Ammar Bowaihl/The Globe and Mail

Grocery giant Loblaw Cos. Ltd. L-T reported growth in both sales and profits in the second quarter, beating analysts’ estimates as grocery prices continue to rise, outpacing general inflation.

The Brampton, Ont.-based company reported that sales growth was driven by inflation-weary shoppers continuing to visit its discount grocery stores more frequently, such as No Frills, Maxi, and Real Canadian Superstore.

Loblaw reported that its net earnings available to common shareholders grew to $508-million or $1.58 per share in the second quarter, compared to $387-million or $1.16 per share in the same period the previous year. According to the company, the majority of that 31-per-cent jump in profit was accounted for by an earlier $111-million charge related to a tax matter in its PC Bank business, which significantly reduced the comparable profits in the prior year’s quarter.

Overall, Loblaw’s revenue grew by 6.9 per cent in the 12 weeks ended June 17, to $13.7-billion.

Same-store sales – an important industry metric that tracks sales growth not tied to new store openings – grew by 6.1 per cent at Loblaw’s grocery stores, and 5.7 per cent at drugstores. E-commerce sales grew by 13.9 per cent in the quarter.

Canada’s annual inflation rate eased in June to its lowest level since early 2021, Statistics Canada reported last week, but grocery prices have resisted this trend. While The Consumer Price Index rose by 2.8 per cent in June, down from 3.4 per cent in May, grocery prices rose by 9.1 per cent, nearly matching the 9-per-cent increase in costs reported in May. Food inflation has outpaced the general rate of inflation for more than a year.

Loblaw reported that its own internal food inflation measures were “generally in line” with CPI increases. But the retailer, along with other grocers, has repeatedly said that food is already more expensive before it reaches their stores – with costs pushed up by myriad factors including supply-chain issues, extreme weather events, and geopolitical factors. While overall sales and profits are up, Loblaw contends that the profit margins it makes on each grocery sale have fallen.

“In fact, it’s important to note that once again our food margins are down – our costs are growing faster than our prices as we continue to face unprecedented increases from suppliers and are not passing them all on to customers,” Loblaw spokesperson Catherine Thomas wrote in an emailed statement on Wednesday.

Loblaw’s profit forecast for the year remains unchanged, with the company expecting earnings to grow in the low double digits.

 

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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Canada Goose reports Q2 revenue down from year ago, trims full-year guidance

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TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.

The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.

Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.

On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.

In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.

It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:GOOS)

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