Loblaw Companies on Thursday forecast annual earnings above analysts’ expectations, after the Canadian retailer’s fourth-quarter results beat estimates, helped by strength in its pharmacy business and as demand held up for groceries.
The company’s fourth-quarter revenue rose about 10 per cent to $14.01 billion Cdn, topping estimates of $13.75 billion.
On an adjusted basis, Loblaw earned $1.76 Cdn per share, beating analysts’ expectations of $1.71 per share.
Retailers are leaning on sales of food and medicines as rising prices are forcing consumers to prioritize spending on essentials and trade down to cheaper private-label alternatives from higher-priced brands.
Loblaw posted a 9.7 per cent rise in retail segment sales, reflecting strong growth in its food and drug businesses, with steady demand for cough and cold medicines, as well as high-margin beauty and cosmetics products.
Retail bellwether Walmart Inc., however, forecast its full-year earnings below estimates on Tuesday, and warned that tight spending by consumers could pressure profit margins.
Loblaw, on the other hand, expects its full-year 2023 adjusted earnings per common share to grow in the low double-digits compared with the average analyst estimate of 9.64 per cent, according to Refinitiv IBES data.
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