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Loblaw抯 profit beats expectations as Shoppers Drug Mart boosts pharmacy salesThursday, November 13, 2014 > 09:46:03
Loblaw Companies Ltd, Canada’s largest grocer, reported a better-than-expected quarterly profit, boosted by strong pharmacy sales at its recently acquired Shoppers Drug Mart business.
Loblaw, majority-owned by George Weston Ltd, bought Shoppers Drug Mart Corp last year to better compete against the expanding Canadian businesses of U.S.-based rivals such as Wal-Mart Stores Inc and Target Corp.
Same-store front sales grew 2.5% at Shoppers Drug Mart in the third quarter ending Oct. 4 from a year earlier, higher than Loblaw’s overall 1.6% growth.
Loblaw’s revenue increased 36% to $13.6 billion. Shoppers Drug Mart contributed a quarter of that.
The merger saved Loblaw about $44 million in the quarter, but it incurred $46 million in costs related to restructuring and reorganization.
Net earnings fell to $142 million from $150 million.
Adjusted basic net earnings was 90 cents per share.
Analysts on average had expected a profit of 87 cents on revenue of $13.60 billion, according to Thomson Reuters I/B/E/S.
Brampton, Ontario-based Loblaw’s stock has risen about 37% this year up to Tuesday’s close.