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Like many other Canadian retailers, Loblaw has lost market share
to bigger rivals like Wal-Mart and Amazon and faces a hit next
year from rises in minimum wages in its home state of Ontario.
It beat analysts' expectations for third-quarter profit and
revenue thanks largely to a rise in same-store sales at its
Shoppers Drug Mart outlets, which rose 3.3 percent in the
quarter, up from 2.8 percent growth a year ago.
Same-store sales growth at its Loblaw groceries was flat at 1.4
percent in the quarter ended Oct. 7 compared with the
year-earlier period.
Loblaw said the store closures would come across its brands and
formats and would largely be completed by the end of the first
quarter of 2018.
It had earlier said it would cut 500 jobs, planning to reinvest
the savings in its digital and e-commerce offering.
The Brampton, Ontario-based retailer expects to record charges
for the layoffs and store closures of approximately C$135
million, most of which will be factored into its fourth-quarter
earnings.
It also expects annualized savings of about C$85 million from
the changes.
Excluding items, the company earned C$1.39 per share for the
third quarter, beating analysts' average estimate of C$1.30 per
share, according to Thomson Reuters I/B/E/S.
Revenue was flat at C$14.19 billion, but beat analysts' estimate
of C$14.10 billion.
($1 = 1.2742 Canadian dollars)
(Reporting by Taenaz Shakir, additional reporting by Nishara
Karuvalli Pathikkal in Bengaluru; Editing by Martina D'Couto and
Patrick Graham)
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