A slew of new discount stores helped push profit at Loblaw Cos. Ltd. higher in the second quarter, as shoppers continue to seek lower-priced products, a trend the company’s CEO says will remain for the long term.<\/p>\n
“Our hard discount stores: They’re doing well and they’re still leading and doing better compared to the rest of the portfolio,” Loblaw chief executive Per Bank told analysts on a conference call Thursday.<\/p>\n
He said Canadians are increasingly seeking promotions and private-label products, driving up sales at the grocer’s discount stores.<\/p>\n
“The global shift toward discount retail is a long-term trend and we are leading it here in Canada,” Bank said.<\/p>\n
Earlier this year, Loblaw announced its plan to spend $2.2 billion, opening 80 new grocery and pharmacy stores, with about 50 of them being smaller-format discount stores. So far, the company has opened 20 new stores and 23 new pharmacy clinics.<\/p>\n
The parent company of Loblaws and Shoppers Drug Mart said its net earnings available to common shareholders amounted to $714 million or $2.37 per diluted share for the quarter ended June 14. The result was up from a profit of $457 million or $1.48 per diluted share in the second quarter of 2024.<\/p>\n
Despite the upbeat quarterly results, Loblaw did not upgrade its guidance, with chief financial officer Richard Dufresne saying it was too early to do so.<\/p>\n
\u201cThere’s still a lot of uncertainty out there, so we thought it’d be more prudent to wait,\u201d he told analysts.<\/p>\n
The company could update its financial guidance in its third-quarter results, Dufresne said.<\/p>\n
Bank said the company is continuing to strengthen its local supply chain, onboarding another 130 Canadian vendors onto its network.<\/p>\n
The ongoing tariff dispute with the United States and the trend of shoppers favouring Canadian made products has led many grocers to increase their local offerings.<\/p>\n
Earlier this year, Loblaw began highlighting domestic products in its stores while also marking products that have seen price hikes due to tariffs with a “T” symbol. It also added a “swap and shop” feature to its loyalty app to help shoppers find Canadian products more easily.<\/p>\n
\u201cAs intended, it has helped our customers by clearly identifying tariff items, supporting Canada, and saving money,\u201d Bank said.<\/p>\n
Sales volume on items labelled with a \u201cT\u201d were down more than 15 per cent, he said.<\/p>\n
“There’s some misconception that the tariffs are no longer a factor in grocery,” he said. “Nothing could actually be further from the truth.”<\/p>\n
Story Continues <\/p>\n
Bank said about a third of all supplier cost increase requests are tariff related.<\/p>\n
On an adjusted basis, Loblaw said it earned $2.40 per diluted share in its latest quarter, up from an adjusted profit of $2.15 per diluted share a year earlier.<\/p>\n
Analysts on average had expected an adjusted profit of $2.33 per diluted share, according to LSEG Data & Analytics.<\/p>\n
Revenue for the quarter totalled $14.7 billion, up from $13.9 billion, as food retail same-store sales rose by 3.5 per cent.<\/p>\n
The company said sales growth was driven by new store openings and improved same-store sales, with “impactful promotions driving higher customer engagement.”<\/p>\n
Drug retail same-store sales rose 4.1 per cent, with pharmacy and health care services same-store sales up 6.2 per cent, and front store same-store sales increasing 1.7 per cent.<\/p>\n
RBC analyst Irene Nattel called it “another solid quarter” for the company, noting food revenues were “a string bean ahead of forecast.”<\/p>\n
Separately, Loblaw announced a four-for-one stock split, citing continued affordability and accessibility of its shares for investors. Over the past year, Loblaw shares have risen more than 30 per cent to trade just above $220.<\/p>\n
This report by The Canadian Press was first published July 24, 2025.<\/p>\n
Companies in this story: (TSX: L)<\/p>\n
Ritika Dubey, The Canadian Press<\/p>\n","protected":false},"excerpt":{"rendered":"A slew of new discount stores helped push profit at Loblaw Cos. Ltd. higher in the second quarter,…\n","protected":false},"author":2,"featured_media":21171,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[45,49,48,17762,17761,1415,17764,17763],"class_list":["post-21170","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-ca","tag-canada","tag-diluted-share","tag-discount-stores","tag-loblaw","tag-richard-dufresne","tag-shoppers-drug-mart"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/21170","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=21170"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/21170\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/21171"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=21170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=21170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=21170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}