Canadian supermarket retailer Loblaw Companies missed third-quarter revenue estimates, hurt by a slowdown in the demand for its non-essential goods such as household items and electronics.
Consumers have been holding back on discretionary spending as prices remain relatively high despite inflationary trends declining, hurting demand for higher-end brands offered by retailers such as Loblaw.
However, demand for value deals has helped Loblaw's discount banners such as No Frills and Maxi.
'Drug front store sales reflected continued strength in the beauty category but were pressured by the Company's exit from certain low margin electronics categories and lower customer spend on convenience items,' the company said.
Quarterly Highlights
Same-store sales in the food retail segment grew 0.5% in the third quarter, compared with 4.5% a year ago.
The company's quarterly revenue rose to C$18.54 billion (€12.42 billion) from C$18.27 billion (€12.24 billion) a year earlier, compared with analysts' average estimates of C$18.65 billion (€12.50 billion), according to data compiled by LSEG.
Loblaw's adjusted earnings per share was C$2.50 (€1.68) in the third quarter, topping expectations of C$2.45 (€1.64).
The company's e-commerce sales increased 18.5% during the quarter.
Per Bank, president and chief executive of Loblaw Companies Limited, stated, “Increased customer traffic to our stores this quarter demonstrates that we are delivering the value, quality and service our customers count on.
“Our relentless focus on retail excellence allows us to provide great value to Canadians and invest to deliver future growth, while delivering strong financial results.”
In the second quarter, the Canadian retailer missed analysts' expectations, hurt by soft demand for some household items and non-essential products such as apparel.
News by Reuters, additional reporting by ESM.
