Canadian retailer Loblaw Companies topped Wall Street expectations for fourth-quarter profit, helped by sustained demand for daily essentials and easing input costs.
Loblaw posted a 3.4% rise in its retail segment sales, riding on demand for its beauty products and medicines.
Retailers in Canada have been benefiting from sales of essential items like groceries and pharmaceuticals, and a customer shift to affordable private labels as rising prices had steered them away from big-name brands.
Canada's annual inflation rate slowed more than expected to 2.9% in January, while core price measures have also eased.
The Brampton, Ontario-based company expects its full-year 2024 adjusted earnings per common share to grow in the high single-digits.
Easing supply chain snags and decelerating inflation in Canada are likely to bring down costs for retailers, boosting their margins.
Consumer Spending
With food prices coming down in Canada, analysts expect consumer spending power to grow and boost sales across products, including discretionary items like apparel.
Fourth quarter adjusted earnings per share came in at C$2.00 ($1.49), compared with analysts' average estimate of C$1.90, according to LSEG data.
The company's revenue was C$14.53 billion (€9.88 billion) in the quarter ended 30 December, compared with analysts' expectations of C$14.52 billion (€9.87 billion).
“We are very pleased to deliver another year of consistent operational and financial performance, reflecting our ongoing focus on retail excellence,” said Per Bank, president and chief executive officer of Loblaw Companies Limited.
“Canadians continue to recognize the superior value and service we provide across our network, something all 220,000 of our colleagues are proud to deliver each and every day.”
Investment
Earlier this week, the retailer announced that it expects to invest over C$2 billion (€1.36 billion) this year to create more than 7,500 jobs.
While the investment is in line with last year's, the retailer plans to create roughly 1,500 more jobs in 2024.
Loblaw plans to use the investment to improve its store network by renovating more than 700 stores and building more than 40 others.
