Canadian retailer Loblaw Companies missed analysts' expectations for second-quarter revenue, hurt by soft demand for some household items and non-essential products such as apparel.
The company said the decline in front-store same-store sales was primarily driven by lower sales of food and household items and the decision to exit certain low-margin electronics categories.
Customers in Canada have been trimming expenses even on essential items as high housing and interest rates continued to eat into their income.
The country's retail sales fell in May mainly due to a drop in sales at supermarkets and grocery retailers, according to Statistics Canada.
But many deal-hunting consumers have helped boost food sales growth at Loblaw's discount banners such as No Frills and Maxi.
Quarterly Highlights
The company's revenue rose 1.5% to C$13.95 billion ($10.08 billion) but fell short of analysts' average estimate of C$14.17 billion, according to LSEG data.
Net income fell to C$457 million, or C$1.48 per share, in the second quarter from C$508 million, or $1.58 per share, a year earlier.
“Our commitment to provide value, quality, and service has been recognised by our customers, as traffic was up across our network of stores,” said Per Bank, president and chief executive officer of Loblaw Companies Limited.
In the first quarter, the Canadian food and pharmacy retailer topped expectations for first-quarter revenue and profit, aided by sustained consumer demand well as easing prices of grocery items.
The Brampton, Ontario-based company reported a 4.4% rise in its retail segment sales in the first quarter, echoing strong growth in its food and drug businesses.
News by Reuters, additional reporting by ESM.
