Loblaw cuts costs

Article Excerpt

LOBLAW COMPANIES $73.65 (Toronto symbol L; Shares outstanding: 407.5 million; Market cap: $29.5 billion; TSINetwork Rating: Above Average; Dividend yield: 1.4%; www.loblaw.ca) currently operates over 1,100 supermarkets and 1,300 Shopper Drug Mart pharmacies across Canada. The company continues to thrive despite a highly competitive Canadian retail industry. Since its $12.3 billion purchase of Shoppers Drug Mart in March 2014, Loblaw has cut $300 million a year in overlapping costs. Thanks to the savings, the company’s earnings in the three months ended June 18, 2016, rose 17.7%, to $412 million from $350 million a year earlier. Earnings per share gained 20.2%, to $1.01 from $0.84, on fewer shares outstanding. Overall sales rose 1.9%, to $10.73 billion from $10.54 billion. Same-store sales at Loblaw’s supermarkets rose 0.7%. Higher customer traffic offset lower food prices. Shoppers’ same-store sales gained 4.0%. That reflects a 3.6% rise in prescription drug sales and a 4.3% increase in the sale of other merchandise. Loblaw will probably earn…