Weston’s Outlook is Positive

Article Excerpt

GEORGE WESTON LIMITED $54.15 (Toronto symbol WN; SI Rating: Above average) operates two distinct business divisions: Weston Foods, which includes fresh and frozen bakeries in North America, as well as dairy operations in Ontario; and a 63% interest in Loblaw Companies, Canada’s largest food distributor. In the three months ended October 6, 2007, revenues rose 0.8%, to $10.16 billion from $10.09 billion a year earlier. Earnings per share excluding unusual items fell 25.8%, to $1.21 from $1.63. The performance of Loblaw continues to hurt Weston’s results. Weston’s 63% interest in Loblaw is valued at $5.9 billion, and accounts for 84% of its $7 billion market capitalization. Loblaw is now doing a better job of supplying its stores, and is making progress on its plan to cut down on general merchandise it carries. It’s also remodelling stores and cutting costs. However, it will still take several more months before it starts to realize the benefits of its restructuring. Meanwhile, strong price competition from other…

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