Loblaw opens 31 new Maxi and NoFrills stores in 2023, bringing lower prices and more value to hundreds of thousands more Canadians. Fourth quarter revenue grew 3.7% and net earnings increased 2.3%.

BRAMPTON, ONTARIO February 22, 2024 Loblaw Companies Limited (TSX: L) (“Loblaw” or the “Company”) announced today its unaudited financial results for the fourth quarter ended December 30, 2023(¹) and the release of its 2023 Annual Report. The 2023 Annual Report includes the Company’s audited financial statements and Management’s Discussion and Analysis (“MD&A”) for the fiscal year ended December 30, 2023.

Loblaw delivered another quarter of strong operational and financial results as it maintained its focus on retail excellence. The Company’s value proposition, private label brands, and personalized PC Optimum^TM offers continued to resonate with customers seeking quality and value. This resulted in traffic growth and continued market share momentum in Food Retail. The Company recorded an internal food inflation lower than Canada’s food CPI again this quarter, demonstrating the impact of its continuing investments in value. Additionally, the Company opened 8 more Maxi and NoFrills discount stores in the fourth quarter. Drug Retail sales reflected continued strength in front store beauty products, and strong sales of cough and cold medications. Canadians reacted very positively to the convenience and level of care offered across the Company’s 74 new pharmacy-based clinics, resulting in strong growth of new pharmacist led healthcare services. Operational excellence across the Company’s businesses supported sales growth, provided sequential shrink improvements, and continued the Company’s focused cost discipline, to drive earnings growth. Loblaw’s strategy, unique assets, and dedicated colleagues position it well to best serve the needs of Canadians today and in the future.

“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, 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.”

2023 FOURTH QUARTER HIGHLIGHTS

• Revenue was $14,531 million, an increase of $524 million, or 3.7%.

• Retail segment sales were $14,157 million, an increase of $463 million, or 3.4%.

  • Food Retail (Loblaw) same-stores sales increased by 2.0%.

  • Drug Retail (Shoppers Drug Mart) same-store sales increased by 4.6%,with front store same-store sales growth of 1.7% and pharmacy and healthcare services same-store sales growth of 8.0%.

• E-commerce sales increased by 14.6%.

• Operating income was $943 million, an increase of $72 million, or 8.3%.

• Adjusted EBITDA² was $1,633 million, an increase of $140 million, or 9.4%.

• Retail segment gross profit percentage² was 31.1%, an increase of 50 basis points.

• Net earnings available to common shareholders of the Company were $541 million, an increase of $12 million or 2.3%.

• Diluted net earnings per common share were $1.72, an increase of $0.10, or 6.2%.

• Adjusted net earnings available to common shareholders of the Company² were $630 million, an increase of $55 million, or 9.6%.

• Adjusted diluted net earnings per common share² were $2.00, an increase of $0.24 or 13.6%.

• Net capital investments were $494 million, which reflects gross capital investments of $676 million, net of proceeds from property disposals of $182 million.

• Repurchased for cancellation 4.1 million common shares at a cost of $494 million. Retail free cash flow² was $512 million.

2023 SELECT ANNUAL HIGHLIGHTS

• Revenue was $59,529 million, an increase of $3,025 million, or 5.4%. Food Retail same-store sales increased by 3.9% and Drug Retail same-store sales increased by 5.4%.

• E-commerce sales were approximately $3.3 billion, an increase of 10.7%.

• Net earnings available to common shareholders of the Company were $2,088 million, an increase of $179 million or 9.4%.

• Diluted net earnings per common share were $6.52, an increase of $0.77, or 13.4%.

• Adjusted net earnings available to common shareholders of the Company² were $2,480 million, an increase of $217 million, or 9.6%.

• Adjusted diluted net earnings per common share² were $7.75, an increase of $0.93, or 13.6%.

• Net capital investments were $1,788 million, which reflects gross capital investments of $2,109 million, net of proceeds from property disposals of $321 million.

• Repurchased for cancellation, 14.5 million common shares at a cost of $1,729 million. Retail free cash flow² was $1,694 million.

¹This News Release contains forward-looking information. See “Forward-Looking Statements” section of this News Release and the Company’s 2023 Annual Report for a discussion of material factors that could cause actual results to differ materially from the forecasts and projections herein and of the material factors and assumptions that were used when making these statements. This News Release should be read in conjunction with Loblaw Companies Limited’s filings with securities regulators made from time to time, all of which can be found at sedarplus.ca and at loblaw.ca.

²See “Non-GAAP and Other Financial Measures” section in Appendix 1 of this News Release, which includes the reconciliation of such non-GAAP and other financial measures to the most directly comparable GAAP measures.

³To be read in conjunction with the “Forward-Looking Statements” section of this News Release and the Company’s 2023 Annual Report.