BRAMPTON, ON, Nov. 14, 2018 /CNW/ - Loblaw Companies Limited (TSX: L) ("Loblaw" or the "Company") today announced its unaudited financial results for the third quarter ended October 6, 2018. The Company's 2018 Third Quarter Report to Shareholders will be available in the Investors section of the Company's website at loblaw.ca and will be filed with SEDAR and available at sedar.com(Open in a new tab).

"We delivered strong financial results in the third quarter and we are pleased with the performance across our retail business," said Galen G. Weston, Chairman and Chief Executive Officer, Loblaw Companies Limited. "Our strategy continues to build momentum as our data-driven insights and process and efficiency initiatives enable us to make additional investments in our future."

2018 THIRD QUARTER HIGHLIGHTS

The third quarter of 2018 included the negative impacts of minimum wage increases and incremental healthcare reform. The following highlights also reflect the impact of the consolidation of franchises, the disposition of gas bar operations and the acquisition of Canadian Real Estate Investment Trust ("CREIT") by Choice Properties' Real Estate Investment Trust ("Choice Properties").

• Revenue was $14,453 million, an increase of $261 million, or 1.8%, compared to the third quarter of 2017.

• Normalized for the disposition of the gas bar operations, Retail segment sales were $14,105 million, an increase of $235 million, or 1.7%, compared to the third quarter of 2017.

  • Food retail (Loblaw) same-store sales growth was 0.9%, excluding gas bar operations.

  • Drug retail (Shoppers Drug Mart) same-store sales growth was 2.5%, with pharmacy same-store sales growth of 0.5% and front store same-store sales growth of 4.3%.

• Operating income was $797 million, a decrease of $439 million, or 35.5%, compared to the third quarter of 2017.

• Adjusted EBITDA² was $1,321 million, an increase of $92 million, or 7.5%, compared to the third quarter of 2017.

• Net earnings available to common shareholders of the Company were $106 million, a decrease of $777 million, or 88.0%, compared to the third quarter of 2017. Diluted net earnings per common share were $0.28, a decrease of $1.96, or 87.5%, compared to the third quarter of 2017.

  • Net earnings available to common shareholders of the Company were negatively impacted year-over-year by the charge related to Glenhuron Bank Limited ("Glenhuron") in the third quarter of 2018 and the prior year gain on disposition of gas bars operations.

• Adjusted net earnings available to common shareholders of the Company² were $562 million, an increase of $13 million or 2.4%, compared to the third quarter of 2017.

  • Normalized for the disposition of gas bar operations, adjusted net earnings available to common shareholders of the Company² increased by approximately $17 million, primarily driven by the performance of the Retail segment and the impact of the decrease in the adjusted income tax rate² attributable to the Company's proportionate interest in Choice Properties, which declined as a result of the acquisition of CREIT.

• Adjusted diluted net earnings per common share² were $1.49, an increase of $0.10, or 7.2% compared to the third quarter of 2017.

  • Normalized for the disposition of gas bar operations, adjusted diluted net earnings per common share² increased by approximately 8.0% or $0.11 per common share primarily due to the factors noted above and the favourable impact of the repurchase of common shares.

• The Company did not repurchase common shares in the third quarter of 2018.

Choice Properties completed the acquisition of CREIT in the second quarter of 2018. In the third quarter of 2018, the acquisition resulted in increases in consolidated revenue of approximately $101 million, adjusted EBITDA² of approximately $73 million, adjusted net interest expense² and other financing charges of approximately $68 million and adjusted net earnings available to common shareholders of the Company² of $3 million. The acquisition had a nominal impact on adjusted diluted net earnings per common share² in the third quarter of 2018.

The disposition of the Company's gas bar operations, in the third quarter of 2017 had a negative year-over-year impact on financial performance in the third quarter of 2018. The disposition negatively impacted Retail sales growth by $123 million, adjusted EBITDA² by approximately $5 million, adjusted net earnings available to common shareholders of the Company² by approximately $4 million and adjusted diluted net earnings per common share² by approximately $0.01. Net earnings available to common shareholders of the Company in the third quarter of 2017 included a post-tax gain of $432 million, net of related costs from the disposition.

Note: This is an excerpt from the full release. To view the complete document, please download the full Q3 2018 news release(Open in a new tab).

¹ This News Release contains forward-looking information. See "Forward-Looking Statements" section of this News Release 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 sedar.com(Open in a new tab) and at loblaw.ca.

² See "Non-GAAP Financial Measures" section of this News Release, which includes the reconciliation of such non-GAAP measures to the most directly comparable GAAP measures.