BRAMPTON, ON, Feb. 20, 2020 /CNW/ - Loblaw Companies Limited (TSX: L) ("Loblaw" or the "Company") announced today its unaudited financial results for the fourth quarter ended December 28, 2019 and the release of its 2019 Annual Report – Financial Review ("Annual Report"). The report includes the Company's audited consolidated financial statements and Management's Discussion and Analysis ("MD&A") for the fiscal year ended December 28, 2019. The Company's 2019 Annual Report will be available in the Investors section of the Company's website at loblaw.ca and will be filed on SEDAR and available at sedar.com(Open in a new tab).

"Our sales trajectory continued to improve through the fourth quarter, completing a year in which we achieved our financial targets and made significant strategic investments," said Galen G. Weston, Executive Chairman, Loblaw Companies Limited. "We will continue these investments through 2020, positioning Loblaw to deliver long-term shareholder value."

2019 FOURTH QUARTER HIGHLIGHTS

Unless otherwise indicated, the following highlights represent the Company's results from Continuing Operations and include the impacts of spin-out related depreciation, the implementation of IFRS 16, "Leases" ("IFRS 16"), and the consolidation of franchises. See "Other Business Matters" of this News Release for more information on the spin-out related depreciation and the implementation of IFRS 16.

• Revenue was $11,590 million. When compared to the fourth quarter of 2018, this represented an increase of $372 million, or 3.3%.

• Retail segment sales were $11,321 million. When compared to the fourth quarter of 2018, this represented an increase of $345 million, or 3.1%.

  • Food retail (Loblaw) same-store sales growth was 1.9%. Food retail same-store sales growth was approximately 0.8% after excluding the favourable impact of the timing of Thanksgiving.

  • Drug retail (Shoppers Drug Mart) same-store sales growth was 3.9%, with pharmacy same-store sales growth of 6.1% and front store same-store sales growth of 2.2%. The timing of Thanksgiving had a nominal impact on same-store sales growth for Drug retail in the fourth quarter of 2019.

• Operating income was $541 million. When compared to the fourth quarter of 2018, this represented an increase of $96 million, or 21.6%.

  • Operating income included the year-over-year favourable impact of the implementation of IFRS 16 of approximately $73 million and the total unfavourable impact of spin-out related depreciation of approximately $21 million. Normalized for these impacts, operating income increased by $44 million, or 9.9%.

• Adjusted EBITDA² was $1,205 million. When compared to the fourth quarter of 2018, this represented an increase of $310 million, or 34.6%.

  • Adjusted EBITDA² included the year-over-year favourable impact of the implementation of IFRS 16 of $285 million. Normalized for this impact, adjusted EBITDA² increased by $25 million, or 2.8%.

• Net earnings available to common shareholders of the Company from Continuing Operations were $254 million. When compared to the fourth quarter of 2018, this represented an increase of $26 million. Diluted net earnings per common share from Continuing Operations was $0.70. When compared to the fourth quarter of 2018, this represented an increase of $0.09, or 14.8%.

• Adjusted net earnings available to common shareholders of the Company² from Continuing Operations were $395 million. When compared to the fourth quarter of 2018, this represented an increase of $7 million. Normalized for the year-over-year impact of the spin-out related depreciation of approximately $12 million and IFRS 16 of approximately $3 million, adjusted net earnings available to common shareholders of the Company² increased by $22 million, or 5.7%.

• Adjusted diluted net earnings from Continuing Operations per common share² were $1.09. When compared to the fourth quarter of 2018, this represented an increase of $0.06, or 5.8%. Normalized for the year-over-year impact of the spin-out related depreciation of approximately $0.03 per common share and IFRS 16 of approximately $0.01 per common share, adjusted diluted net earnings per common share² increased by approximately 9.6% or $0.10 per common share.

• In the fourth quarter of 2019, the Company repurchased 2.3 million common shares at a cost of $163 million.

• In the fourth quarter of 2019, the Company invested $426 million in capital expenditures and generated $272 million of free cash flow².

2019 SELECT ANNUAL HIGHLIGHTS

Relative to the Company's 2019 Outlook, on a full-year comparative basis, excluding the impact of the spin-out of Choice Properties, the Company:

• Delivered Food retail same-store sales growth of 1.1% and Drug Retail same-store sales growth of 3.6%. Adjusted gross profit percentage² in the Retail segment was 29.7%, compared to 29.4% in 2018;

• Delivered adjusted net earnings available to common shareholders of the Company²

  from Continuing Operations of $1,580 million after normalizing for the impact of the spin-out related depreciation. When compared to 2019, this represented growth of 2.7%;

• Invested approximately $1,100 million in capital expenditures, net of proceeds from property disposals; and

• Returned capital to shareholders by allocating a significant portion of the Company's free cash flow of approximately $1,210 million to share repurchases. In 2019, the Company repurchased 13.6 million common shares at a cost of $937 million.

Note: This is an excerpt from the full release. To view the complete document, please download the full Q4 2019 news release(Open in a new tab).

¹ This News Release contains forward-looking information. See "Forward-Looking Statements" section of this News Release and the Company's 2019 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 sedar.com(Open in a new tab) and at loblaw.ca.

² See Section 17 "Non-GAAP Financial Measures" of the Company's 2019 Annual Report, which includes the reconciliation of such non-GAAP measures to the most directly comparable GAAP measures.