BRAMPTON, ONTARIO July 28, 2021 Loblaw Companies Limited (TSX: L) (“Loblaw” or the “Company”) announced today its unaudited financial results for the second quarter ended June 19, 2021. The Company’s 2021 Second Quarter Report to Shareholders 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.

“In the second quarter, Loblaw delivered strong financial performance while lapping the heightened sales and significant COVID-related costs experienced at the beginning of the pandemic,” said Galen G. Weston, President and Chairman, Loblaw Companies Limited. “We maintained our focus on delivering value and quality to Canadians while providing a safe shopping experience, and are well-positioned to meet the evolving needs of customers as the pandemic restrictions begin to lift.”

Grocery demand continued to benefit from elevated eat-at-home trends in the quarter. Across Loblaw’s grocery stores, the Company continued to deliver superior value through its unmatched network of stores and online pick-up or delivery options. This was reflected as the Company recorded volume share gains in the second quarter, continuing its positive momentum in the grocery business. The drug store division continued to see variability in its prescription business and reduced consumer demand for high-value items like cosmetics in its front-store business due to lockdowns. The Company has experienced higher food and convenience sales during the pandemic, with muted acute-prescription and beauty sales. This trend is showing signs of rebalancing as economies re-open across Canada. With a heightened focus on its core retail businesses, including improved promotional effectiveness and cost control, Loblaw delivered another quarter of operational and financial improvements.

Loblaw continues to believe that through its everyday business decisions it has an opportunity and responsibility to have a positive effect in the communities in which it operates. That long-standing sense of responsibility has led the Company to be a corporate responsibility leader and drive change in areas that matter to Canadians. The publication of the Company’s 14th annual Corporate Social Responsibility (“CSR”) report(Open in a new tab) in the second quarter marks a transition to begin reporting its corporate responsibility actions under an Environmental, Social and Governance (“ESG”) framework. The 2020 CSR report contains new disclosures and targets that demonstrate the Company’s commitment to ESG transparency, leadership and risk management. 2021 SECOND QUARTER HIGHLIGHTS Unless otherwise indicated, the following highlights include the impact of COVID-19.

• Revenue was $12,491 million. This represented an increase of $534 million, or 4.5% when compared to the second quarter of 2020.

• Retail segment sales were $12,282 million. This represented an increase of $514 million, or 4.4% when compared to the second quarter of 2020.

  • Food Retail (Loblaw) same-stores sales declined by 0.1%.

  • Drug Retail (Shoppers Drug Mart) same-store sales increased by 9.6%, with pharmacy same-store sales growth of 17.2% and front store same-store sales growth of 3.6%.

• The two year sales Compound Average Growth Rate (“CAGR”)⁵ was 6.3% and 5.7% for Food Retail and Drug Retail, respectively.

• The Company’s e-commerce sales declined by 0.5% (2020 – grew by 280%) due to the lapping of the high penetration rates in the second quarter of 2020.

• COVID-19 related costs were approximately $70 million (2020 – $282 million), inclusive of approximately $25 million (2020 – $180 million) related to one-time bonuses and benefits for store and distribution centre colleagues.

• Retail segment adjusted gross profit percentage² was 30.9%. This represented an increase of 130 basis points compared to the second quarter of 2020.

• Operating income was $752 million. This represented an increase of $348 million, or 86.1% when compared to the second quarter of 2020.

• Adjusted EBITDA² was $1,371 million. This represented an increase of $363 million, or 36% when compared to the second quarter of 2020.

• Net earnings available to common shareholders of the Company were $375 million. This represented an increase of $206 million, or 121.9% when compared to the second quarter of 2020. Diluted net earnings per common share were $1.09. This represented an increase of $0.62, or 131.9% when compared to the second quarter of 2020.

• Adjusted net earnings available to common shareholders of the Company² were $464 million. This represented an increase of $204 million, or 78.5% when compared to the second quarter of 2020.

• Adjusted diluted net earnings per common share² were $1.35. This represented an increase of $0.63, or 87.5% when compared to the second quarter of 2020. The two year adjusted diluted net earnings per common share CAGR⁵ was 15.0%.

• The Company repurchased, for cancellation, 4.8 million common shares at a cost of $350 million and 10.2 million common shares at a cost of $700 million on a year-to-date basis.

• Quarterly common share dividend to be increased by 9%, from $0.335 per common share to $0.365 per common share.

• The Company invested $258 million in capital expenditures and generated $953 million of free cash flow².

• The Company expanded its loyalty program by allowing PC Optimum^TM members to also redeem PC Optimum^TM points at Esso stations across Canada effective January 18, 2022.

• As disclosed in the 2020 CSR Report published in the second quarter, the Company was recognized as one of Canada’s Greenest Employers (2021) for the second consecutive year, and reduced carbon emissions by 30.9%, surpassing its original 2030 target ten years early; reduced food waste sent to landfill by 86% surpassing the original 2025 target; sourced approximately $1 billion in local Canadian produce for the first time; and committed to increase gender and racial diversity at the Board of Directors, executive and management levels.

Note: This is an excerpt from the full release. To view the complete document, please download the full Q2 2021 news release(Open in a new tab).

¹This News Release contains forward-looking information. See “Forward-Looking Statements” section of this News Release and the Company’s 2021 Second Quarter Report to Shareholders 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 and at loblaw.ca.

²See Section 11 “Non-GAAP Financial Measures” of the Company’s 2021 Second Quarter Report to Shareholders, which includes the reconciliation of such non-GAAP 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 2021 Second Quarter Report to Shareholders.

⁴Certain figures have been restated due to the non-GAAP financial measures policy change. See section 11 “Non- GAAP Financial Measures” of the Company’s 2021 Second Quarter Report to Shareholders.

⁵Compound Average Growth Rate (“CAGR”) is the measure of annualized growth over a period longer than one year. CAGR as disclosed by the Company is the mean annual growth rate over a two year period, 2019 to 2021.