BRAMPTON, ONTARIO November 17, 2021 Loblaw Companies Limited (TSX: L) (“Loblaw” or the “Company”) announced today its unaudited financial results for the third quarter ended October 9, 2021. The Company’s 2021 Third 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 third quarter, our focus on core retail execution and an enthusiastic consumer response drove another quarter of strong financial results,” said Galen G. Weston, President and Chairman, Loblaw Companies Limited. “As the country emerges from pandemic-related lockdown, our portfolio of supermarkets and drug stores positions us well to meet the evolving needs of Canadians.”

Loblaw experienced strong demand in stores and online, as economies re-opened and eat-at-home trends remained elevated. Seasonal shopping for back-to-school and Thanksgiving was robust, demonstrating an enthusiastic return to certain pre-pandemic routines. This was also evident in our Pharmacy businesses. Beauty sales climbed with the gradual return to social and work activities. In addition, drug sales grew, supported by demand for pharmacy services, including patient health consultations, vaccination administration and testing.

Loblaw’s focus on its core retail business drove another strong quarter of operational and financial improvement – characterized by increases in customer traffic and market share in Loblaw’s Food and Drug businesses. Customers have responded positively to our data driven mass and personalized promotions, enabling us to deliver value where consumers and their families need it most. Online sales remain above pre-pandemic levels and are on track to exceed $3 billion in 2021, improving on last year’s performance.

In the quarter, Loblaw continued its efforts to make a positive impact in the communities in which it operates.

• The Company continued its efforts to reduce food waste by

  • Donating more than 1.5 million pounds of food through our food rescue partner Second Harvest. Reducing food waste and helping those in need.

  • Launching a new Insiders Project Docuseries(Open in a new tab) “Half Full” and “Ripe” to educate and help consumers reduce food waste at home.

  • Partnering with the Zoo Share project in Ontario which aims to convert 15,000 tonnes of food waste and 2,000 tonnes of zoo manure into enough renewable power for approximately 250 homes while reducing greenhouse gas emissions by as much as 20,000 tonnes per year.

• The President’s Choice^® brand expanded Canada’s most extensive line of plant-based products, launching ten new products offering great-tasting meat and dairy alternatives.

• The Company signed the new Bangladesh Accord on Building and Fire Safety Agreement (the International Accord) to continue to support safer working conditions.

• In support of women’s health, Shoppers Drug Mart announced a three-year commitment to make period products free and accessible in Ontario schools.

2021 THIRD QUARTER HIGHLIGHTS

Unless otherwise indicated, the following highlights include the impact of COVID-19.

• Revenue was $16,050 million. This represented an increase of $379 million, or 2.4% when compared to the third quarter of 2020.

• Retail segment sales were $15,831 million. This represented an increase of $367 million, or 2.4% when compared to the third quarter of 2020.

  • Food Retail (Loblaw) same-stores sales increased by 0.2%.

  • Drug Retail (Shoppers Drug Mart) same-store sales increased by 4.4%, with pharmacy same-store sales growth of 4.8% and front store same-store sales growth of 4.1%.

• The two year sales Compound Average Growth Rate (“CAGR”)⁵ was 4.5% and 5.5% for Food Retail and Drug Retail, respectively.

• The Company’s e-commerce sales decreased by 0.4% (2020 – 175%) due to the lapping of high e-commerce sales in the third quarter of 2020.

• COVID-19 related costs were approximately $19 million (2020 – approximately $85 million).

• Retail segment adjusted gross profit percentage² was 30.7%. This represented an increase of 140 basis points compared to the third quarter of 2020.

• Operating income was $863 million. This represented an increase of $145 million, or 20.2% when compared to the third quarter of 2020.

• Adjusted EBITDA² was $1,674 million. This represented an increase of $156 million, or 10.3% when compared to the third quarter of 2020.

• Net earnings available to common shareholders of the Company were $431 million. This represented an increase of $89 million, or 26.0% when compared to the third quarter of 2020. Diluted net earnings per common share were $1.27. This represented an increase of $0.31, or 32.3% when compared to the third quarter of 2020.

• Adjusted net earnings available to common shareholders of the Company² were $540 million. This represented an increase of $81 million, or 17.6% when compared to the third quarter of 2020.

• Adjusted diluted net earnings per common share² were $1.59. This represented an increase of $0.31, or 24.2% when compared to the third quarter of 2020. The two year adjusted diluted net earnings per common share CAGR⁵ was 13.7%.

• The Company repurchased, for cancellation, 3.4 million common shares at a cost of $300 million and 13.6 million common shares at a cost of $1,000 million on a year-to-date basis.

• The Company invested $330 million in capital expenditures and generated $455 million of free cash flow².

Note: This is an excerpt from the full release. To view the complete document, please download the full Q3 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 Third 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 Third 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 Third 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 Third 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.