Loblaw Reports Revenue Growth of 5.2% in the Second Quarter, Reflecting Higher Customer Traffic and Unit Sales, and Larger Baskets

Executive Summary

• Loblaw Companies Limited reported unaudited financial results for the second quarter ended June 14, 2025, showing strong revenue growth of 5.2% year-over-year to $14,672 million, driven by higher customer traffic, unit sales, and new store openings.
• Net earnings available to common shareholders surged 56.2% to $714 million ($2.37 per diluted share), significantly outpacing the prior year's $457 million ($1.48 per diluted share), largely due to the full amortization of intangible assets from the 2014 Shoppers Drug Mart acquisition and lower costs.
• The Company announced a 4-for-1 common share stock split to be implemented via a stock dividend, effective August 18, 2025, and declared a quarterly dividend of $0.5643 per common share (pre-split basis).

Key Details

• Revenue: Total revenue was $14,672 million, an increase of $725 million or 5.2%. Excluding the impact of the sold Wellwise business (which contributed $21 million in Q2 2024), revenue increased by 5.4%.
• Retail Segment Sales: Retail segment sales were $14,389 million, an increase of $731 million or 5.4%.
  • Food Retail (Loblaw): Sales were $10,213 million; same-store sales increased by 3.5% (vs 0.2% in 2024). Internal food inflation was lower than the CPI for Food Purchased From Stores (3.3%).
  • Drug Retail (Shoppers Drug Mart): Sales were $4,176 million; same-store sales increased by 4.1% (vs 1.5% in 2024).
    • Pharmacy and healthcare services same-store sales grew 6.2%, led by specialty prescriptions. Prescription volume increased 3.1% and average prescription value increased 3.9%.
    • Front store same-store sales grew 1.7%, driven by beauty and OTC products, partially offset by the exit from certain low-margin electronics categories.
• Earnings & Profitability:
  • Operating income was $1,239 million, an increase of $371 million or 42.7%.
  • Adjusted EBITDA was $1,840 million, an increase of $127 million or 7.4%.
  • Net earnings available to common shareholders were $714 million (up 56.2%); Diluted net earnings per share were $2.37 (up 60.1%).
  • Adjusted net earnings available to common shareholders were $721 million (up 8.6%); Adjusted diluted net earnings per share were $2.40 (up 11.6%).
  • Retail segment gross profit percentage remained stable at 32.0%.
• Capital & Shareholder Returns:
  • Net capital investments were $239 million (Gross capex of $409 million, net of $170 million from property disposals).
  • The Company repurchased 2.05 million common shares for cancellation at a cost of $445 million during the quarter. Year-to-date repurchases totaled 4.5 million shares for $902 million.
  • Free cash flow from the Retail segment was $640 million.
• Operational Updates:
  • Opened 10 new stores and 12 pharmacy clinics in the quarter. Year-to-date totals are 20 new stores and 23 pharmacy clinics.
  • The Company advanced its full-year plan to open approximately 80 new stores and 100 new pharmacy clinics.
  • Successfully executing the ramp-up of the East Gwillimbury distribution centre.
  • Retail square footage increased by 1.2 million square feet (1.7%) to 72.5 million square feet.
• Stock Split: A 4-for-1 common share stock split will be implemented by way of a stock dividend (issuing three additional shares for each share held). It is effective at the close of business on August 18, 2025, for shareholders of record as of August 14, 2025.
• Dividend: A quarterly dividend of $0.5643 per common share (pre-stock split basis) was declared, payable on October 1, 2025, to shareholders of record on September 15, 2025.
• Outlook: The Company expects adjusted net earnings per common share growth in the high single-digits for 2025 (excluding the impact of a 53rd week). Full-year net capital investment is expected to be $1.9 billion.

Notable Quotes

• "Canadians are seeking value, quality and service and are increasingly rewarding us for delivering on their needs, resulting in sales and market share growth," said Per Bank, President and Chief Executive Officer, Loblaw Companies Limited. "We are bringing our value focus to more and more communities across Canada through our new store openings, with 61 new stores opened since last year."