George Weston Reports Strong Operating Performance Offset by Earnings Impact of Fair Value Adjustment Related to Choice Properties Unit Price Gain of 4.9%

Executive Summary

• George Weston Limited (GWL) reported its consolidated unaudited results for the 12 weeks ended June 14, 2025, showing strong operational performance offset by significant fair value adjustments related to Choice Properties.
• Consolidated revenue increased 5.2% to $14,823 million, while Adjusted EBITDA rose 6.5% to $1,923 million.
• Reported net earnings available to common shareholders decreased to $258 million ($1.96 per share) from $400 million ($2.97 per share) in the prior year, primarily due to an unfavorable fair value adjustment of the Trust Unit liability driven by a rise in Choice Properties' unit price.
• Adjusted net earnings available to common shareholders increased 1.8% to $401 million ($3.06 per adjusted diluted share), reflecting underlying operational strength in Loblaw and Choice Properties.

Key Details

• Consolidated Financials (12 Weeks Ended June 14, 2025):
  • Revenue: $14,823 million (up 5.2% from $14,091 million).
  • Adjusted EBITDA: $1,923 million (up 6.5% from $1,806 million).
  • Net earnings available to common shareholders: $258 million ($1.96 per share) vs. $400 million ($2.97 per share) prior year.
  • Adjusted net earnings available to common shareholders: $401 million ($3.06 per adjusted diluted share) vs. $394 million ($2.93 per share) prior year.
  • GWL Corporate free cash flow: $293 million.
• Loblaw Segment Performance:
  • Revenue: $14,672 million (up 5.2%).
  • Adjusted EBITDA: $1,838 million (up 7.4%).
  • Food retail same-store sales growth: 3.5% (vs. 0.2% prior year).
  • Drug retail same-store sales growth: 4.1% (vs. 1.5% prior year).
  • Pharmacy and healthcare services same-store sales growth: 6.2%.
  • Store openings: 10 food/drug stores and 12 pharmacy clinics opened in the quarter; year-to-date total is 20 new stores and 23 pharmacy clinics.
  • Capital expenditure guidance for 2025: Net amount of $1.9 billion (gross investments of ~$2.2 billion, net of ~$300 million from property disposals).
• Choice Properties Segment Performance:
  • Revenue: $351 million (up 4.5%).
  • Funds from Operations (FFO): $192 million (up 3.8%).
  • Net loss: $154 million (vs. net income of $514 million prior year), driven by a $737 million unfavorable change in fair value adjustment on Exchangeable Units due to unit price increases.
  • Transactions: Advanced strategic priorities through $427 million in transactions.
  • 2025 Outlook: Targeting stable occupancy, Same-Asset NOI growth of 2-3%, and FFO per unit diluted of $1.05-$1.06.
• Corporate Actions & Shareholder Returns:
  • Share Repurchases: Purchased and cancelled 1.1 million common shares for $295 million under the Normal Course Issuer Bid (NCIB).
  • Stock Split: Board approved a 3-for-1 common share stock split, implemented via stock dividend. Effective August 18, 2025, for shareholders of record as of August 14, 2025.
  • Dividend Declaration: Declared quarterly dividend of $0.8938 per common share (pre-split basis), payable October 1, 2025, to shareholders of record September 15, 2025.
• Adjusting Items Impact:
  • Unfavorable impact of $149 million ($1.14 per share) primarily from the $462 million fair value adjustment of the Trust Unit liability and $39 million reversal of a transaction-related provision.
  • Favorable impact from $253 million lapping of prior year class action lawsuit settlements and $41 million lower amortization of intangible assets (Shoppers Drug Mart).