Loblaw Companies (L) investor relations material

Executive summary

• Revenue grew 5.2% year-over-year to $14.67B, driven by higher traffic, larger baskets, and new store openings, with strong digital and pharmacy growth.

• Adjusted EBITDA rose 7.4% to $1.84B, with margin improving to 12.5%; adjusted diluted EPS increased 11.6% to $2.40.

• Announced a 4-for-1 stock split effective August 18, 2025, to enhance share accessibility.

• Opened 20 of 80 planned new stores and 23 pharmacy clinics year-to-date, with hard discount and supermarket banners gaining market share.

• E-commerce sales rose 17.5% year-over-year, with digital and pharmacy segments delivering double-digit growth.

Financial highlights

• Retail segment sales increased 5.4% to $14.39B; Food Retail same-store sales up 3.5%, Drug Retail same-store sales up 4.1%.

• Operating income rose 42.7% to $1.24B; adjusted net earnings available to common shareholders grew 8.6% to $721M.

• Free cash flow from retail reached $640M; net capital investments were $239M.

• Retail gross margin stable at 32%; SG&A as a percentage of sales decreased by 10 bps to 19.8%.

• Return on equity reached 24.7%, and return on capital was 11.9%.

Outlook and guidance

• Expects retail earnings to grow faster than sales in 2025, with adjusted net EPS growth in the high single digits, excluding the 53rd week benefit.

• Q3 is off to a strong start, though food retail comps expected to be slightly lower than Q2 but still healthy.

• Plans net capital expenditures of $1.9B for the year and continued significant share repurchases.

• 53rd week in 2025 expected to add 2% to adjusted net EPS growth.

• No upward revision to guidance yet due to early timing and ongoing uncertainties; update expected with Q3 results.