Loblaw Companies (L) Q1 2025 earnings summary

Executive summary

• Achieved strong financial and operational performance in Q1 2025, with consolidated revenue up 4.1% to CAD 14.1 billion and adjusted diluted EPS rising 9.3% to CAD 1.88.

• Food Retail same-store sales rose 2.2%, Drug Retail same-store sales increased 3.8%, with pharmacy and healthcare services same-store sales up 6.4%.

• E-commerce sales grew 17.4% year-over-year, reflecting strong digital engagement across food and pharmacy.

• Strategic investments in new stores and banner conversions, with 10 new stores and 4 new pharmacies opened, supporting top-line growth and future earnings.

• Ongoing efforts to address inflationary pressures and tariff impacts, with active supplier collaboration and transparency initiatives.

Financial highlights

• Consolidated revenue grew 4.1% year-over-year to CAD 14.1 billion.

• Adjusted EBITDA increased 3% to CAD 1.6 billion; retail adjusted EBITDA up 4.1%.

• Adjusted diluted EPS rose 9.3% to CAD 1.88; GAAP EPS up 12.9%.

• Retail gross margin stable at 31.5%; SG&A rate improved by 10 basis points.

• Free cash flow used in retail was CAD 264 million, reflecting typical Q1 seasonality.

Outlook and guidance

• Expects adjusted net earnings per share growth in the high single digits for 2025, excluding the 53rd week benefit.

• Strong start to Q2 with same-store sales in both food and drug retail running ahead of Q1.

• Majority of new store openings scheduled for the second half of 2025, supporting further growth.

• Retail business anticipated to grow earnings faster than sales; net capital expenditures planned at $1.9 billion.

• Significant portion of free cash flow to be allocated to share repurchases.