Loblaw Companies (L) Q2 2025 earnings summary

Executive summary

• Revenue grew 5.2% year-over-year to CAD 14.5 billion, driven by higher customer traffic, unit sales, larger baskets, and strong contributions from new store openings and digital platforms.

• Adjusted EBITDA increased 7.4% to CAD 1.8 billion, and adjusted diluted EPS rose 11.6% to CAD 2.40.

• Opened 20 of 80 planned new stores and 23 of 100 new pharmacy clinics for the year, with new stores and banner conversions driving both absolute and same-store sales growth.

• Hard discount and supermarket banners gained market share, with traffic, unit sales, and basket size all increasing.

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

Financial highlights

• Retail segment sales increased 5.4% to CAD 14.4 billion; Food Retail same-store sales up 3.5%, Drug Retail same-store sales up 4.1%.

• Adjusted EBITDA up 7.4% to CAD 1.8 billion; retail adjusted EBITDA margin up 10 bps to 12.2%.

• Adjusted diluted EPS up 11.6% to CAD 2.40; GAAP EPS up 60% due to completed Shoppers Drug Mart amortization.

• Free cash flow from retail segment increased to CAD 640 million; net capital investments were CAD 239 million.

• Return on equity at 24.7%, return on capital at 11.9%, both improving.

Outlook and guidance

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

• Q3 off to a good start, but guidance not raised due to macro uncertainty; 53rd week in 2025 expected to add approximately 2% to adjusted net EPS growth.

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

• New store activity to drive top-line growth in the second half; focus remains on retail excellence and strategic execution.