Loblaw Companies (L) Q2 2025 earnings summary

Executive summary

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

• Adjusted EBITDA increased 7.4% to CAD 1.8 billion; adjusted diluted EPS rose 11.6% to CAD 2.40, while GAAP EPS increased 60% due to completed Shoppers Drug Mart amortization.

• Hard discount and supermarket banners, especially T&T and Real Canadian Superstores, gained market share, with strong performance from both new and existing locations.

• E-commerce sales rose 17.5% year-over-year, and 20 of 80 planned new stores and 23 pharmacy-led clinics were opened year-to-date.

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

Financial highlights

• Revenue up 5.2% year-over-year to CAD 14.5 billion; excluding Wellwise divestiture, growth would have been 5.4%.

• Adjusted EBITDA increased 7.4% to CAD 1.8 billion; retail adjusted EBITDA up 6.7%.

• Adjusted diluted EPS grew 11.6% to CAD 2.40; GAAP EPS up 60% due to amortization benefit.

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

• Retail gross margin stable at 32%; SG&A rate improved by 10 basis points to 19.8%.

Outlook and guidance

• Confident in delivering full-year outlook; Q3 off to a strong start, though food comp expected slightly lower than Q2.

• 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.

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

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

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