Loblaw Companies (L) Q4 2024 earnings summary

Executive summary

• Achieved full-year revenue of CAD 61.014 billion and adjusted earnings over CAD 2.637 billion, with adjusted EPS up 10.3% year-over-year.

• Opened 52 new food and drug retail stores and 78 pharmacy care clinics in 2024; plans for 80 new stores and 100 new clinics in 2025.

• Repurchased CAD 1.8 billion in shares and increased dividend per share by 13.9%.

• Announced a CAD 10 billion reinvestment plan over five years.

• Marked milestone with first T&T Supermarket opening in the U.S. in Q4 2024.

Financial highlights

• Q4 consolidated revenue grew 2.9% to CAD 14.948 billion; adjusted EBITDA increased 4% to CAD 1.698 billion.

• Adjusted diluted EPS rose 10% to CAD 2.20 in Q4; FY2024 adjusted diluted EPS was CAD 8.55, up 10.3%.

• GAAP net earnings decreased 14.6% in Q4 due to a non-cash charge of CAD 129 million for PC Optimum program liability revaluation.

• Online sales up 18.4% in Q4; full-year online sales up 16.9% to CAD 3.9 billion.

• Retail free cash flow was CAD 828 million in Q4 and CAD 1.5 billion for the year.

Outlook and guidance

• Plan to open 50 hard discount, 30 Shoppers Drug Mart, and 2 T&T stores in 2025, growing square footage by less than 2%.

• Expects 2025 adjusted net earnings per share growth in the high single digits, plus a 2% benefit from an extra week.

• Capital expenditures planned at CAD 2.2 billion (CAD 1.9 billion net of property disposals).

• Guidance incorporates earnings drag from new stores and distribution center ramp-up.

• Intends to return significant free cash flow to shareholders via share repurchases.