Loblaw opens 31 new Maxi and NoFrills stores in 2023,
bringing lower prices and more value to hundreds of thousands more
Canadians. Fourth quarter revenue grew 3.7% and net earnings
increased 2.3%.
BRAMPTON, ON, Feb. 22,
2024 /CNW/ - Loblaw Companies Limited (TSX: L)
("Loblaw" or the "Company") announced today its unaudited financial
results for the fourth quarter ended December 30, 2023(1) and the release
of its 2023 Annual Report. The 2023 Annual Report includes the
Company's audited financial statements and Management's Discussion
and Analysis ("MD&A") for the fiscal year ended December 30, 2023.
Loblaw delivered another quarter of strong operational and
financial results as it maintained its focus on retail excellence.
The Company's value proposition, private label brands, and
personalized PC Optimum™ offers continued to resonate with
customers seeking quality and value. This resulted in traffic
growth and continued market share momentum in Food Retail. The
Company recorded an internal food inflation lower than Canada's food CPI again this quarter,
demonstrating the impact of its continuing investments in value.
Additionally, the Company opened 8 more Maxi and
NoFrills discount stores in the fourth quarter. Drug Retail
sales reflected continued strength in front store beauty products,
and strong sales of cough and cold medications. Canadians reacted
very positively to the convenience and level of care offered across
the Company's 74 new pharmacy-based clinics, resulting in strong
growth of new pharmacist led healthcare services. Operational
excellence across the Company's businesses supported sales growth,
provided sequential shrink improvements, and continued the
Company's focused cost discipline, to drive earnings growth.
Loblaw's strategy, unique assets, and dedicated colleagues position
it well to best serve the needs of Canadians today and in the
future.
"We are very pleased to deliver another year of consistent
operational and financial performance, reflecting our ongoing focus
on retail excellence," said Per
Bank, President and Chief Executive Officer, Loblaw
Companies Limited. "Canadians continue to recognize the superior
value and service we provide across our network, something all
220,000 of our colleagues are proud to deliver each and every
day."
2023 FOURTH QUARTER HIGHLIGHTS
- Revenue was $14,531 million, an
increase of $524 million, or
3.7%.
- Retail segment sales were $14,157
million, an increase of $463
million, or 3.4%.
- Food Retail (Loblaw) same-stores sales increased by 2.0%.
- Drug Retail (Shoppers Drug Mart) same-store sales increased by
4.6%, with front store same-store sales growth of 1.7% and pharmacy
and healthcare services same-store sales growth of 8.0%.
- E-commerce sales increased by 14.6%.
- Operating income was $943
million, an increase of $72
million, or 8.3%.
- Adjusted EBITDA(2) was $1,633
million, an increase of $140
million, or 9.4%.
- Retail segment gross profit percentage(2) was 31.1%,
an increase of 50 basis points.
- Net earnings available to common shareholders of the Company
were $541 million, an increase of
$12 million or 2.3%.
- Diluted net earnings per common share were $1.72, an increase of $0.10, or 6.2%.
- Adjusted net earnings available to common shareholders of the
Company(2) were $630
million, an increase of $55
million, or 9.6%.
- Adjusted diluted net earnings per common share(2)
were $2.00, an increase of
$0.24 or 13.6%.
- Net capital investments were $494
million, which reflects gross capital investments of
$676 million, net of proceeds from
property disposals of $182
million.
- Repurchased for cancellation 4.1 million common shares at a
cost of $494 million. Retail free
cash flow(2) was $512
million.
2023 SELECT ANNUAL HIGHLIGHTS
- Revenue was $59,529 million, an
increase of $3,025 million, or
5.4%.
- Food Retail same-store sales increased by 3.9% and Drug Retail
same-store sales increased by 5.4%.
- E-commerce sales were approximately $3.3
billion, an increase of 10.7%.
- Net earnings available to common shareholders of the Company
were $2,088 million, an increase of
$179 million or 9.4%.
- Diluted net earnings per common share were $6.52, an increase of $0.77, or 13.4%.
- Adjusted net earnings available to common shareholders of the
Company(2) were $2,480
million, an increase of $217
million, or 9.6%.
- Adjusted diluted net earnings per common share(2)
were $7.75, an increase of
$0.93, or 13.6%.
- Net capital investments were $1,788
million, which reflects gross capital investments of
$2,109 million, net of proceeds from
property disposals of $321
million.
- Repurchased for cancellation, 14.5 million common shares at a
cost of $1,729 million. Retail free
cash flow(2) was $1,694
million.
See "News Release
Endnotes" at the end of this News Release.
|
CONSOLIDATED AND SEGMENT RESULTS OF OPERATIONS
The following table provides key performance metrics for the
Company by segment.
|
|
|
2023
|
|
|
|
2022
|
|
|
|
(12
weeks)
|
|
|
|
(12 weeks)
|
For the periods ended
December 30, 2023 and December 31, 2022
|
|
|
Retail
|
|
Financial
Services
|
|
Elimi-
nations
|
|
Total
|
|
|
|
Retail
|
|
Financial
Services
|
|
Elimi-
nations
|
|
Total
|
(millions of Canadian
dollars except where otherwise indicated)
|
|
|
Revenue
|
|
$
|
14,157
|
$
|
487
|
$
|
(113)
|
$
|
14,531
|
|
|
$
|
13,694
|
$
|
417
|
$
|
(104)
|
$
|
14,007
|
Gross
profit(2)
|
|
$
|
4,409
|
$
|
377
|
$
|
(113)
|
$
|
4,673
|
|
|
$
|
4,188
|
$
|
336
|
$
|
(104)
|
$
|
4,420
|
Gross profit
%(2)
|
|
|
31.1 %
|
|
N/A
|
|
— %
|
|
32.2 %
|
|
|
|
30.6 %
|
|
N/A
|
|
— %
|
|
31.6 %
|
Operating
income
|
|
$
|
843
|
$
|
100
|
$
|
—
|
$
|
943
|
|
|
$
|
810
|
$
|
61
|
$
|
—
|
$
|
871
|
Adjusted operating
income(2)
|
|
|
981
|
|
87
|
|
—
|
|
1,068
|
|
|
|
880
|
|
61
|
|
—
|
|
941
|
Adjusted
EBITDA(2)
|
|
$
|
1,532
|
$
|
101
|
$
|
—
|
$
|
1,633
|
|
|
$
|
1,418
|
$
|
75
|
$
|
—
|
$
|
1,493
|
Adjusted EBITDA
margin(2)
|
|
|
10.8 %
|
|
N/A
|
|
— %
|
|
11.2 %
|
|
|
|
10.4 %
|
|
N/A
|
|
— %
|
|
10.7 %
|
Net interest expense
and other financing charges
|
|
$
|
156
|
$
|
39
|
$
|
—
|
$
|
195
|
|
|
$
|
144
|
$
|
28
|
$
|
—
|
$
|
172
|
Adjusted net interest
expense and other financing charges(2)
|
|
|
156
|
|
39
|
|
—
|
|
195
|
|
|
|
144
|
|
28
|
|
—
|
|
172
|
Earnings before
income taxes
|
|
$
|
687
|
$
|
61
|
$
|
—
|
$
|
748
|
|
|
$
|
666
|
$
|
33
|
$
|
—
|
$
|
699
|
Income taxes
|
|
|
|
|
|
|
|
$
|
188
|
|
|
|
|
|
|
|
|
$
|
181
|
Adjusted income
taxes(2)
|
|
|
|
|
|
|
|
|
224
|
|
|
|
|
|
|
|
|
|
205
|
Net earnings
attributable to non-controlling interests
|
|
|
|
|
|
|
|
$
|
16
|
|
|
|
|
|
|
|
|
$
|
(14)
|
Prescribed dividends on
preferred shares in share capital
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
3
|
Net earnings
available to common shareholders of the Company
|
|
|
|
|
|
|
|
$
|
541
|
|
|
|
|
|
|
|
|
$
|
529
|
Adjusted net earnings
available to common shareholders of the
Company(2)
|
|
|
|
|
|
|
|
|
630
|
|
|
|
|
|
|
|
|
|
575
|
Diluted net earnings
per common share ($)
|
|
|
|
|
|
|
|
$
|
1.72
|
|
|
|
|
|
|
|
|
$
|
1.62
|
Adjusted diluted net
earnings per common share(2) ($)
|
|
|
|
|
|
|
|
$
|
2.00
|
|
|
|
|
|
|
|
|
$
|
1.76
|
Diluted
weighted average common shares outstanding (in
millions)
|
|
|
|
|
|
|
|
|
314.9
|
|
|
|
|
|
|
|
|
|
327.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
|
2022
|
|
|
|
(52
weeks)
|
|
|
|
(52 weeks)
|
For the years ended
December 30, 2023 and December 31, 2022
|
|
|
Retail
|
|
Financial
Services
|
|
Elimin-
ations
|
|
Total
|
|
|
|
Retail
|
|
Financial
Services
|
|
Elimin-
ations
|
|
Total
|
(millions of Canadian
dollars except where otherwise indicated)
|
|
|
Revenue
|
|
$
|
58,345
|
$
|
1,540
|
$
|
(356)
|
$
|
59,529
|
|
|
$
|
55,492
|
$
|
1,338
|
$
|
(326)
|
$
|
56,504
|
Gross
profit(2)
|
|
$
|
18,083
|
$
|
1,310
|
$
|
(356)
|
$
|
19,037
|
|
|
$
|
17,165
|
$
|
1,137
|
$
|
(326)
|
$
|
17,976
|
Gross profit
%(2)
|
|
|
31.0 %
|
|
N/A
|
|
— %
|
|
32.0 %
|
|
|
|
30.9 %
|
|
N/A
|
|
— %
|
|
31.8 %
|
Operating
income
|
|
$
|
3,500
|
$
|
204
|
$
|
—
|
$
|
3,704
|
|
|
$
|
3,260
|
$
|
82
|
$
|
—
|
$
|
3,342
|
Adjusted operating
income(2)
|
|
|
4,012
|
|
228
|
|
—
|
|
4,240
|
|
|
|
3,690
|
|
193
|
|
—
|
|
3,883
|
Adjusted
EBITDA(2)
|
|
$
|
6,361
|
$
|
286
|
$
|
—
|
$
|
6,647
|
|
|
$
|
5,939
|
$
|
242
|
$
|
—
|
$
|
6,181
|
Adjusted EBITDA
margin(2)
|
|
|
10.9 %
|
|
N/A
|
|
— %
|
|
11.2 %
|
|
|
|
10.7 %
|
|
N/A
|
|
— %
|
|
10.9 %
|
Net interest expense
and other financing charges
|
|
$
|
660
|
$
|
143
|
$
|
—
|
$
|
803
|
|
|
$
|
599
|
$
|
84
|
$
|
—
|
$
|
683
|
Adjusted net interest
expense and other financing charges
|
|
|
660
|
|
143
|
|
—
|
|
803
|
|
|
|
610
|
|
84
|
|
—
|
|
694
|
Earnings (Losses)
before income taxes
|
|
$
|
2,840
|
$
|
61
|
$
|
—
|
$
|
2,901
|
|
|
$
|
2,661
|
$
|
(2)
|
$
|
—
|
$
|
2,659
|
Income taxes
|
|
|
|
|
|
|
|
$
|
714
|
|
|
|
|
|
|
|
|
$
|
665
|
Adjusted income
taxes(2)
|
|
|
|
|
|
|
|
|
858
|
|
|
|
|
|
|
|
|
|
841
|
Net earnings
attributable to non-controlling interests
|
|
|
|
|
|
|
|
$
|
87
|
|
|
|
|
|
|
|
|
$
|
73
|
Prescribed dividends
on
preferred shares in
share
capital
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
12
|
Net earnings
available to common shareholders of the Company
|
|
|
|
|
|
|
|
$
|
2,088
|
|
|
|
|
|
|
|
|
$
|
1,909
|
Adjusted net earnings
available to common shareholders of the
Company(2)
|
|
|
|
|
|
|
|
|
2,480
|
|
|
|
|
|
|
|
|
|
2,263
|
Diluted net earnings
per common share ($)
|
|
|
|
|
|
|
|
$
|
6.52
|
|
|
|
|
|
|
|
|
$
|
5.75
|
Adjusted diluted net
earnings per common share(2) ($)
|
|
|
|
|
|
|
|
$
|
7.75
|
|
|
|
|
|
|
|
|
$
|
6.82
|
Diluted weighted
average common shares outstanding (in millions)
|
|
|
|
|
|
|
|
|
320.0
|
|
|
|
|
|
|
|
|
|
331.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table provides a breakdown of the Company's total
and same-store sales for the Retail segment.
For the periods ended
December 30, 2023 and December 31, 2022
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
(millions of Canadian
dollars except where otherwise indicated)
|
|
|
(12
weeks)
|
|
|
(12 weeks)
|
|
|
(52
weeks)
|
|
|
(52 weeks)
|
|
|
|
Sales
|
Same-store
sales
|
|
|
Sales
|
Same-store
sales
|
|
|
Sales
|
Same-store
sales
|
|
|
Sales
|
Same-store
sales
|
Food retail
|
|
$
|
9,774
|
2.0 %
|
|
$
|
9,514
|
8.4 %
|
|
$
|
41,188
|
3.9 %
|
|
$
|
39,398
|
4.7 %
|
Drug retail
|
|
|
4,383
|
4.6 %
|
|
|
4,180
|
8.7 %
|
|
|
17,157
|
5.4 %
|
|
|
16,094
|
6.9 %
|
Pharmacy and
healthcare services
|
|
|
2,099
|
8.0 %
|
|
|
1,941
|
5.4 %
|
|
|
8,642
|
6.8 %
|
|
|
7,944
|
5.7 %
|
Front store
|
|
|
2,284
|
1.7 %
|
|
|
2,239
|
11.5 %
|
|
|
8,515
|
4.2 %
|
|
|
8,150
|
8.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RETAIL SEGMENT
- Retail segment sales in the fourth quarter of 2023 were
$14,157 million, an increase of
$463 million, or 3.4%.
- Food Retail (Loblaw) sales were $9,774
million and same-store sales grew by 2.0% (2022 – 8.4%).
- The Consumer Price Index ("CPI") as measured by The Consumer
Price Index for Food Purchased From Stores was 4.9% (2022 – 11.2%)
which was higher than the Company's internal food inflation;
and
- Food Retail traffic increased and basket size decreased.
- Drug Retail (Shoppers Drug Mart) sales were $4,383 million, and same-store sales grew by 4.6%
(2022 – 8.7%), with pharmacy and healthcare services same-store
sales growth of 8.0% (2022 – 5.4%) and front store same-store sales
growth of 1.7% (2022 – 11.5%).
- On a same-store basis, the number of prescriptions dispensed
increased by 3.4% (2022 – 2.2%) and the average prescription value
increased by 3.4% (2022 – 2.3%).
- Operating income in the fourth quarter of 2023 was $843 million, an increase of $33 million, or 4.1%.
- Gross profit(2) in the fourth quarter of 2023 was
$4,409 million, an increase of
$221 million, or 5.3%. The gross
profit percentage(2) for the fourth quarter of 2023 was
31.1%, which was in line with the full-year gross profit
percentage(2) of 31.0%, and was higher by 50 basis
points compared to the fourth quarter of 2022 (2022 – decreased by
30 basis points). The increase was driven by lapping of
high-intensity prior year promotional activities and the scaling of
the external freight business, partially offset by higher
shrink.
- Adjusted EBITDA(2) in the fourth quarter of 2023 was
$1,532 million, an increase of
$114 million, or 8.0%. The increase
was driven by an increase in gross profit(2), partially
offset by an increase in selling, general and administrative
expenses ("SG&A"). SG&A as a percentage of sales was 20.3%,
an increase of 10 basis points, driven by the year-over-year impact
of labour costs including expenses related to the ratification of
union labour agreements, partially offset by operating leverage
from higher sales.
- Depreciation and amortization in the fourth quarter of 2023 was
$666 million, an increase of
$13 million or 2.0%, primarily driven
by an increase in depreciation of leased assets and information
technology ("IT") assets, accelerated depreciation of $7 million as a result of network optimization,
and an increase in depreciation of fixed assets related to
conversions of retail locations, partially offset by the impact of
prior year accelerated depreciation due to the reassessment of the
estimated useful life of certain IT assets. Included in
depreciation and amortization was the amortization of intangible
assets related to the acquisitions of Shoppers Drug Mart
Corporation ("Shoppers Drug Mart") and Lifemark Health Group
("Lifemark") of $115 million (2022 –
$115 million).
- During the fourth quarter of 2023 and on a full-year basis, the
Company recorded charges of $25
million and $70 million
associated with network optimization, respectively. Included in the
charges was accelerated depreciation of $7
million and $24 million as
described above, and other charges. The Company finalized plans for
2024 that are expected to result in the conversion of
30 Provigo stores to Maxi discount stores in Quebec. Charges associated with store
conversions will be recorded as incurred and are expected to
include equipment, severance, lease related and other costs and
will not be considered an adjusting item.
FINANCIAL SERVICES SEGMENT
- Revenue in the fourth quarter of 2023 was $487 million, an increase of $70 million or 16.8%. The increase was primarily
driven by higher sales attributable to The Mobile Shop™,
higher interest income from growth in credit card receivables, and
higher interchange income and other credit card related revenue
from an increase in customer spending.
- Earnings before income taxes in the fourth quarter of 2023 were
$61 million, an increase of
$28 million or 84.8%. The improvement
was mainly driven by higher revenue as described above, lower
operating costs, including benefits associated with the renewal of
a long-term agreement with Mastercard, and a partial reversal of
certain President's Choice Bank ("PC Bank") commodity tax matters
accrued in the second quarter of 2023. This was partially offset by
higher contractual charge-offs and loyalty program costs from
growth in credit card portfolio, the year-over-year unfavourable
impact of the expected credit loss provision, and higher funding
costs from an increase in interest rates.
STRATEGIC UPDATE AND OUTLOOK(3)
Strategic Update Loblaw's portfolio of businesses
remains strong and well-positioned as economic pressures continue
to drive consumers to its banners, in search for more value. The
Company's best in class assets continue to meet customers' everyday
needs for food, health and wellness – supporting Loblaw's purpose:
helping Canadians Live Life Well®. In an
evolving landscape, the Company will continue to focus on three
strategic pillars in 2024: delivering retail excellence; driving
growth; and investing for the future.
Retail Excellence Loblaw creates value
through disciplined execution of core retail operations and by
leveraging its scale and strategic assets. This retail excellence
is underpinned by process and efficiency initiatives and helps grow
sales, optimize gross margins, and reduce operating costs. The
Company remains focused on strategic procurement opportunities to
deliver reliability, improve product selection and drive economies
of scale across its grocery and pharmacy network. Leveraging its
customer loyalty program and more than one billion customer
transactions across food, pharmacy, apparel, and financial
services, Loblaw will increase its promotional effectiveness while
delivering personalized value and unmatched service to Canadians.
The Company will continue to invest in and refine its retail
network to better meet customer needs and improve its overall
profitability. This includes an increased focus on its Discount
business, where Loblaw has a unique opportunity to bring its
NoFrills and Maxi stores to more communities and neighbourhoods
across the country. Management's clear commitment to food and drug
retail excellence, together with a sense of urgency, is focused on
delivering consistent strong operational and financial
performance.
Driving Growth Loblaw continues to invest in
targeted growth areas to further differentiate its portfolio of
assets and generate competitive advantage. A clear differentiator
and area of focus is Loblaw's ability to digitally engage customers
with a suite of proprietary assets – Loblaw Digital (including PC
Express), Advance, and PC Optimum, Canada's strongest loyalty program. The
Company will focus on enhancing these platforms across each of its
businesses, improving the customer experience and functionality. In
particular, the Company's PC Optimum loyalty program
continues to evolve, with more meaningful personalized offers, and
more effective promotions, all toward strengthening the loyalty
loop and increasing the share of customer wallet.
Investing For The Future Loblaw will
continue to make capital investments towards the modernization and
automation of its supply chain and the expansion of its retail
network. These investments will be partially funded by proceeds
from real estate dispositions. Loblaw will continue to invest in
its Connected Healthcare strategy with the goal of growing its
healthcare ecosystem by connecting patients and providers through
an unmatched network of pharmacies, healthcare professionals and
technology solutions. Pharmacies will play an increasing role in
the delivery of healthcare services to Canadians through expanded
scope of practice changes and the expansion of pharmacist led
clinics.
Outlook(3) Loblaw will execute on retail
excellence while advancing its growth initiatives with the goal of
continuing to deliver consistent operational and financial results
in 2024. The Company's businesses remain well positioned to meet
the everyday needs of Canadians.
For the full-year 2024, the Company expects:
- its Retail business to grow earnings faster than sales;
- adjusted net earnings per common share(2) growth in
the high single-digits;
- to continue investing in our store network and distribution
centres by investing a net amount of $1.8
billion in capital expenditures, which reflects gross
capital investments of approximately $2.2
billion, net of approximately $400
million of proceeds from property disposals; and
- to return capital to shareholders by allocating a significant
portion of free cash flow to share repurchases.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG")
In 2023, Loblaw continued its commitment to fight climate change
and advance social equity. The Company unveiled an ambitious Scope
3 plan and achieved significant success in increasing efforts to
address plastic and food waste. Expanding on its pledge to become
Canada's most inclusive employer,
Loblaw implemented a diverse range of programs, including
accommodations for cultural observances, comprehensive support for
non-birthing parents, and flexible work options, ensuring a
workplace that values diversity and inclusivity. Loblaw also
remained dedicated to supporting the health and well-being of women
and children in communities nationwide through a variety of
initiatives.
The Company collaboratively engaged its National Brand suppliers
to reduce plastic packaging by adopting the Consumer Goods Forum's
Golden Design Rules, and provided added details on its ambitious
plan to achieve net-zero carbon emissions by 2050. This plan
includes a new commitment to engage top vendors to set carbon
targets aligned with the Science Based Targets initiative ("SBTi").
The Company surpassed 60% compliance of its control brand and
in-store plastic packaging as either recyclable or reusable.
To help advance social equity, the Company donated more than 46
million pounds of food to food charities, and marshalled nearly
$180 million in donations to
charitable programs nationwide. The Company achieved all 2023
internal representation goals, and supported President's Choice
Children's Charity to feed more than 990,000 kids, with a clear
path to reach one million kids annually by 2025. The Shoppers
Foundation for Women's Health™ contributed nearly $1 million in 2023 to the Women's Health
Collective Canada who's goal is to bring resources and fundraising
together to raise awareness and address gaps in women's health
research.
In 2023, Loblaw elevated its standards of ESG transparency,
undertaking several initiatives for the first time. In addition to
its longstanding ESG reporting practices, the Company conducted and
disclosed new elements, such as the Carbon Disclosure Project Water
questionnaire. The Company engaged an independent third-party
leading labour and human rights firm, to perform a Human Rights
Impact Assessment related to the production of Broccoli and
Cauliflower in Mexico,
the United States, and
Canada; geographies from which the
Company sources such produce.
To demonstrate our commitment to future alignment with the
International Sustainability Standards Board ("ISSB") and to
provide more timely and relevant information to our stakeholders,
we are pleased to provide an early release of priority 2023
ESG disclosures.
NORMAL COURSE ISSUER BID PROGRAM ("NCIB")
On a full-year basis, the Company repurchased
14.5 million common shares for cancellation at a cost of
$1,729 million.
From time to time, the Company participates in an automatic
share purchase plan ("ASPP") with a broker in order to facilitate
the repurchase of the Company's common shares under its NCIB.
During the effective period of the ASPP, the Company's broker may
purchase common shares at times when the Company would not be
active in the market.
FORWARD-LOOKING STATEMENTS
This News Release contains forward-looking statements about the
Company's objectives, plans, goals, aspirations, strategies,
financial condition, results of operations, cash flows,
performance, prospects, opportunities and legal and regulatory
matters. Specific forward-looking statements in the 2023 News
Release include, but are not limited to, statements with respect to
the Company's anticipated future results, events and plans,
strategic initiatives and restructuring, regulatory changes
including further healthcare reform, future liquidity, planned
capital investments, and the status and impact of IT systems
implementations. These specific forward-looking statements are
contained throughout the 2023 News Release including, without
limitation, in the "Consolidated and Segment Results of Operations"
and "Outlook" section of this News Release. Forward-looking
statements are typically identified by words such as "expect",
"anticipate", "believe", "foresee", "could", "estimate", "goal",
"intend", "plan", "seek", "strive", "will", "may", "should" and
similar expressions, as they relate to the Company and its
management.
Forward-looking statements reflect the Company's estimates,
beliefs and assumptions, which are based on management's perception
of historical trends, current conditions and expected future
developments, as well as other factors it believes are appropriate
in the circumstances. The Company's estimates, beliefs and
assumptions are inherently subject to significant business,
economic, competitive and other uncertainties and contingencies
regarding future events and, as such, are subject to change. The
Company can give no assurance that such estimates, beliefs and
assumptions will prove to be correct.
Numerous risks and uncertainties could cause the Company's
actual results to differ materially from those expressed, implied
or projected in the forward-looking statements, including those
described in the Company's MD&A in the Company's 2023 Annual
Report and Section 4 "Risks" of the Company's 2023 Annual
Information Form for the year ended December
30, 2023.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect the Company's
expectations only as of the date of this News Release. Except as
required by law, the Company does not undertake to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
DECLARATION OF DIVIDENDS
Subsequent to the end of the fourth quarter of 2023, the Board
of Directors declared a quarterly dividend on Common Shares
and Second Preferred Shares, Series B.
Common
Shares
|
$0.446 per common
share, payable on April 1, 2024 to shareholders of record on March
15, 2024.
|
|
|
Second Preferred
Shares, Series B
|
$0.33125 per share,
payable on March 31, 2024 to shareholders of record on March 15,
2024.
|
EXCERPT OF NON-GAAP AND OTHER FINANCIAL MEASURES
The Company uses non-GAAP and other financial measures, as
reconciled and fully described in Appendix 1 "Non-GAAP and Other
Financial Measures" of this News Release.
These measures do not have a standardized meaning prescribed by
International Financial Reporting Standards as issued by the
International Accounting Standards Board ("IFRS Accounting
Standards" or "GAAP"), and therefore they may not be comparable to
similarly titled measures presented by other publicly traded
companies and should not be construed as an alternative to other
financial measures determined in accordance with GAAP.
The following table provides a summary of the differences
between the Company's consolidated GAAP and Non-GAAP and other
financial measures, which are reconciled and fully described in
Appendix 1.
For the periods ended
December 30, 2023 and December 31, 2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
(millions of Canadian
dollars except where otherwise indicated)
|
|
|
(12
weeks)
|
|
|
(12 weeks)
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
Adjusting
Items
|
|
|
Non-
GAAP(2)
|
|
|
GAAP
|
|
|
Adjusting
Items
|
|
|
Non-
GAAP(2)
|
EBITDA
|
|
$
|
1,623
|
|
$
|
10
|
|
$
|
1,633
|
|
$
|
1,538
|
|
$
|
(45)
|
|
$
|
1,493
|
Operating
income
|
|
$
|
943
|
|
$
|
125
|
|
$
|
1,068
|
|
$
|
871
|
|
$
|
70
|
|
$
|
941
|
Net interest expense
and other financing charges
|
|
|
195
|
|
|
—
|
|
|
195
|
|
|
172
|
|
|
—
|
|
|
172
|
Earnings before
income taxes
|
|
$
|
748
|
|
$
|
125
|
|
$
|
873
|
|
$
|
699
|
|
$
|
70
|
|
$
|
769
|
Deduct the
following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
|
188
|
|
|
36
|
|
|
224
|
|
|
181
|
|
|
24
|
|
|
205
|
Non-controlling
interests
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|
(14)
|
|
|
—
|
|
|
(14)
|
Prescribed dividends
on preferred shares
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
3
|
Net earnings
available to common shareholders of the Company(i)
|
|
$
|
541
|
|
$
|
89
|
|
$
|
630
|
|
$
|
529
|
|
$
|
46
|
|
$
|
575
|
Diluted net earnings
per common share ($)
|
|
$
|
1.72
|
|
$
|
0.28
|
|
$
|
2.00
|
|
$
|
1.62
|
|
$
|
0.14
|
|
$
|
1.76
|
Diluted weighted
average common shares (millions)
|
|
|
314.9
|
|
|
—
|
|
|
314.9
|
|
|
327.4
|
|
|
—
|
|
|
327.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended
December 30, 2023 and December 31, 2022
|
|
|
2023
|
|
|
2022
|
(millions of Canadian
dollars except where otherwise indicated)
|
|
|
(52
weeks)
|
|
|
(52 weeks)
|
|
|
|
GAAP
|
|
|
Adjusting
Items
|
|
|
Non-
GAAP(2)
|
|
|
GAAP
|
|
|
Adjusting
Items
|
|
|
Non-
GAAP(2)
|
EBITDA
|
|
$
|
6,610
|
|
$
|
37
|
|
$
|
6,647
|
|
$
|
6,137
|
|
$
|
44
|
|
$
|
6,181
|
Operating
income
|
|
$
|
3,704
|
|
$
|
536
|
|
$
|
4,240
|
|
$
|
3,342
|
|
$
|
541
|
|
$
|
3,883
|
Net interest expense
and other financing charges
|
|
|
803
|
|
|
—
|
|
|
803
|
|
|
683
|
|
|
11
|
|
|
694
|
Earnings before
income taxes
|
|
$
|
2,901
|
|
$
|
536
|
|
$
|
3,437
|
|
$
|
2,659
|
|
$
|
530
|
|
$
|
3,189
|
Deduct the
following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
|
714
|
|
|
144
|
|
|
858
|
|
|
665
|
|
|
176
|
|
|
841
|
Non-controlling
interests
|
|
|
87
|
|
|
—
|
|
|
87
|
|
|
73
|
|
|
—
|
|
|
73
|
Prescribed dividends
on preferred shares
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
12
|
|
|
—
|
|
|
12
|
Net earnings
available to common shareholders of the
Company(i)
|
|
$
|
2,088
|
|
$
|
392
|
|
$
|
2,480
|
|
$
|
1,909
|
|
$
|
354
|
|
$
|
2,263
|
Diluted net earnings
per common share ($)
|
|
$
|
6.52
|
|
$
|
1.23
|
|
$
|
7.75
|
|
$
|
5.75
|
|
$
|
1.07
|
|
$
|
6.82
|
Diluted weighted
average common shares (millions)
|
|
|
320.0
|
|
|
—
|
|
|
320.0
|
|
|
331.7
|
|
|
—
|
|
|
331.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
Net earnings available
to common shareholders of the Company are net earnings attributable
to shareholders of the Company net of dividends declared on the
Company's Second Preferred Shares, Series B.
|
The following table provides a summary of the Company's
adjusting items which are reconciled and fully described in
Appendix 1.
For the periods ended
December 30, 2023 and December 31, 2022
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
(millions of Canadian
dollars)
|
|
|
(12
weeks)
|
|
|
(12 weeks)
|
|
|
(52
weeks)
|
|
|
(52 weeks)
|
Operating
income
|
|
$
|
943
|
|
$
|
871
|
|
$
|
3,704
|
|
$
|
3,342
|
Add (deduct) impact of
the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets acquired with
Shoppers Drug Mart and Lifemark
|
|
$
|
115
|
|
$
|
115
|
|
$
|
499
|
|
$
|
497
|
Fair value adjustment
on fuel and foreign currency
contracts
|
|
|
14
|
|
|
11
|
|
|
16
|
|
|
(5)
|
Fair value adjustment
on non-operating properties
|
|
|
9
|
|
|
(6)
|
|
|
9
|
|
|
(6)
|
Lifemark transaction
costs
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
Gain on sale of
non-operating properties
|
|
|
—
|
|
|
(50)
|
|
|
(12)
|
|
|
(57)
|
Restructuring and
other related recoveries
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15)
|
Charges (recoveries)
related to PC Bank commodity
tax matters
|
|
|
(13)
|
|
|
—
|
|
|
24
|
|
|
111
|
Adjusting
items
|
|
$
|
125
|
|
$
|
70
|
|
$
|
536
|
|
$
|
541
|
Adjusted operating
income(2)
|
|
$
|
1,068
|
|
$
|
941
|
|
$
|
4,240
|
|
$
|
3,883
|
Net interest expense
and other financing charges
|
|
$
|
195
|
|
$
|
172
|
|
$
|
803
|
|
$
|
683
|
Add: Recovery related
to Glenhuron
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
Adjusted net
interest expense and other financing
charge(2)
|
|
$
|
195
|
|
$
|
172
|
|
$
|
803
|
|
$
|
694
|
Income
taxes
|
|
$
|
188
|
|
$
|
181
|
|
$
|
714
|
|
$
|
665
|
Add the impact of the
following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact of items
included in adjusted earnings
before taxes
|
|
$
|
36
|
|
$
|
24
|
|
$
|
144
|
|
$
|
143
|
Recovery related to
Glenhuron
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
Adjusting
items
|
|
$
|
36
|
|
$
|
24
|
|
$
|
144
|
|
$
|
176
|
Adjusted income
taxes(2)
|
|
$
|
224
|
|
$
|
205
|
|
$
|
858
|
|
$
|
841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED FINANCIAL INFORMATION
The following includes selected quarterly and annual financial
information, which is derived from the Company's annual
consolidated financial statements for the year ended December 30, 2023 that were prepared in
accordance with IFRS Accounting Standards. This financial
information does not contain all disclosures required by IFRS
Accounting Standards, and accordingly, should be read in
conjunction with the Company's 2023 Annual Report, which is
available in the Investors section of the Company's website at
loblaw.ca and on sedarplus.ca.
Consolidated Statements of Earnings
|
|
|
December 30,
2023
|
|
|
December 31,
2022
|
|
|
December 30,
2023
|
|
|
December 31,
2022
|
(millions of Canadian
dollars except where
otherwise indicated)
|
|
|
(12
weeks)
|
|
|
(12 weeks)
|
|
|
(52
weeks)
|
|
(52 weeks)
|
Revenue
|
|
$
|
14,531
|
|
$
|
14,007
|
|
$
|
59,529
|
|
$
|
56,504
|
Cost of
sales
|
|
|
9,858
|
|
|
9,587
|
|
|
40,492
|
|
|
38,528
|
Selling, general and
administrative expenses
|
|
|
3,730
|
|
|
3,549
|
|
|
15,333
|
|
|
14,634
|
Operating
income
|
|
$
|
943
|
|
$
|
871
|
|
$
|
3,704
|
|
$
|
3,342
|
Net interest expense
and other financing charges
|
|
|
195
|
|
|
172
|
|
|
803
|
|
|
683
|
Earnings before
income taxes
|
|
$
|
748
|
|
$
|
699
|
|
$
|
2,901
|
|
$
|
2,659
|
Income taxes
|
|
|
188
|
|
|
181
|
|
|
714
|
|
|
665
|
Net
earnings
|
|
$
|
560
|
|
$
|
518
|
|
$
|
2,187
|
|
$
|
1,994
|
Attributable
to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders of the
Company
|
|
$
|
544
|
|
$
|
532
|
|
$
|
2,100
|
|
$
|
1,921
|
Non-controlling
interests
|
|
|
16
|
|
|
(14)
|
|
|
87
|
|
|
73
|
Net
earnings
|
|
$
|
560
|
|
$
|
518
|
|
$
|
2,187
|
|
$
|
1,994
|
Net earnings per
common share ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.73
|
|
$
|
1.63
|
|
$
|
6.59
|
|
$
|
5.82
|
Diluted
|
|
$
|
1.72
|
|
$
|
1.62
|
|
$
|
6.52
|
|
$
|
5.75
|
Weighted average
common shares outstanding (millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
311.7
|
|
|
323.8
|
|
|
316.7
|
|
|
328.1
|
Diluted
|
|
|
314.9
|
|
|
327.4
|
|
|
320.0
|
|
|
331.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheets
|
|
|
As at
|
|
|
As at
|
(millions of Canadian
dollars)
|
|
|
December 30,
2023
|
|
|
December 31,
2022
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,488
|
|
$
|
1,608
|
Short term
investments
|
|
|
464
|
|
|
326
|
Accounts
receivable
|
|
|
1,298
|
|
|
1,199
|
Credit card
receivables
|
|
|
4,132
|
|
|
3,954
|
Inventories
|
|
|
5,820
|
|
|
5,855
|
Prepaid expenses and
other assets
|
|
|
324
|
|
|
353
|
Assets held for
sale
|
|
|
52
|
|
|
81
|
Total current
assets
|
|
$
|
13,578
|
|
$
|
13,376
|
Fixed assets
|
|
|
6,346
|
|
|
5,696
|
Right-of-use
assets
|
|
|
7,662
|
|
|
7,409
|
Investment
properties
|
|
|
53
|
|
|
60
|
Intangible
assets
|
|
|
5,994
|
|
|
6,505
|
Goodwill
|
|
|
4,349
|
|
|
4,323
|
Deferred income tax
assets
|
|
|
125
|
|
|
86
|
Other assets
|
|
|
872
|
|
|
692
|
Total
assets
|
|
$
|
38,979
|
|
$
|
38,147
|
Liabilities
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Bank
indebtedness
|
|
$
|
13
|
|
$
|
8
|
Trade payables and
other liabilities
|
|
|
6,324
|
|
|
6,218
|
Loyalty
liability
|
|
|
123
|
|
|
180
|
Provisions
|
|
|
115
|
|
|
110
|
Income taxes
payable
|
|
|
240
|
|
|
195
|
Demand deposits from
customers
|
|
|
166
|
|
|
125
|
Short term
debt
|
|
|
850
|
|
|
700
|
Long term debt due
within one year
|
|
|
1,191
|
|
|
727
|
Lease liabilities due
within one year
|
|
|
1,455
|
|
|
1,401
|
Associate
interest
|
|
|
370
|
|
|
434
|
Total current
liabilities
|
|
$
|
10,847
|
|
$
|
10,098
|
Provisions
|
|
|
123
|
|
|
109
|
Long term
debt
|
|
|
6,661
|
|
|
7,056
|
Lease
liabilities
|
|
|
8,003
|
|
|
7,714
|
Deferred income tax
liabilities
|
|
|
1,132
|
|
|
1,279
|
Other
liabilities
|
|
|
594
|
|
|
435
|
Total
liabilities
|
|
$
|
27,360
|
|
$
|
26,691
|
Equity
|
|
|
|
|
|
|
Share
capital
|
|
$
|
6,477
|
|
$
|
6,686
|
Retained
earnings
|
|
|
4,816
|
|
|
4,461
|
Contributed
surplus
|
|
|
136
|
|
|
122
|
Accumulated other
comprehensive income
|
|
|
35
|
|
|
30
|
Total equity
attributable to shareholders of the Company
|
|
$
|
11,464
|
|
$
|
11,299
|
Non-controlling
interests
|
|
|
155
|
|
|
157
|
Total
equity
|
|
$
|
11,619
|
|
$
|
11,456
|
Total liabilities
and equity
|
|
$
|
38,979
|
|
$
|
38,147
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows
|
|
|
December 30,
2023
|
|
|
December 31,
2022
|
|
|
December 30,
2023
|
|
|
December 31,
2022
|
(millions of Canadian
dollars) (unaudited)
|
|
|
(12
weeks)
|
|
|
(12 weeks)
|
|
|
(52
weeks)
|
|
|
(52 weeks)
|
Operating
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
560
|
|
$
|
518
|
|
$
|
2,187
|
|
$
|
1,994
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
|
188
|
|
|
181
|
|
|
714
|
|
|
665
|
Net interest expense
and other financing charges
|
|
|
195
|
|
|
172
|
|
|
803
|
|
|
683
|
Adjustments to
investment properties
|
|
|
9
|
|
|
(6)
|
|
|
9
|
|
|
(6)
|
Depreciation and
amortization
|
|
|
680
|
|
|
667
|
|
|
2,906
|
|
|
2,795
|
Asset impairments, net
of recoveries
|
|
|
16
|
|
|
26
|
|
|
17
|
|
|
34
|
Change in allowance
for credit card receivables
|
|
|
25
|
|
|
4
|
|
|
50
|
|
|
1
|
Change in
provisions
|
|
|
7
|
|
|
(34)
|
|
|
19
|
|
|
(6)
|
Change in non-cash
working capital
|
|
|
28
|
|
|
44
|
|
|
(9)
|
|
|
(490)
|
Change in gross credit
card receivables
|
|
|
(211)
|
|
|
(279)
|
|
|
(228)
|
|
|
(512)
|
Income taxes
paid
|
|
|
(143)
|
|
|
(155)
|
|
|
(917)
|
|
|
(439)
|
Interest
received
|
|
|
6
|
|
|
7
|
|
|
24
|
|
|
38
|
Other
|
|
|
45
|
|
|
3
|
|
|
79
|
|
|
(2)
|
Cash flows from
operating activities
|
|
$
|
1,405
|
|
$
|
1,148
|
|
$
|
5,654
|
|
$
|
4,755
|
Investing
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed asset
purchases
|
|
$
|
(548)
|
|
$
|
(540)
|
|
$
|
(1,665)
|
|
$
|
(1,152)
|
Intangible asset
additions
|
|
|
(91)
|
|
|
(111)
|
|
|
(407)
|
|
|
(419)
|
Disposal (purchases) of
short term investments
|
|
|
131
|
|
|
(32)
|
|
|
(138)
|
|
|
138
|
Acquisition of
Lifemark, net of cash acquired
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(813)
|
Decrease in security
deposits
|
|
|
—
|
|
|
250
|
|
|
—
|
|
|
—
|
Proceeds from disposal
of assets
|
|
|
182
|
|
|
52
|
|
|
321
|
|
|
164
|
Lease payments received
from finance leases
|
|
|
2
|
|
|
2
|
|
|
17
|
|
|
15
|
(Purchase) disposal of
long term securities
|
|
|
(31)
|
|
|
(70)
|
|
|
45
|
|
|
(180)
|
Other
|
|
|
25
|
|
|
33
|
|
|
(18)
|
|
|
(121)
|
Cash flows used in
investing activities
|
|
$
|
(330)
|
|
$
|
(416)
|
|
$
|
(1,845)
|
|
$
|
(2,368)
|
Financing
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in
bank indebtedness
|
|
$
|
(9)
|
|
$
|
(8)
|
|
$
|
5
|
|
$
|
(44)
|
Increase in short term
debt
|
|
|
200
|
|
|
100
|
|
|
150
|
|
|
250
|
Increase in demand
deposits from customers
|
|
|
19
|
|
|
16
|
|
|
41
|
|
|
50
|
Long term
debt
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
|
|
|
155
|
|
|
304
|
|
|
833
|
|
|
1,818
|
Repayments
|
|
|
(161)
|
|
|
(297)
|
|
|
(762)
|
|
|
(1,243)
|
Interest
paid
|
|
|
(101)
|
|
|
(85)
|
|
|
(421)
|
|
|
(344)
|
Cash rent paid on lease
liabilities - Interest
|
|
|
(89)
|
|
|
(81)
|
|
|
(370)
|
|
|
(333)
|
Cash rent paid on lease
liabilities - Principal
|
|
|
(170)
|
|
|
(154)
|
|
|
(1,071)
|
|
|
(994)
|
Dividends paid on
common and preferred shares
|
|
|
(142)
|
|
|
(134)
|
|
|
(562)
|
|
|
(529)
|
Common share
capital
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
|
|
|
22
|
|
|
16
|
|
|
61
|
|
|
88
|
Purchased and held in
trust
|
|
|
—
|
|
|
(75)
|
|
|
(72)
|
|
|
(138)
|
Purchased and
cancelled
|
|
|
(494)
|
|
|
(128)
|
|
|
(1,729)
|
|
|
(1,258)
|
Proceeds from financial
liabilities
|
|
|
—
|
|
|
—
|
|
|
115
|
|
|
15
|
Other
|
|
|
(49)
|
|
|
(13)
|
|
|
(150)
|
|
|
(89)
|
Cash flows used in
financing activities
|
|
$
|
(819)
|
|
$
|
(539)
|
|
$
|
(3,932)
|
|
$
|
(2,751)
|
Effect of foreign
currency exchange rate changes on
cash and cash equivalents
|
|
$
|
4
|
|
$
|
1
|
|
$
|
3
|
|
$
|
(4)
|
Increase in cash and
cash equivalents
|
|
$
|
260
|
|
$
|
194
|
|
$
|
(120)
|
|
$
|
(368)
|
Cash and cash
equivalents, beginning of year
|
|
|
1,228
|
|
|
1,414
|
|
|
1,608
|
|
|
1,976
|
Cash and cash
equivalents, end of year
|
|
$
|
1,488
|
|
$
|
1,608
|
|
$
|
1,488
|
|
$
|
1,608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes
to the consolidated financial statements.
|
CORPORATE PROFILE
2023 Annual Report
The Company's 2023 Annual Report is available in the "Investors"
section of the Company's website at loblaw.ca and on
sedarplus.ca.
Modern Slavery Act Report
On or about February 28, 2024, in
compliance with the Fighting Against Forced Labour and Child
Labour in Supply Chains Act (referred to as Canada's "Modern Slavery Act"), the Company,
certain of its subsidiaries, and George Weston Limited will
publicly file their initial joint Modern Slavery Act Report for the
2023 fiscal year. The Modern Slavery Act Report will be available
on the Company's website at loblaw.ca, or under the Company's
SEDAR+ profile at sedarplus.ca. All shareholders may request that
paper copies of the Modern Slavery Act Report be mailed to them at
no cost by submitting an email request to
investor@loblaw.ca.
Additional financial information has been filed electronically
with various securities regulators in Canada through SEDAR+ and with the Office of
the Superintendent of Financial Institutions (OSFI) as the primary
regulator for the Company's subsidiary, President's Choice Bank.
The Company holds an analyst call shortly following the release of
its quarterly results. These calls are archived in the "Investors"
section of the Company's website at loblaw.ca.
Conference Call and Webcast
Loblaw Companies Limited will host a conference call as well as
an audio webcast on February 22, 2024
at 10:00 a.m. (ET).
To access via tele-conference, please dial (416) 764-8688 or
(888) 390-0546. The playback will be made available approximately
two hours after the event at (416) 764-8677 or (888) 390-0541,
access code: 023218#. To access via audio webcast, please go to the
"Investor" section of loblaw.ca. Pre-registration will be
available.
Full details about the conference call and webcast are available
on the Loblaw Companies Limited website at loblaw.ca.
|
News Release
Endnotes
|
|
(1)
|
This News Release
contains forward-looking information. See "Forward-Looking
Statements" section of this News Release and the Company's 2023
Annual Report for a discussion of material factors that could cause
actual results to differ materially from the forecasts and
projections herein and of the material factors and assumptions that
were used when making these statements. This News Release should be
read in conjunction with Loblaw Companies Limited's filings with
securities regulators made from time to time, all of which can be
found at sedarplus.ca and at loblaw.ca.
|
(2)
|
See "Non-GAAP and Other
Financial Measures" section in Appendix 1 of this News Release,
which includes the reconciliation of such non-GAAP and other
financial measures to the most directly comparable GAAP
measures.
|
(3)
|
To be read in
conjunction with the "Forward-Looking Statements" section of this
News Release and the Company's 2023 Annual Report.
|
|
APPENDIX 1: NON-GAAP AND OTHER FINANCIAL MEASURES
The Company uses the following non-GAAP and other financial
measures and ratios: Retail segment gross profit; Retail segment
adjusted gross profit; Retail segment adjusted gross profit
percentage; adjusted earnings before income taxes, net interest
expense and other financing charges and depreciation and
amortization ("adjusted EBITDA"); adjusted EBITDA margin; adjusted
operating income; adjusted net interest expense and other
financing charges; adjusted income taxes; adjusted effective tax
rate; adjusted net earnings available to common shareholders;
adjusted diluted net earnings per common share, free cash flow, and
same-store sales. The Company believes these non-GAAP and other
financial measures and ratios provide useful information to both
management and investors in measuring the financial performance and
financial condition of the Company for the reasons outlined
below.
Management uses these and other non-GAAP and other financial
measures to exclude the impact of certain expenses and income that
must be recognized under GAAP when analyzing underlying
consolidated and segment operating performance, as the excluded
items are not necessarily reflective of the Company's underlying
operating performance and make comparisons of underlying financial
performance between periods difficult. The Company adjusts for
these items if it believes doing so would result in a more
effective analysis of underlying operating performance. The
exclusion of certain items does not imply that they are
non-recurring.
These measures do not have a standardized meaning prescribed by
GAAP and therefore they may not be comparable to similarly titled
measures presented by other publicly traded companies and should
not be construed as an alternative to other financial measures
determined in accordance with GAAP.
Retail Segment Gross Profit, Retail Segment Adjusted Gross
Profit and Retail Segment Adjusted Gross Profit
Percentage The following tables reconcile adjusted gross
profit by segment to gross profit by segment, which is reconciled
to revenue and cost of sales measures as reported in the
consolidated statements of earnings for the periods ended as
indicated. The Company believes that Retail segment gross profit
and Retail segment adjusted gross profit are useful in assessing
the Retail segment's underlying operating performance and in making
decisions regarding the ongoing operations of the
business.
Retail segment adjusted gross profit percentage is calculated as
Retail segment adjusted gross profit divided by Retail segment
revenue.
|
|
|
2023
|
|
|
2022
|
|
|
|
(12
weeks)
|
|
|
(12 weeks)
|
For the periods ended
December 30, 2023 and December 31, 2022
|
|
|
Retail
|
|
|
Financial
Services
|
|
|
Elimi-
nations
|
|
|
Total
|
|
|
Retail
|
|
|
Financial
Services
|
|
|
Elimi-
nations
|
|
|
Total
|
(millions of Canadian
dollars)
|
|
Revenue
|
|
$
|
14,157
|
|
$
|
487
|
|
$
|
(113)
|
|
$
|
14,531
|
|
$
|
13,694
|
|
$
|
417
|
|
$
|
(104)
|
|
$
|
14,007
|
Cost of
sales
|
|
|
9,748
|
|
|
110
|
|
|
—
|
|
|
9,858
|
|
|
9,506
|
|
|
81
|
|
|
—
|
|
|
9,587
|
Gross profit
|
|
$
|
4,409
|
|
$
|
377
|
|
$
|
(113)
|
|
$
|
4,673
|
|
$
|
4,188
|
|
$
|
336
|
|
$
|
(104)
|
|
$
|
4,420
|
Adjusted gross
profit
|
|
$
|
4,409
|
|
$
|
377
|
|
$
|
(113)
|
|
$
|
4,673
|
|
$
|
4,188
|
|
$
|
336
|
|
$
|
(104)
|
|
$
|
4,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
2022
|
|
|
|
(52
weeks)
|
|
|
(52 weeks)
|
For the years ended
December 30, 2023 and December 31, 2022
|
|
|
Retail
|
|
|
Financial
Services
|
|
|
Elimi-
nations
|
|
|
Total
|
|
|
Retail
|
|
|
Financial
Services
|
|
|
Elimi-
nations
|
|
|
Total
|
(millions of Canadian
dollars)
|
|
|
Revenue
|
|
$
|
58,345
|
|
$
|
1,540
|
|
$
|
(356)
|
|
$
|
59,529
|
|
$
|
55,492
|
|
$
|
1,338
|
|
$
|
(326)
|
|
$
|
56,504
|
Cost of
sales
|
|
|
40,262
|
|
|
230
|
|
|
—
|
|
|
40,492
|
|
|
38,327
|
|
|
201
|
|
|
—
|
|
|
38,528
|
Gross profit
|
|
$
|
18,083
|
|
$
|
1,310
|
|
$
|
(356)
|
|
$
|
19,037
|
|
$
|
17,165
|
|
$
|
1,137
|
|
$
|
(326)
|
|
$
|
17,976
|
Adjusted gross
profit
|
|
$
|
18,083
|
|
$
|
1,310
|
|
$
|
(356)
|
|
$
|
19,037
|
|
$
|
17,165
|
|
$
|
1,137
|
|
$
|
(326)
|
|
$
|
17,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income, Adjusted EBITDA and Adjusted
EBITDA Margin The following tables reconcile adjusted
operating income and adjusted EBITDA to operating income, which is
reconciled to net earnings attributable to shareholders of the
Company as reported in the consolidated statements of earnings for
the periods ended as indicated. The Company believes that adjusted
EBITDA is useful in assessing the performance of its ongoing
operations and its ability to generate cash flows to fund its cash
requirements, including the Company's capital investment
program.
Adjusted EBITDA margin is calculated as adjusted EBITDA divided
by revenue.
|
|
2023
|
|
|
2022
|
|
|
(12
weeks)
|
|
|
(12 weeks)
|
For the periods ended
December 30, 2023 and December 31, 2022
|
|
Retail
|
|
|
Financial
Services
|
|
|
Total
|
|
|
Retail
|
|
|
Financial
Services
|
|
|
Total
|
(millions of Canadian
dollars)
|
|
|
|
Net earnings
attributable to shareholders of the Company
|
|
|
|
|
|
|
$
|
544
|
|
|
|
|
|
|
|
$
|
532
|
Add impact of the
following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
(14)
|
Net interest expense
and other financing charges
|
|
|
|
|
|
|
|
195
|
|
|
|
|
|
|
|
|
172
|
Income
taxes
|
|
|
|
|
|
|
|
188
|
|
|
|
|
|
|
|
|
181
|
Operating
income
|
$
|
843
|
|
$
|
100
|
|
$
|
943
|
|
$
|
810
|
|
$
|
61
|
|
$
|
871
|
Add (deduct) impact of
the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets acquired with Shoppers Drug Mart and
Lifemark
|
$
|
115
|
|
$
|
—
|
|
$
|
115
|
|
$
|
115
|
|
$
|
—
|
|
$
|
115
|
Fair value adjustment
on fuel and foreign currency contracts
|
|
14
|
|
|
—
|
|
|
14
|
|
|
11
|
|
|
—
|
|
|
11
|
Fair value adjustment
on non-operating properties
|
|
9
|
|
|
—
|
|
|
9
|
|
|
(6)
|
|
|
—
|
|
|
(6)
|
Gain on sale of
non-operating properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50)
|
|
|
—
|
|
|
(50)
|
Recoveries related to
PC Bank commodity tax matters
|
|
—
|
|
|
(13)
|
|
|
(13)
|
|
|
—
|
|
|
—
|
|
|
—
|
Adjusting
items
|
$
|
138
|
|
$
|
(13)
|
|
$
|
125
|
|
$
|
70
|
|
$
|
—
|
|
$
|
70
|
Adjusted operating
income
|
$
|
981
|
|
$
|
87
|
|
$
|
1,068
|
|
$
|
880
|
|
$
|
61
|
|
$
|
941
|
Depreciation and
amortization
|
|
666
|
|
|
14
|
|
|
680
|
|
|
653
|
|
|
14
|
|
|
667
|
Less: Amortization of
intangible assets acquired with Shoppers Drug Mart and
Lifemark
|
|
(115)
|
|
|
—
|
|
|
(115)
|
|
|
(115)
|
|
|
—
|
|
|
(115)
|
Adjusted
EBITDA
|
$
|
1,532
|
|
$
|
101
|
|
$
|
1,633
|
|
$
|
1,418
|
|
$
|
75
|
|
$
|
1,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
|
|
|
2022
|
|
|
(52
weeks)
|
|
|
(52 weeks)
|
For the years ended
December 30, 2023 and December 31, 2022
|
|
Retail
|
|
|
Financial
Services
|
|
|
Total
|
|
|
Retail
|
|
|
Financial
Services
|
|
|
Total
|
(millions of Canadian
dollars)
|
|
|
|
Net earnings
attributable to shareholders of the Company
|
|
|
|
|
|
|
$
|
2,100
|
|
|
|
|
|
|
|
$
|
1,921
|
Add impact of the
following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
|
|
|
|
|
87
|
|
|
|
|
|
|
|
|
73
|
Net interest expense
and other financing charges
|
|
|
|
|
|
|
|
803
|
|
|
|
|
|
|
|
|
683
|
Income
taxes
|
|
|
|
|
|
|
|
714
|
|
|
|
|
|
|
|
|
665
|
Operating
income
|
$
|
3,500
|
|
$
|
204
|
|
$
|
3,704
|
|
$
|
3,260
|
|
$
|
82
|
|
$
|
3,342
|
Add (deduct) impact of
the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets acquired with Shoppers Drug Mart and
Lifemark
|
$
|
499
|
|
$
|
—
|
|
$
|
499
|
|
$
|
497
|
|
$
|
—
|
|
$
|
497
|
Charges related to PC
Bank commodity tax matters
|
|
—
|
|
|
24
|
|
|
24
|
|
|
—
|
|
|
111
|
|
|
111
|
Fair value adjustment
on fuel and foreign currency contracts
|
|
16
|
|
|
—
|
|
|
16
|
|
|
(5)
|
|
|
—
|
|
|
(5)
|
Fair value adjustment
on non-operating properties
|
|
9
|
|
|
—
|
|
|
9
|
|
|
(6)
|
|
|
—
|
|
|
(6)
|
Lifemark transaction
costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
Restructuring and
other related recoveries
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15)
|
|
|
—
|
|
|
(15)
|
Gain on sale of
non-operating properties
|
|
(12)
|
|
|
—
|
|
|
(12)
|
|
|
(57)
|
|
|
—
|
|
|
(57)
|
Adjusting
items
|
$
|
512
|
|
$
|
24
|
|
$
|
536
|
|
$
|
430
|
|
$
|
111
|
|
$
|
541
|
Adjusted operating
income
|
$
|
4,012
|
|
$
|
228
|
|
$
|
4,240
|
|
$
|
3,690
|
|
$
|
193
|
|
$
|
3,883
|
Depreciation and
amortization
|
|
2,848
|
|
|
58
|
|
|
2,906
|
|
|
2,746
|
|
|
49
|
|
|
2,795
|
Less: Amortization of
intangible assets acquired with Shoppers Drug Mart and
Lifemark
|
|
(499)
|
|
|
—
|
|
|
(499)
|
|
|
(497)
|
|
|
—
|
|
|
(497)
|
Adjusted
EBITDA
|
$
|
6,361
|
|
$
|
286
|
|
$
|
6,647
|
|
$
|
5,939
|
|
$
|
242
|
|
$
|
6,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In addition to the items described in the Retail segment
adjusted gross profit section above, when applicable, adjusted
EBITDA was impacted by the following:
Amortization of intangible assets acquired with
Shoppers Drug Mart and Lifemark The
acquisition of Shoppers Drug Mart in 2014 included approximately
$6,050 million of definite life
intangible assets, which are being amortized over their estimated
useful lives. Annual amortization associated with the acquired
intangibles will be approximately $500 million until 2024 and
will decrease thereafter.
The acquisition of Lifemark in 2022 included approximately
$299 million of definite life
intangible assets, which are being amortized over their estimated
useful lives.
Charges (recoveries) related to President's Choice Bank
commodity tax matters In the second quarter of 2023, the
Federal government enacted certain commodity tax legislation that
applies to PC Bank on a retroactive basis. A charge of $37 million, inclusive of interest, was recorded
for this matter. In the fourth quarter of 2023, the Company
reversed $13 million of previously
recorded charges. The reversal was a result of new guidance issued
by the Canada Revenue Agency.
In the second quarter of 2022, the Company recorded a charge of
$111 million, inclusive of interest.
In July 2022, the Tax Court released
its decision and ruled that PC Bank is not entitled to claim
notional input tax credits for certain payments it made to Loblaws
Inc. in respect of redemptions of loyalty points. In September 2022, PC Bank filed a Notice of Appeal
with the Federal Court of Appeal. Subsequent to December 30, 2023, the Federal Court of Appeal
scheduled the hearing of the appeal for March 6, 2024.
Fair value adjustment on fuel and foreign currency
contracts The Company is exposed to commodity price
and U.S. dollar exchange rate fluctuations. In accordance with the
Company's commodity risk management policy, the Company enters into
exchange traded futures contracts and forward contracts to minimize
cost volatility relating to fuel prices and the U.S. dollar
exchange rate. These derivatives are not acquired for trading or
speculative purposes. Pursuant to the Company's derivative
instruments accounting policy, changes in the fair value of these
instruments, which include realized and unrealized gains and
losses, are recorded in operating income. Despite the impact of
accounting for these commodity and foreign currency derivatives on
the Company's reported results, the derivatives have the economic
impact of largely mitigating the associated risks arising from
price and exchange rate fluctuations in the underlying commodities
and U.S. dollar commitments.
Fair value adjustment on non-operating
properties The Company measures non-operating
properties, which are investment properties and assets held for
sale that were transferred from investment properties, at fair
value. Under the fair value model, non-operating properties are
initially measured at cost and subsequently measured at fair value.
Fair value using the income approach include assumptions as to
market rental rates for properties of similar size and condition
located within the same geographical areas, recoverable operating
costs for leases with tenants, non-recoverable operating costs,
vacancy periods, tenant inducements and terminal capitalization
rates. Gains and losses arising from changes in the fair value are
recognized in operating income in the period in which they
arise.
Lifemark transaction costs In connection with
the acquisition of Lifemark during 2022, the Company recorded
acquisition costs of $16 million in operating income.
Restructuring and other related
recoveries The Company continuously evaluates
strategic and cost reduction initiatives related to its store
infrastructure, distribution networks and administrative
infrastructure with the objective of ensuring a low cost operating
structure. Only restructuring activities that are publicly
announced related to these initiatives are considered adjusting
items.
In the fourth quarter of 2023 and year-to-date, the Company
did not record any restructuring and other related recoveries or
charges. In 2022, the Company recorded restructuring and other
related recoveries of $15 million.
The recoveries recognized in 2022 were mainly in connection to the
previously announced closure of two distribution centres in
Laval and Ottawa. The Company invested to build a modern
and efficient expansion to its Cornwall distribution centre to serve its food
and drug retail businesses in Ontario and Quebec and volumes have been transferred.
Gain on sale of non-operating properties In the
fourth quarter of 2023, the Company did not record any gain or loss
related to the sale of non-operating properties (2022 –
$50 million). In 2023, the Company
recorded a gain related to the sale of non-operating properties of
$12 million (2022 – $57 million).
Adjusted Net Interest Expense and Other Financing
Charges The following table reconciles adjusted net
interest expense and other financing charges to net interest
expense and other financing charges as reported in the consolidated
statements of earnings for the periods ended as indicated. The
Company believes that adjusted net interest expense and other
financing charges is useful in assessing the Company's underlying
financial performance and in making decisions regarding the
financial operations of the business.
For the periods ended
December 30, 2023 and December 31, 2022
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
(millions of Canadian
dollars)
|
|
|
(12
weeks)
|
|
|
(12 weeks)
|
|
|
(52
weeks)
|
|
|
(52 weeks)
|
Net interest expense
and other financing charges
|
|
$
|
195
|
|
$
|
172
|
|
$
|
803
|
|
$
|
683
|
Add: Recovery related
to Glenhuron
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
Adjusted net interest
expense and other financing charges
|
|
$
|
195
|
|
$
|
172
|
|
$
|
803
|
|
$
|
694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery related to Glenhuron Bank Limited
("Glenhuron") In 2021, the Supreme Court of Canada ruled in favour of the Company on the
Glenhuron matter. As a result of related reassessments received
during the first quarter of 2022, the Company reversed $35 million of previously recorded charges, of
which $2 million was recorded as
interest income and $33 million was
recorded as an income tax recovery, and an additional $9 million, before taxes, was recorded in respect
of interest income earned on expected cash tax refunds.
Adjusted Income Taxes and Adjusted Effective Tax
Rate The following table reconciles adjusted income taxes
to income taxes as reported in the consolidated statements of
earnings for the periods ended as indicated. The Company believes
that adjusted income taxes is useful in assessing the Company's
underlying operating performance and in making decisions regarding
the ongoing operations of its business.
Adjusted effective tax rate is calculated as adjusted income
taxes divided by the sum of adjusted operating income less adjusted
net interest expense and other financing charges.
For the periods ended
December 30, 2023 and December 31, 2022
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
(millions of Canadian
dollars except where otherwise indicated)
|
|
|
(12
weeks)
|
|
|
(12 weeks)
|
|
|
(52
weeks)
|
|
|
(52 weeks)
|
Adjusted operating
income(i)
|
|
$
|
1,068
|
|
$
|
941
|
|
$
|
4,240
|
|
$
|
3,883
|
Adjusted net interest
expense and other financing charges(i)
|
|
|
195
|
|
|
172
|
|
|
803
|
|
|
694
|
Adjusted earnings
before taxes
|
|
$
|
873
|
|
$
|
769
|
|
$
|
3,437
|
|
$
|
3,189
|
Income taxes
|
|
$
|
188
|
|
$
|
181
|
|
$
|
714
|
|
$
|
665
|
Add impact of the
following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact of items
included in adjusted earnings before
taxes(ii)
|
|
|
36
|
|
|
24
|
|
|
144
|
|
|
143
|
Recovery related to
Glenhuron
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
Adjusted income
taxes
|
|
$
|
224
|
|
$
|
205
|
|
$
|
858
|
|
$
|
841
|
Effective tax
rate
|
|
|
25.1 %
|
|
|
25.9 %
|
|
|
24.6 %
|
|
|
25.0 %
|
Adjusted effective tax
rate
|
|
|
25.7 %
|
|
|
26.7 %
|
|
|
25.0 %
|
|
|
26.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
See reconciliations of
adjusted operating income and adjusted net interest expense and
other financing charges in the tables above.
|
(ii)
|
See the adjusted
operating income, adjusted EBITDA and adjusted EBITDA margin table
and the adjusted net interest expense and other financing charges
table above for a complete list of items included in adjusted
earnings before taxes.
|
Adjusted Net Earnings Available to Common
Shareholders and Adjusted Diluted Net Earnings Per Common
Share The following table reconciles adjusted net earnings
available to common shareholders of the Company and adjusted net
earnings attributable to shareholders of the Company to net
earnings attributable to shareholders of the Company and then to
net earnings available to common shareholders of the Company for
the periods ended as indicated. The Company believes that adjusted
net earnings available to common shareholders and adjusted diluted
net earnings per common share are useful in assessing the Company's
underlying operating performance and in making decisions regarding
the ongoing operations of its business.
For the periods ended
December 30, 2023 and December 31, 2022
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
(millions of Canadian
dollars except where otherwise indicated)
|
|
|
(12
weeks)
|
|
|
(12 weeks)
|
|
|
(52
weeks)
|
|
|
(52 weeks)
|
Net earnings
attributable to shareholders of the Company
|
|
$
|
544
|
|
$
|
532
|
|
$
|
2,100
|
|
$
|
1,921
|
Prescribed dividends on
preferred shares in share capital
|
|
|
(3)
|
|
|
(3)
|
|
|
(12)
|
|
|
(12)
|
Net earnings available
to common shareholders of the Company
|
|
$
|
541
|
|
$
|
529
|
|
$
|
2,088
|
|
$
|
1,909
|
Net earnings
attributable to shareholders of the Company
|
|
$
|
544
|
|
$
|
532
|
|
$
|
2,100
|
|
$
|
1,921
|
Adjusting items (refer
to the following table)
|
|
|
89
|
|
|
46
|
|
|
392
|
|
|
354
|
Adjusted net earnings
attributable to shareholders of the Company
|
|
$
|
633
|
|
$
|
578
|
|
$
|
2,492
|
|
$
|
2,275
|
Prescribed dividends on
preferred shares in share capital
|
|
|
(3)
|
|
|
(3)
|
|
|
(12)
|
|
|
(12)
|
Adjusted net earnings
available to common shareholders of the Company
|
|
$
|
630
|
|
$
|
575
|
|
$
|
2,480
|
|
$
|
2,263
|
Diluted weighted
average common shares outstanding (millions)
|
|
|
314.9
|
|
|
327.4
|
|
|
320.0
|
|
|
331.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles adjusted net earnings available
to common shareholders of the Company and adjusted diluted net
earnings per common share to net earnings available to common
shareholders of the Company and diluted net earnings per common
share for the periods ended as indicated.
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
(12
weeks)
|
|
|
(12 weeks)
|
|
|
(52
weeks)
|
|
|
(52 weeks)
|
For the periods ended
December 30, 2023 and December 31, 2022
(millions
of Canadian dollars)
|
|
|
Net Earnings
Available to
Common
Shareholders
of the
Company
|
|
|
Diluted
Net
Earnings
Per
Common
Share
|
|
|
Net Earnings
Available to
Common
Shareholders
of the
Company
|
|
|
Diluted
Net
Earnings
Per
Common
Share
|
|
|
Net Earnings
Available to
Common
Shareholders
of the
Company
|
|
|
Diluted
Net
Earnings
Per
Common
Share
|
|
|
Net Earnings
Available to
Common
Shareholders
of the
Company
|
|
|
Diluted
Net
Earnings
Per
Common
Share
|
|
|
|
|
|
|
|
|
As
reported
|
|
$
|
541
|
|
$
|
1.72
|
|
$
|
529
|
|
$
|
1.62
|
|
$
|
2,088
|
|
$
|
6.52
|
|
$
|
1,909
|
|
$
|
5.75
|
Add (deduct) impact of
the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets acquired with Shoppers Drug Mart and
Lifemark
|
|
$
|
85
|
|
$
|
0.27
|
|
$
|
83
|
|
$
|
0.25
|
|
$
|
367
|
|
$
|
1.15
|
|
$
|
365
|
|
$
|
1.11
|
Fair value adjustment
on fuel and foreign currency contracts
|
|
|
10
|
|
|
0.03
|
|
|
8
|
|
|
0.03
|
|
|
12
|
|
|
0.04
|
|
|
(4)
|
|
|
(0.01)
|
Fair value adjustment
on non-operating properties
|
|
|
6
|
|
|
0.02
|
|
|
(4)
|
|
|
(0.01)
|
|
|
6
|
|
|
0.02
|
|
|
(4)
|
|
|
(0.01)
|
Gain on sale of
non-operating properties
|
|
|
—
|
|
|
—
|
|
|
(41)
|
|
|
(0.13)
|
|
|
(10)
|
|
|
(0.03)
|
|
|
(45)
|
|
|
(0.14)
|
Lifemark transaction
costs
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
0.04
|
Restructuring and other
related recoveries
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14)
|
|
|
(0.04)
|
Recovery related to
Glenhuron
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42)
|
|
|
(0.13)
|
Charges (recoveries)
related to PC Bank commodity tax matters
|
|
|
(12)
|
|
|
(0.04)
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
0.05
|
|
|
86
|
|
|
0.25
|
Adjusting
items
|
|
$
|
89
|
|
$
|
0.28
|
|
$
|
46
|
|
$
|
0.14
|
|
$
|
392
|
|
$
|
1.23
|
|
$
|
354
|
|
$
|
1.07
|
Adjusted
|
|
$
|
630
|
|
$
|
2.00
|
|
$
|
575
|
|
$
|
1.76
|
|
$
|
2,480
|
|
$
|
7.75
|
|
$
|
2,263
|
|
$
|
6.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow The following table reconciles, by
reportable operating segments, free cash flow to cash flows from
operating activities. The Company believes that free cash flow is
the appropriate measure in assessing the Company's cash available
for additional financing and investing activities.
|
|
|
2023
|
|
|
2022
|
|
|
|
(12
weeks)
|
|
|
(12 weeks)
|
For the periods ended
December 30, 2023 and December 31, 2022
|
|
|
Retail
|
|
|
Financial
Services
|
|
|
Elimi-
nations(i)
|
|
|
Total
|
|
|
Retail
|
|
|
Financial
Services
|
|
|
Elimi-
nations(i)
|
|
|
Total
|
(millions of Canadian
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used
in) operating activities
|
|
$
|
1,495
|
|
$
|
(131)
|
|
$
|
41
|
|
$
|
1,405
|
|
$
|
1,347
|
|
$
|
(218)
|
|
$
|
19
|
|
$
|
1,148
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
investments(ii)
|
|
|
666
|
|
|
10
|
|
|
—
|
|
|
676
|
|
|
640
|
|
|
11
|
|
|
—
|
|
|
651
|
Interest
paid(i)
|
|
|
60
|
|
|
—
|
|
|
41
|
|
|
101
|
|
|
66
|
|
|
—
|
|
|
19
|
|
|
85
|
Lease payments,
net
|
|
|
257
|
|
|
—
|
|
|
—
|
|
|
257
|
|
|
233
|
|
|
—
|
|
|
—
|
|
|
233
|
Free cash
flow
|
|
$
|
512
|
|
$
|
(141)
|
|
$
|
—
|
|
$
|
371
|
|
$
|
408
|
|
$
|
(229)
|
|
$
|
—
|
|
$
|
179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
2022
|
|
|
|
(52
weeks)
|
|
|
(52 weeks)
|
For the years ended
December 30, 2023 and December 31, 2022
|
|
|
Retail
|
|
|
Financial
Services
|
|
|
Elimi-
nations(i)
|
|
|
Total
|
|
|
Retail
|
|
|
Financial
Services
|
|
|
Elimi-
nations(i)
|
|
|
Total
|
(millions of Canadian
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from (used
in) operating activities
|
|
$
|
5,480
|
|
$
|
46
|
|
$
|
128
|
|
$
|
5,654
|
|
$
|
5,133
|
|
$
|
(444)
|
|
$
|
66
|
|
$
|
4,755
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
investments(ii)
|
|
|
2,069
|
|
|
40
|
|
|
—
|
|
|
2,109
|
|
|
1,538
|
|
|
33
|
|
|
—
|
|
|
1,571
|
Interest
paid(i)
|
|
|
293
|
|
|
—
|
|
|
128
|
|
|
421
|
|
|
278
|
|
|
—
|
|
|
66
|
|
|
344
|
Lease payments,
net
|
|
|
1,424
|
|
|
—
|
|
|
—
|
|
|
1,424
|
|
|
1,312
|
|
|
—
|
|
|
—
|
|
|
1,312
|
Free cash
flow
|
|
$
|
1,694
|
|
$
|
6
|
|
$
|
—
|
|
$
|
1,700
|
|
$
|
2,005
|
|
$
|
(477)
|
|
$
|
—
|
|
$
|
1,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
Interest paid is
included in cash flows from operating activities under the
Financial Services segment.
|
(ii)
|
Capital investments are
the sum of fixed asset purchases and intangible asset additions as
presented in the Company's consolidated statements of cash flows,
and prepayments transferred to fixed assets in the current year.
Capital investments in the fourth quarter of 2023 and for the year
ended December 30, 2023 include $37 million of prepayments
transferred to fixed assets.
|
Same-Store Sales Same-store sales are retail segment
sales for stores in operation in both comparable periods, including
relocated, converted, expanded, contracted or renovated
stores. The Company believes this metric is useful in
assessing sales trends excluding the effect of the opening and
closure of stores.
SOURCE Loblaw Companies Limited