• Revenue: Increased by 1.5% to $18.5 billion.

• Adjusted EBITDA: Grew by 7.4% to $2.1 billion.

• Adjusted Diluted Net Earnings Per Share: Increased by 10.6% to $2.50.

• Net Earnings (GAAP): Increased by 25% due to a $125 million recovery related to a PC bank commodity tax matter.

• Same-Store Sales Growth (Food Retail): Grew 1.3% excluding the Thanksgiving timing impact.

• Same-Store Sales Growth (Drug Retail): Increased by 29%.

• Pharmacy and Healthcare Services Same-Store Sales Growth: Increased by 6.3%.

• Retail Gross Margin: 30.9%, an increase of 30 basis points.

• Retail EBITDA Margin: 10.9%.

• Retail Free Cash Flow: $562 million.

• Common Shares Repurchased: $523 million worth.

• Return on Equity: 23.3%.

• Return on Capital: 11.8%.

• Store Openings: 50 new stores expected for the full year 2024, with 42 additional store conversions.

• Online Sales Growth: Increased by 18.5%.

• Capital Expenditures: Expected to be approximately $2.3 billion gross or $1.9 billion net of property disposal proceeds.

• Warning! GuruFocus has detected 7 Warning Signs with NTWK.

Release Date: November 13, 2024

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Positive Points

• Loblaw Companies Ltd (LBLCF) reported a revenue growth of 1.5% to $18.5 billion and an adjusted EBITDA increase of 7.4%.

• Adjusted diluted net earnings per share grew by 10.6% to $2.50, with GAAP net earnings increasing by 25% due to a $125 million recovery related to a PC bank commodity tax matter.

• The company opened 29 new Maxi and NoFrills stores in the quarter, with plans to open 20 more in Q4, contributing to a strong expansion strategy.

• Online sales saw the highest growth rate in 2.5 years, increasing by 18.5%, with grocery delivery outperforming as a channel.

• Loblaw Companies Ltd (LBLCF) achieved significant improvements in shrink management, contributing to a 30 basis point increase in total retail gross margin to 30.9%.

Negative Points

• Both consolidated revenue and same-store sales were negatively impacted by the shift in Thanksgiving, which occurred in Q4 this year versus Q3 last year.

• The weaker Canadian dollar is affecting inflation, particularly in fresh categories, leading to higher than normal price increases from global vendors.

• The decision to exit low-margin electronics categories, including laptops, computers, TVs, and cameras, is expected to impact front store sales by 1% in 2024.

• Front store same-store sales in drug retail declined by 0.5% year over year, with additional pressure expected from exiting game consoles and games.

• Despite improvements, shrink management in the drug retail sector is not progressing at the same pace as in food retail, indicating ongoing challenges.