Loblaw misses revenue estimates on soft household products demand

(Reuters) -Canadian retailer Loblaw Companies missed market expectations for second-quarter revenue on Thursday, hurt by soft demand for some household items and non-essential products such as apparel.

The decline in front-store same-store sales was primarily driven by lower demand for food and household items and the decision to exit certain low-margin electronics categories, it said.

Customers in Canada have been trimming expenses even on essential items as high housing and interest rates continue to eat into their income.

The country's retail sales fell in May mainly due to weakness at supermarkets and grocery retailers, according to Statistics Canada.

But many deal-hunting consumers have helped boost food sales growth at Loblaw's discount banners such as No Frills and Maxi.

The company's revenue rose 1.5% to C$13.95 billion ($10.08 billion) but fell short of analysts' average estimate of C$14.17 billion, according to LSEG data.

Separately, Loblaw and its parent company George Weston said on Thursday they had entered into a settlement to resolve lawsuits against them relating to their role in an industry-wide price-fixing arrangement between 2001 and 2015 that involved certain packaged bread products.

George Weston will pay $247.5 million in cash and Loblaw will pay $252.5 million.

This resulted in Loblaw's net income decreasing to C$457 million, or C$1.48 per share, in the second quarter, from C$508 million, or $1.58 per share, a year earlier.

($1 = 1.3840 Canadian dollars)

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shilpi Majumdar and Devika Syamnath)