Loblaw Announces Fourth Quarter and Full-Year 2024 Financial Results
Loblaw Companies Limited has released its unaudited financial results for the fourth quarter ending December 28, 2024. The Company has also published its 2024 Annual Report, which includes the audited financial statements and Management’s Discussion and Analysis (“MD&A”) for the fiscal year.
Fourth Quarter 2024 Overview
Loblaw continued its commitment to retail excellence, maintaining strong operational and financial performance. Customers demonstrated a preference for quality, value, service, and convenience, contributing to the company’s sustained market share growth in Food Retail. The PC OptimumTM loyalty program played a key role in driving customer engagement, supported by targeted promotions and competitive pricing. The Drug Retail segment, particularly Pharmacy and Healthcare Services, showed robust performance, with strong sales in beauty categories. However, this was partially offset by Loblaw’s exit from selling certain electronic items.
In 2024, Loblaw expanded its retail footprint by opening 52 new Food and Drug stores and 78 pharmacy care clinics. Looking ahead, the Company aims to open approximately 80 new retail stores and 100 additional clinics in 2025. A notable milestone in the fourth quarter was the launch of the first T&T® Supermarket in the United States, marking Loblaw’s international expansion.
President and CEO Per Bank expressed satisfaction with the Company’s continued operational and financial success, emphasizing Loblaw’s focus on strategic execution and its commitment to providing value to customers. He credited the dedication and contributions of Loblaw employees as a key driver of the Company’s achievements.
Fourth Quarter Financial Highlights
- Total Revenue: $14,948 million, a 2.9% increase from the previous year.
- Retail Sales: $14,579 million, reflecting a 3.0% increase.
- Food Retail Same-Store Sales: Increased by 2.5%, compared to 2.0% in the prior year.
- Drug Retail Same-Store Sales: Increased by 1.3%, with pharmacy and healthcare services seeing 6.3% growth, while front-store sales declined by 3.1%.
- E-commerce Sales: Increased by 18.4%.
- Operating Income: $852 million, a decrease of 9.7%.
- Adjusted EBITDA: $1,698 million, marking a 4.0% increase.
- Retail Segment Gross Profit Margin: 30.9%, slightly lower by 20 basis points.
- Net Earnings Available to Common Shareholders: $462 million, down 14.6%.
- Diluted Net Earnings Per Common Share: $1.52, a decline of 11.6%.
- Adjusted Net Earnings Per Common Share: $2.20, reflecting a 10.0% increase.
- Net Capital Investments: $585 million, with gross investments of $628 million offset by $43 million in property sales.
- Share Repurchases: 1.95 million shares repurchased at a cost of $352 million.
- Retail Free Cash Flow: $828 million.
Fiscal Year 2024 Highlights
- Total Revenue: $61,014 million, reflecting a 2.5% increase.
- Food Retail Same-Store Sales Growth: 1.5%.
- Drug Retail Same-Store Sales Growth: 2.4%.
- E-commerce Sales: $3.9 billion, a 16.9% increase.
- Net Earnings Available to Common Shareholders: $2,155 million, up 3.2%.
- Diluted Net Earnings Per Common Share: $6.99, reflecting a 7.2% increase.
- Adjusted Net Earnings Available to Common Shareholders: $2,637 million, up 6.3%.
- Adjusted Diluted Net Earnings Per Common Share: $8.55, marking a 10.3% increase.
- Net Capital Investments: $1,837 million, including $2,200 million in gross investments and $363 million from property sales.
- Share Repurchases: 11.0 million shares repurchased at a cost of $1,754 million.
- Retail Free Cash Flow: $1,506 million.
Strategic Investments and Market Expansion
Loblaw continued to strengthen its market position through significant investments in store expansion and customer engagement initiatives. The expansion of pharmacy care clinics, strategic pricing strategies, and the continued success of the PC OptimumTM loyalty program have positioned the company for future growth.
The opening of the first U.S.-based T&T® Supermarket in 2024 marks a crucial step toward international growth, demonstrating Loblaw’s capability to expand beyond the Canadian market. In 2025, Loblaw plans to continue investing in store expansions, loyalty programs, and e-commerce platforms to enhance customer engagement.
Challenges and Performance Drivers
While Loblaw reported strong revenue growth and market share expansion, certain challenges affected its financial performance. The company recorded a non-cash charge of $129 million ($94 million net of income taxes) related to the revaluation of PC Optimum loyalty points. This adjustment reflects increased program participation and higher redemption rates.
Operational costs and economic factors also played a role in shaping the financial results. The slight decline in retail gross profit percentage indicates the impact of pricing strategies and promotional activities designed to maintain customer loyalty and drive sales.
2025 Outlook
Loblaw is focused on continued growth through:
- Retail Expansion: Targeting 80 new food and drug stores and 100 additional clinics.
- Loyalty Program Enhancement: Strengthening PC OptimumTM offers to maintain customer engagement.
- E-commerce Growth: Building on the 16.9% increase in online sales, with continued investment in digital platforms.
- Operational Efficiency: Managing costs and improving supply chain operations to drive profitability.
- Sustainability Initiatives: Enhancing responsible sourcing and waste reduction programs.
