Loblaw Companies Ltd. says its net income plunged in the second quarter despite surging revenues because of COVID-19 related costs including a temporary pay boost for employees.
Canada's largest grocer says its earnings attributable to shareholders fell 41 per cent to $169 million or 47 cents per diluted share from $286 million or 77 cents per share a year earlier.
Excluding one-time items, adjusted profits were $266 million or 74 cents per share, compared with $373 million or $1.01 per share in the prior year.Revenues for the three months ended June 13 increased 7.4 per cent to nearly $12 billion, from $11.1 billion in the second quarter of 2019. Loblaw was expected to report 71 cents per share in adjusted earnings on $11.9 billion in revenues, according to financial markets data firm Refinitiv.
The company says demand shifted during the quarter towards conventional store formats with the market division's same-store sales increasing 18.8 per cent and the discount division up 4.9 per cent, while same-store drug division sales declined 1.1 per cent. It spent $282 million during the quarter on safety measures for staff and customers with about $180 million in temporary pay premiums which included a one-time bonus for store and distribution centre colleagues of $25 million.
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