Canadian Manufacturing

George Weston Q2 profit drops on weakness at Loblaw, bakery division

Toronto-based grocery, pharmacy and bakery reported that profits are down, but the drop is only partially attributable to the acquisition of the Canadian Real Estate Investment

July 31, 2018  The Canadian Press

TORONTO – George Weston Ltd. says its second-quarter net income plunged 77.6 per cent to $28 million and adjusted earnings slipped to $210 million, below analyst estimates on both counts.

The Toronto-based grocery, pharmacy and bakery company says its net income per share dropped to 21 cents from $160 million or $1.23 per share in last year’s second quarter.

After excluding some items, Weston’s adjusted earnings fell to $210 million or $1.63 per share for the 12 weeks ended June 16, down from $216 million or $1.63 per share a year earlier.

George Weston’s sales slipped to $11.2 billion, mostly from the company’s Loblaw division, down 1.7 per cent from $11.4 billion in last year’s second quarter. Sales at Weston Foods dropped 8.1 per cent to $468 million from $509 million.

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Analysts had estimated George Weston would have $1.40 per share of net income and $1.68 per share of adjusted earnings, according to Thomson Reuters Eikon.

Last week, Loblaw announced that costs related to the acquisition of Canadian Real Estate Investment Trust and non-operating factors pushed down its net income by 86.1 per cent.

Loblaw’s adjusted earnings were down 5.6 per cent, at $421 million or $1.11 per share, but ahead of analyst estimates.

George Weston said Tuesday that the CREIT acquisition had nominal impact on its net earnings attributable to common shareholders but there was a bigger impact from the underlying performance of its Loblaw and Weston Foods divisions.

 


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