Loblaw Companies Misses Q3 Revenue Estimates

(Reuters) – Canadian supermarket retailer Loblaw Companies missed third-quarter revenue estimates on Wednesday, impacted by a slowdown in demand for non-essential goods like household items and electronics.

Consumers are curtailing discretionary spending as prices remain high, despite a decline in inflationary trends, adversely affecting the demand for premium brands offered by retailers like Loblaw.

However, Loblaw's discount banners, such as No Frills and Maxi, have benefitted from increased demand for value deals.

The company's drugstore sales displayed continued strength in the beauty category but faced challenges due to the exit from certain low-margin electronics categories and a drop in customer spending on convenience items.

Same-store sales in the food retail segment grew 0.5% in the third quarter, down from 4.5% a year ago.

The company's quarterly revenue rose to C$18.54 billion ($13.28 billion) from C$18.27 billion a year prior, falling short of analysts' average estimates of C$18.65 billion, according to data compiled by LSEG.

Loblaw's adjusted earnings per share reached C$2.50 in the third quarter, surpassing expectations of C$2.45.

($1 = 1.3960 Canadian dollars)