SDM posted 1.9% same-store sales growth for the quarter ended December 29 compared to a year earlier, with pharmacy same-store sales growth of 0.6% and front store same-store sales growth of 2.8%. Loblaws’ retail food same-store sales growth was 0.8%.
Overall revenue was $11.2 billion (Canadian), an increase of $226 million, or 2.1%, compared to the fourth quarter of 2017.
Retail segment sales were $10.98 billion, an increase of $181 million, or 1.7%, compared to the fourth quarter of 2017.
Operating income for the three months was $445 million, an increase of $388 million, or 680.7%, compared to the fourth quarter of 2017. Operating income was positively impacted year-over-year by charges recorded in the fourth quarter of 2017 related to the launch of the PC Optimum program, restructuring and other related costs and the Loblaw card program.
Adjusted EBITDA was $895 million, an increase of $13 million, or 1.5%, compared to the fourth quarter of 2017. Net earnings from continuing operations were $228 million, an increase of $252 million compared to the fourth quarter of 2017. Diluted net earnings per common share were $0.61, an increase of $0.67 compared to the fourth quarter of 2017.
Adjusted net earnings were $388 million, a decrease of $10 million, or 2.5%, compared to the fourth quarter of 2017. Adjusted diluted net earnings per common share were $1.03, an increase of $0.01, or 1%. Adjusted net earningsincluded the decline in underlying operating performance of the financial services segment, which included investments in digital strategy and was negatively impacted by lower core banking income attributable to the discontinuation of the personal banking services under the PC Financial brand, partially offset by the improvement in underlying operating performance of the retail segment. The increase in adjusted diluted earnings was due to the favorable impact of the repurchase of common shares.
“Q4 brought a fitting close to 2018, a year in which we set thoughtful but ambitious financial targets and then followed through on them. We saw strength in the underlying food and drug results, delivered through strong sales, core growth margin expansion based on data-driven margin decisions, and SG&A [selling, general and administrative expenses] disciplines with new process and efficiency wins. In turn, we intensified investments in the right strategic areas,” Loblaw president Sarah Ruth Davis said during a conference call discussing the results.
“Our strategy is designed to rapidly accelerate growth in three important areas that matter to our customers: everyday digital retail payments and rewards and connected health care. We’ve made significant progress in each of these areas,” she said.
For the full year, retail sales edged down 0.1% to $45.84 billion from $45.86 billion. Sales in the retail food segment slipped almost 1% to $32.97 billion, despite a 1.1% comp-store sales uptick. SDM’s sales grew 2.3% to $12.87 billion, as same-store sales rose 2.4%, including advances of 3.5% in the front end and 1.2% in the pharmacy.
“We are pleased to deliver strong operational performance again this quarter, achieving our full year financial targets in a challenging year,” said Loblaw executive chairman, Galen Weston. “Our strategy has momentum and we are accelerating our investments to deliver customer and shareholder value over the long-term.”