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BRAMPTON, Ontario — Loblaw Cos., which recently announced plans to acquire Shoppers Drug Mart, posted a 2% increase in second-quarter revenue and a 1.1% lift in same-store sales as its drug store sales fell flat for the period.
Revenue for the quarter totaled C$7.5 billion, up 2% compared with the year-ago period. Retail sales increased 1.9% to C$7.37 billion.
Net earnings totaled $C178 million, up C$22 million from the year-ago period. The increase was largely because of the increase in operating income, partially offset by an increase in the company’s effective income tax rate.
Despite a competitive retail environment, the retailer raised its full-year operating income outlook to mid-single digits. This compares with the retailer’s prior outlook of low-single digit growth.
“Earlier this month, we announced the successful IPO of Choice Properties REIT. In doing so, we unlocked significant value for shareholders, and established an attractive new growth platform for Loblaw. Last week, we announced a transformational combination with Shoppers Drug Mart. These two transactions mark the beginning of a powerful new chapter for Loblaw,” stated Galen Weston, executive chairman of the company. “Combining Loblaw and Shoppers Drug Mart will build on the strong base Vicente and his team have developed over the last two years, providing an excellent strategic complement to our existing assets, and setting the stage for further shareholder value creation.”
As previously reported, Loblaw Cos. and Shoppers Drug Mart announced on July 15 a definitive agreement under which Loblaw will acquire Shoppers Drug Mart for C$12.4 billion in cash and stock.
Under the agreement, Loblaw will acquire all of the outstanding Shoppers Drug Mart common shares for C$33.18 in cash plus 0.5965 Loblaw common shares per each Shoppers Drug Mart common share, on a fully pro-rated basis. Loblaw and Shoppers Drug Mart anticipate that the transaction will be completed within six to seven months.