Loblaw Cos. Inc. saw a big boost in first-quarter earnings due to changes in its retirement plan and a resulting gain.
The Canada?s biggest grocery chain earned $171-million, or 60? per share on a fully diluted basis in the first quarter ended March 23, compared with $122-million (43?) in the same period of 2012.
The quarterly profit includes a gain of $51-million, or 13? per share, related to defined benefit plan changes made during the quarter. Loblaw said it will realize annual pre-tax savings of about $14-million related to the retirement plan changes.
The company also hiked its dividend for the second time in six months, from 22? per common share to 24?, a rise of 9.1%.
Revenue was $7.2-billion, up 3.8% from $6.9-billion in 2012 and same-store sales, a key measure of performance in retail, were up 2.8%.
Loblaw shares rose 5.26% to $45.00 in TSX trading at 10:51 a.m. ET Wednesday.
?The first quarter showed continued evidence of momentum in our core business,? Galen Weston, Loblaw?s executive chairman, said in a statement. ?Greater assortment and an improved in-store experience are resonating with customers, translating into same-store sales growth and positive trends in tonnage and market share.
?Despite the increasingly competitive environment, I believe that our improving customer experience and demonstrated ability to create leverage by driving cost savings and efficiencies will enable us to win in the marketplace and deliver value to our shareholders.?
This quarter marks the start of a pivotal year for the grocery retailer, which is in the final phase of a massive IT systems overhaul, and has plans to create a $7-billion real estate investment trust for its properties. The company said Wednesday it expects to file a preliminary prospectus for its real estate investment trust in late May and complete an initial public offering in early to mid-July.
The company has also taken a bruising in the public eye for an association to the Bangladesh factory collapse last week, where some of its low-priced Joe Fresh apparel line was made. Along with British retailer Primark, Loblaw has said it will compensate the families of the victims.
Source: http://business.financialpost.com/2013/05/01/loblaw-raises-dividend-plans-7-billion-reit/
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