BRAMPTON, Ont. — Loblaw Companies Ltd. reported a drop in its fourth-quarter profit compared with a year ago, hit by costs related to the announcement of its PC Optimum loyalty rewards program.
The company merged the Shoppers Optimum and PC Plus programs this year under the PC Optimum brand.
The retailer, which includes Loblaws and Shoppers Drug Mart, says its profit available to common shareholders totalled $19 million or five cents per share for the quarter. That compared with a profit of $201 million or 50 cents per share in the final quarter of 2016.
On an adjusted basis, Loblaw says its earnings available to common shareholders totalled $441 million or $1.13 per share, up from $393 million or 97 cents per share in the fourth quarter of 2016.
Analysts had expected an adjusted profit of $1.11 per share, according to Thomson Reuters.
Revenue for the 12-week period fell to $11.03 billion compared with $11.13 billion a year earlier due to the sale of the company’s gas bar operations.
Food retail same-store sales were up 0.5 per cent, excluding gas bar operations, while drug retail same-store sales increased 3.6 per cent.
The company had warned in November that it expects 2018 “will be a very difficult year” as the Canadian grocery industry faces pressures from multiple fronts, including discount and online retailers, and minimum wage increases in some provinces.
At the time, the company announced it would close 22 stores and launch home delivery in Toronto and Vancouver.
Loblaw has been in the public spotlight recently since admitting the company, along with its parent George Weston Ltd., participated in an alleged industry-wide bread price-fixing scheme for more than a decade.
The two companies tipped off the Competition Bureau and received immunity from criminal proceedings in return.
Companies in this story: (TSX:L, TSX:WN)