Loblaw Cos. Ltd. reported robust first-quarter results for 2026, with its discount banners such as No Frills and Maxi continuing to outperform traditional grocery stores as Canadians seek greater value amid economic pressures.
Financial Highlights
The grocery and pharmacy giant posted total revenues of $14.72 billion for the quarter ended March 28, a 4.2 percent increase from the same period last year. Retail revenue specifically reached $14.48 billion. Net earnings available to common shareholders surged 18.1 percent to $594 million, translating to diluted net earnings of $0.50 per common share, up 19.0 percent. On an adjusted basis, net earnings were $609 million, up 6.8 percent, or adjusted diluted net earnings of $0.52 per common share, a 10.6 percent rise.
Dividend Increase
Loblaw announced a 10 percent increase in its quarterly dividend, raising it to approximately 15.52 cents per share, reflecting confidence in its ongoing performance and cash flow.
Store Expansion and Discount Banner Strength
During the quarter, Loblaw opened five new discount stores and eight drug stores, underscoring its commitment to expanding its value-focused footprint. The company stated that its discount banners outperformed again, noting that Canadians are responding well to greater access to Maxi and No Frills locations. This trend is driven by consumers tightening their budgets and seeking more affordable grocery options.
Sales Performance
Food retail same-store sales increased by 2.4 percent, while drug retail same-store sales rose by 4.1 percent. E-commerce sales saw a notable 20.3 percent jump, led by growth in PC Express delivery and the integration of third-party delivery services. The company attributed its top-line performance to sales growth in food retail and e-commerce, increased customer traffic, and new store openings.
Margins and Operating Income
Retail gross profit percentage stood at 31.4 percent, a decrease of 10 basis points due to changes in sales mix within drug retail categories, partially offset by improvements in shrink. Food retail gross margin remained flat. Retail operating income climbed 20.5 percent to $1.01 billion, while retail adjusted EBITDA rose 6.5 percent to $1.607 billion.
CEO Commentary
Chief executive Per Bank expressed satisfaction with the results, stating that the company's strategic investments in opening new stores and focus on value are resonating with Canadians and helping deliver strong financial outcomes.
