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Loblaws 2012 Results (quarterly,half,financials)

 

For Most Recent Results refer to : Loblaws 2013 Quarterly Financial Results

Period Ending December 29, 2012  Loblaws assets grew 3.06% between December 2011 and December 2012.  Annual revenue up +1.13% to $31.604 billion, with net sales of retail items up +0.8% to $30.960b.  same-store sales in the last quarter of the year were flat at 0.0% (lower than both Sobeys and Metro Inc which held steady at over 1%).  4Q profit down -18% compared to -6%, -19%, -22% in the preceding three quarters of the fiscal period.  On the year net income was down -15.5% to $650 million however comprehensive income was up +12% to $629 million (difference was a actuarial losses: $208m in 2011 vs $20m in 2012).  more info here

financial services segment which includes the mobile phone business: revenue up 18%, ebit up 108%.

Period Ending October 6, 2012  Loblaws assets grew 2.63% between October 2011 and October 2012.  Quarterly (3rd, 16 wks):  Food/Clothing:  Sales up +0.7% -> $9.627B, Gross Profit up +1.6% -> $2.104B, Net Earnings down -6.8% -> $222M, same-store sales decline -0.2% (vs 1.3% growth last year).  9M2012 (40 wks):  Food/Clothing:  Sales +0.8% -> $23.671B, Gross Profit down -0.1% -> $5.244B, same-store sales decline -0.2% (vs 0.4% growth last year).  40 wks operating income down -14% -> $873M putting oper.margin at 3.7% (vs 4.3% last year).

Retail Operations ----> Food/Drugstores/Joe Fresh Style/Gas stations

Financial Services ----> Presidents Choice Financial, Debit and Credit Card transactions

Period Ending June 16, 2012 (quarterly dividend paid July 1st, half dividend paid July 31st followed by October 2012).  Loblaws assets grew by 7.70% between March 2011 and June 2012.

C$ mil revenueoper.incomeebit ebitda   margin   profit  EPS    div  assets
  retail  finance  total  retail   finan   total   retail    finan   total  total total total  total    total   retail  finance    total 
2012 (52  wks) 30,960 644 31,604 1101 95 1196     821 1642 5.2% 650  2.31b 85c  15,474  2487  17,961 
9M2012 (40 wks) 23,671 468 24,139 873 61 934  656   27 683 1524 6.3% 507          
9M2011 (40 wks) 23,477 400 23,877 1015 54 1069 806  17 823 1598 6.7% 595          
4Q2012 (12 wks) 7289 176 7465 228 34 262     138 100 1.3% 143 48c 22c 15,474   2487 17,961
3Q2012 9563 164 9727 397 24 421  316   10 326 639 6.6% 236 84c 21c       16,909  
2Q2012 (12wks) 7236 139 7375 275 15 290 209 4  213  469 6.4% 159 57c 21c  14,958    2311   17,269  
2Q2011 7157 121 7278 333 12 345 265 2 267 504 6.9% 197 70c 21c 14,441  2136  16,577
 1H2012   14,044  268  14,312   500 29 529 370 8 378 878 6.1% 285 101c 42c      
1H2011   13,914   236 14,150  618 30 648 490 7 497 959 6.8% 359 128c 42c      

 

QUARTERLY

3Q2012

Retail revenue was up +0.7% on account of internal food price inflation (during the period, the national CPI average was 1.8%).  Apparel sales flat.

Financial Services revenue was up +21.95% to $200M on account of higher PC Telecom revenue (mobile shop kiosk launched in 4Q2011) and higher interest fees from credit card charges; there were minor losses stemming from higher receivable balances.

3Q same-store sales declined -0.2% which is concerning considering competitors Sobeys (1.8% period ending August 4, 2012) and Metro Inc (1.1% growth in period ending September 2012) recorded strong growth.

Fiscal 2012 capital expenditure is expected to be in the range of $1.1 billion, 40% of which is for IT Infrastructure and Supply Chain Projects.

2Q2012

For the 12 weeks ending June 16, 2012, including in-store apparel sales, the 1,047 Loblaw supermarkets (585 corporate, 462 franchise), sold $7.236b worth of retail merchandise (up +1.1% or +$79 million vs 2Q2011). 

Same-store sales growth was only +0.2% but that's still higher than the -0.4% recorded last year (by comparison, Sobeys reported a +0.7% increase in same-store sales during the quarter ending May 5, 2012).  Loblaw Companies total revenue (includes Presidents Choice Financial) was up +1.33% to $7.375b (+$97 mil)

Company Earnings per share:  -18.57% / -18.84% to 57c/56c for basic/diluted (from 70c/69c in 2Q2011).

Retail Segment (98.12% of total revenue):  Though revenue (up +1.33% to $7.236b which is the highest level of quarterly revenue in the last four quarters), gross profit (steady at a difference of only -$15m --> $1.611 billion) and same-store sales growth (+0.2%) were relatively stable indicators, the company's bottom line wasn't;  operating income $275m (-17.4%) and operating margin 3.8% (4.7% --> 3.8%) declined.

Bad News:  Apparel sales were FLAT (vs good last year) while gas bar sales, and general merchandise sales DECLINED.  A lot of the increase in revenue is coming from higher food sales revenue HOWEVER that doesn't exclude the natural increase in the average price of food (last quarter, Canada's food price inflation was +2.5%).

Good News:  Same-store sales UP (compared to down at this point in 2011) but this increase is attributable only to higher food sales (drugstore/apparel either down or flat).

--> Last 52 weeks: Loblaw Companies opened 22 new stores (both corporate and franchise) while at the same time store closures numbered only 7 (leading to 0.80% increase in floor space --> +0.4 million square feet).

Operating Income down by $58m or -17.4%:  operating margin down to 3.8% vs 4.7% last year due to lower foreign exchange gains, lower gross profit, higher operating costs (labour in particular).

Gross Profit relatively steady being down by only $15m or -0.94% to just over $1.6b attributable to higher transportation costs, higher food input costs;  there was also an additional $10m in customer proposition costs that wasn't included as operational expense. 

 

2Q 2012 Financial Services

Revenue to $139 million (+14.87% or $18m), operating income to $15m (+25.00% or $3m), EBIT doubled to $4m (vs $2m last year).

Good News

--> Net credit card receivables up +4.9% to $2.049 billion.  Financial services revenue increase is due to more money being taken out on transactions (average withdrawal worth more).

--> Presidents Choice Telecom business is expanding !  and that's boosting financial services revenue.

Bad News:  Operating income down due to higher loyalty costs.

Capital Expenditure:  Fiscal 2012 will see loblaws spending $440m just on IT infrastructure;  another $660m in CAPEX will go to other retail operations.  That's a total of 1100m in capex which is about 3X higher than the company spent over the last six months ($367m June 2011 - June 2012)

Consolidated Results Key Indicators

Net earnings $159m (down -$38m or -19.3% to $159m which is the second lowest level for quarterly profit in last six quarters); and EBITDA $469m (down -$35m or -6.94% --> ebitda margin down to 6.4% from 6.9%) declined and the decline is significant considering last year at this point Loblaws recorded more gross profit ($1.626b vs $1.611b), more operating income ($333m vs $275m) to go along with a higher operating margin (4.7% vs 3.8%) even though revenue was smaller ($7.157b vs $7.236b).

Fiscal 2012 HALF Results

Revenue:  Between January and June 2012 Loblaws revenue is $14.312b (51.53% of it in the 2Q)

Profit:  $285m (55.79% of it in the 2Q) down from $359m in 1H2011.  That, despite income taxes being 32.61% lower ($138m --> $93m).

Operating Income:  $529m (54.82% in 2Q vs 1Q) down -18.36% from last year.
Depreciation and Amortization up +12.22% ($311m --> $349m)
EBITDA:  $878m down -8.45% ($959m --> $878m).

Balance Sheet Notes

Total Debt:  As of June 16, 2012 the company is carrying $6.562 billion in total debt (+$134m vs June 18, 2011) $5.369b of that being long term debt (+$5m vs June 18, 2011).

Bad News:  Total debt due within a year is up to its highest level in over a year, it is now at $226m (June 16, 2012) vs only $81m on June 18, 2011.

The company now puts total assets at $17.269b up +4.16% vs June 2011 but down -0.91% vs December 2011;  In just the last six months cash equivalents are down -$43m or -4.45%.  CAPEX: $367M (up from $316m)


NOTES:  Food price inflation across Canada was 2.5% in the latest quarter the lowest in the last 4 quarters (2.5% is GREAT considering it was 5.2% / 4.9% in the quarters 6 months ago / 9 months ago).

Locations: As of June 16, 2012 Loblaw Companies oversees 585 corporate stores (+7) and 462 franchise stores (+8).  Average store size is now 64,100 ft2 for corporate (-0.9%) and 29,600 ft2 for franchise (exactly the same as on June 18, 2011);  total net retail space is up +0.7m ft2 since 3Q2010;  +0.4m ft2 since 2Q2011 (millions of squared feet).

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