Loblaw Companies Limited

Loblaw said second-quarter revenue, including PC Financial, was $15 billion, up 4.1% year over year. Adjusted EBITDA increased 5.1% to $1.9 billion, adjusted EBITDA margin improved by 10 bps, adjusted diluted EPS rose 11.9% to $0.66, and GAAP diluted EPS was $0.64, up 8.5%. In food retail, absolute sales grew 3.3% and same-store sales grew 1.6%; in drug retail, absolute sales rose 6.1% and same-store sales rose 4.6%. Retail gross margin was stable, up 10 bps, and retail SG&A was flat at 20% of sales. For the outlook, management expects retail earnings to grow faster than sales and adjusted net EPS to grow in the high single digits, even though only one month of EQB earnings will be recognized in Q3 after the PC Financial sale. They also said the company now expects to repurchase $2.1 billion of shares this year, up $200 million from the initial plan, and store openings are still expected to be about 75 this year.

Per Bank emphasized execution, value, and disciplined growth, saying customers remain focused on promotions and discount formats and that Loblaw is responding with stronger offers across both discount and conventional banners. He highlighted continued expansion in hard discount, strong results from T&T in Canada and the U.S., and solid momentum in pharmacy, e-commerce, and Shoppers refresh tests. His tone was confident and upbeat, with repeated comments that the business is performing well and that the company is well positioned for continued growth.

Richard Dufresne framed the quarter as another period of consistent operational and financial performance, citing 4.1% revenue growth, $1.9 billion of adjusted EBITDA, 11.9% adjusted EPS growth to $0.66, and stable gross margin and SG&A. He noted the PC Financial sale closed after quarter-end, bringing in $625 million in cash, and said Loblaw now owns about 19.9% of EQB and expects to move toward about 25% over time. He also said share repurchases totaled $552 million in Q2 and $1.2 billion year to date, with the 2026 buyback target now $2.1 billion, and he described the East Gwillimbury DC ramp and South Caledon build as important long-term supply-chain investments.

Analysts pressed management on consumer health, discount-vs-conventional mix shifts, fuel costs, GLP-1 impacts, square footage growth, e-commerce pressure, and whether gross margin gains will be reinvested or retained. Management said the consumer environment is largely unchanged, with more value-seeking and a modest move to discount, while conventional remains healthy despite tougher comparisons and some one-time headwinds such as Easter timing and tariff-related pricing reversals. They also said fuel-cost inflation is still below 3% but could pressure suppliers if it lasts, that GLP-1 generics should lift next-year pharmacy revenue and gross profit dollars well above top-line growth, and that e-commerce is not hurting store operations.