(Reuters) - Loblaw Cos Ltd (L.TO), Canada’s largest grocer, reported a 29 percent fall in quarterly profit, hurt by a later Thanksgiving holiday and a decline in sales at its drugstores.
The Thanksgiving holiday in Canada fell on October 14 this year, nine days after the company’s third quarter ended.
The holiday was on October 8 last year, just two days after the quarter ended, meaning the company got some benefit from shopping ahead of the holiday.
Loblaw cut its full-year earnings outlook due to higher-than-expected investments in store expansions and certain food categories as competition intensifies.
That is one of the reasons Loblaw is buying Shoppers Drug Mart Corp SC.TO for C$12.4 billion.
Canada’s No.3 grocer Metro Inc (MRU.TO) on Wednesday also reported a lower quarterly profit and blamed competition.
Loblaw said on Wednesday it expects operating income in fiscal 2013 to be flat with 2012. In July, it forecast income would grow in the mid-single digits percentage-wise.
Earlier last month Loblaw, which is also involved in financial services and property leasing, said it was cutting about 275 jobs as part of its drive to improve operations.
Third-quarter net income fell to C$154 million ($147 million), or 55 Canadian cents per share, from C$217 million, or 77 Canadian cents per share, a year earlier.
Excluding certain one-time items, profit was 73 Canadian cents per share, below analysts average estimates of 80 Canadian cents, according to Thomson Reuters I/B/E/S.
Total revenue rose 2 percent to C$10.01 billion, but fell short of analysts’ estimates of C$10.04 billion.
Sales at established stores, a key measure for retailers, climbed 0.4 percent, compared with a 0.2 percent fall a year earlier.
Loblaw shares closed at C$47.84 on the Toronto Stock Exchange on Tuesday.
($1 = 1.0493 Canadian dollars)
Reporting by Solarina Ho and Garima Goel; Editing by Ted Kerr and Savio D'Souza