Loblaw says third-quarter profit to take a hit from late Thanksgiving

A Loblaw logo is seen outside a grocery store in Ottawa, Ontario, Canada, February 14, 2019. REUTERS/Chris Wattie

(Reuters) - Loblaw Cos Ltd L.TO said on Wednesday a shift in Thanksgiving holiday this year would hit its third-quarter same-store sales and profit, sending its shares down as much as 4%.

Canada’s biggest grocery retailer also reported a dip in second-quarter earnings, as a rise in inflation hit sales of food and other household items at its stores.

Canada's annual inflation rate rose unexpectedly to a seven-month high in May. Statistics Canada said here the annual rate hit 2.4% on increased prices for vegetables and durable goods.

Chief Executive Officer Galen Weston said the company was making necessary adjustments to offset the hit from inflation, but did not provide more details.

Loblaw said it expects a 1% hit to its same-store sales and a drop of 3 Canadian cents per share in profit for the quarter as Thanksgiving will be celebrated in Canada on Oct. 14, compared with Oct. 8 last year. Loblaw typically wraps up its third-quarter earnings in the first week of October.

The Brampton, Canada-based company’s profit fell 2.4% in the reported quarter ended June 15, including a C$16 million ($12.2 million) restructuring charge.

On an adjusted basis, the company earned C$1.01 per share, in line with analysts’ estimates, according to IBES data from Refinitiv.

Revenue rose 2.9% to C$11.13 billion in the quarter.

Shares of the company, which have fallen 8.8% so far this year, were down 2% at C$66.48.

Reporting by Arundhati Sarkar in Bengaluru; Editing by James Emmanuel and Anil D’Silva