November 16, 2011 / 1:23 PM / 6 years ago

UPDATE 3-Loblaw profit rises, helped by cost controls

* Q3 EPS C$0.84 vs C$0.71 a year earlier

* Revenue up 2 pct at C$9.73 billion

* Same-store sales rise 1.3 pct (Adds analyst estimates, outlook, financial services results)

TORONTO, Nov 16 (Reuters) - Loblaw Cos Ltd (L.TO), Canada’s No. 1 grocery chain, said on Wednesday its quarterly profit rose sharply, due in part to cost controls and increased sales.

The results also benefited from a C$14 million gain from the sale of a property in North Vancouver, a decrease in net interest expense and a lower effective tax rate.

The company, which is in the middle of a multi-year program to improve productivity, said investments in its supply chain will hurt operating income in the future.

Loblaw’s earnings for the quarter ended Oct. 8 rose to C$236 million ($230 million), or 84 Canadian cents a share, from C$197 million, or 71 Canadian cents, a year earlier.

Analysts, on average, had expected earnings of 85 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose 2 percent to C$9.73 billion. Sales at established Loblaw stores, a key measure for retailers known as same-store sales, rose 1.3 percent.

Revenue in the company’s financial services division rose 3.8 percent to C$164 million. But earnings from the credit-card, personal-banking, retail-loyalty and insurance business fell 44.4 percent to C$10 million, hurt by a marketing push and customer acquisition costs.

$1=$1.02 Canadian Reporting by Allison Martell; editing by Peter Galloway

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