- Loblaw Companies (TSX:L) says that COVID-19 panic buying caused its strong financial performance for the quarter ending March 31, 2020
- Total quarterly revenue was up 10.7 per cent to C$11.8 billion, with operating income up 20 per cent to $541 million
- This came largely from a surge in sales during the last two weeks of March, which has now plateaued
- With the global economy still showing significant volatility, the company has not yet reissued its withdrawn guidance for 2020
- Loblaw Companies (L) is down 3.67 per cent to $70.68 per share, with a market cap of $25.28 billion
Loblaw Companies (TSX:L) says that COVID-19 panic buying drove its strong financial performance for the quarter ending March 31, 2020.
Total quarterly revenue was up 10.7 per cent to C$11.8 billion, compared to $10.66 billion in 2019’s corresponding quarter. Operating income was also up $90 million, or 20 per cent, from $451 million to $541 million.
Loblaw says that it experienced “unprecedented consumer demand” brought on by the outbreak of COVID-19. Sales hit their peak in the last two weeks of March, with widespread instances of customer stockpiling.
However, this was partially offset by a subsequent increase in expenses. The company increased its spending to benefit its employees and protect customers.
While the demand has mostly levelled out now, Loblaw is still experiencing substantial demand in its essential foods segment. The company is also experiencing sustained pressure on its pharmaceutical business.
Loblaw’s Executive Chairman, Galen Weston, said the company will continue making significant investments to keep its colleagues, employees, and customers safe throughout the pandemic.
“These are unprecedented times. I am incredibly proud of how our colleagues have risen to the challenge of ensuring that Canadians have access to the food and health essentials they need.
“We remain focused on long term value creation, and we see signs of fundamental change in consumer behaviour. Our conviction around the strategic importance of our leading positions in loyalty, digital retail, and connected healthcare is stronger than ever,” he added.
As COVID-19 continues to play havoc with global economics, Loblaw will stand by its decision to withdraw its 2020 guidance, announced on April 9. The company cited significant uncertainty surrounding the duration of the pandemic, rendering its ability to forecast financial performance “impossible.”
Loblaw Companies (L) is down 3.67 per cent to $70.68 per share at 11:39am EST.