Loblaw Companies (L) Q1 2026 earnings summary

Executive summary

• Strong Q1 2026 performance with 4.2% revenue growth, robust adjusted EPS growth, and continued momentum from last year, driven by strong same-store sales in both Food and Drug Retail, increased customer traffic, and e-commerce expansion.

• Strategic investments in new store openings, pharmacy expansion, and technology-enabled distribution centers, with 13 new stores opened and retail square footage up 1.7%.

• Discount banners outperformed, with Canadians responding positively to expanded access to Maxi and No Frills stores.

• Customer engagement and traffic increased, driven by value offerings, loyalty programs, and promotions.

• Focus on retail excellence and execution of strategic initiatives to deliver value and convenience.

Financial highlights

• Revenue grew 4.5% year-over-year when normalized for business exits; GAAP revenue up CAD 600 million or 4.2%, with retail revenue at $14,484 million and total revenue including PC Financial at $14,724 million.

• Adjusted EBITDA increased 6.5% to $1,607 million; margin improved to 11.5%.

• Adjusted diluted EPS grew 10.6% to $0.52; GAAP diluted EPS was CAD 0.50, up 19%.

• Retail gross margin stable at 31.4%; food margins flat, drug retail margins down due to sales mix and seasonality.

• Free cash flow from retail segment at CAD 432 million, up $729 million year-over-year; CAD 648 million in share repurchases.

Outlook and guidance

• Performance for the rest of 2026 expected to closely resemble Q1, with retail business earnings to grow faster than sales and adjusted net earnings per share growth in the high single digits.

• Ramp-up of East Gwillimbury DC and T&T US investments to have greatest negative impact on earnings growth this year, but drag expected to end next year.

• Plans to invest approximately $2.4 billion in gross capital expenditures and continue significant share repurchases.

• Confident in ability to deliver on full-year outlook.

• Quarterly dividend increased by 10%, marking the fifteenth consecutive year of dividend growth.