Loblaw Cos. (L) and Metro Inc. (MRU), Canada’s largest and third-largest grocers, tumbled after reporting quarterly profit dropped amid increased competition.
Loblaw fell 7.5 percent to C$44.24 at 4 p.m. in Toronto, the most since Nov. 15, 2007, after saying profit for the year will be unchanged from 2012. Metro declined 5.7 percent to C$62, the most since Nov. 21, 2008.
Brampton, Ontario-based Loblaw said it made “greater than anticipated investments” in targeted food categories due to increased competition in the third quarter.
“The company remains committed to its strategy to drive its customer proposition, including investments in food margins, in the fourth quarter,” Loblaw said today in a statement. “As a result, the company expects adjusted operating income and operating income for the full year to be flat compared to 2012.”
Loblaw’s same-store sales rose 0.4 percent in the third quarter compared to the year-earlier period, the company said. The sales were hurt by the timing of the Canadian Thanksgiving holiday. Profit fell 29 percent to C$154 million ($147 million), or 54 cents a share, from C$217 million, or 75 cents, a year earlier, the grocer said in its financial statement.
Metro’s same-store sales slid 1.8 percent in the fiscal fourth quarter ended Sept. 28, the Montreal-based grocer said today in a statement. Profit earnings dropped 42 percent to C$83.6 million, or 88 cents a share, from C$145.1 million, or C$1.46, a year earlier.
Sales “were impacted by intense competition, especially in Ontario, resulting from an increase in competitive square footage that exceeded market growth,” Chief Executive Officer Eric R. La Fleche said in today’s statement.
Sobeys Inc., a unit of Empire Co., is Canada’s second-largest grocer.
To contact the reporter on this story: Doug Alexander in Toronto at firstname.lastname@example.org
To contact the editor responsible for this story: David Scanlan at email@example.com