Canadian retailer Loblaw Cos. Ltd.’s net income fell 10 per cent in the second quarter from the same time last year, a decrease that the company attributed primarily to charges related to the settlement of class action lawsuits.
Income in the second quarter fell to $457 million, or $1.48 per share, from $508 million, or $1.58 per share, compared with a year earlier.
The company announced Thursday that it and its parent company George Weston Ltd. have agreed to pay $500-million to settle a class-action lawsuit regarding their involvement in an alleged bread price-fixing scheme.
Loblaw also reported that it missed analysts’ expectations for second-quarter revenue on Thursday, hurt by soft demand for some household items and non-essential products such as apparel.
The company’s revenue rose 1.5 per cent to $13.95 billion but fell short of analysts’ average estimate of $14.17 billion, according to data from London Stock Exchange Group.
The decline in front-store same-store sales was primarily driven by lower sales of food and household items and the decision to exit certain low-margin electronics categories, the company added.
Customers in Canada have been trimming expenses even on essential items as high housing and interest rates continued to eat into their income.
The country’s retail sales fell in May mainly due to a drop in sales at supermarkets and grocery retailers, according to Statistics Canada.
But many deal-hunting consumers have helped boost food sales growth at Loblaw’s discount banners such as No Frills and Maxi.
