The one good thing about grocery store chains like Loblaw (TSE:L) is that, even in bad times, they still do business. People always need to eat, and they can only downsize that spending so far. Loblaw’s latest earnings report demonstrates as much, and shares gained as well. Loblaw shares were up fractionally in Thursday morning’s trading.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Loblaw’s earnings came in at $714 million for the quarter, reports noted, which worked out to $2.37 per diluted share. This blew the figures for the second quarter of 2024 out of the water, which came in at $457 million, about $1.48 per diluted share. Adjusted earnings did well too, coming in at $2.40 per diluted share against $2.15 per share in 2024’s second quarter.
Revenue was also up substantially, with Loblaw posting $14.7 billion against $13.9 billion a year prior. Individual sectors also delivered wins. Food retail same-store sales were up 3.5%. Same-store sales in drug retail were up 4.1%, and pharmacy and healthcare services gained 6.2%. Even front store same-store sales gained ground, up 1.7%.
All This and a Stock Split Too
That news was good news for Loblaw and its investors, but it got better from there. Loblaw recently announced a four-for-one stock split, to take place August 18, 2025. Designed as a way to “…enhance accessibility for retail investors and employees, and improve share liquidity…” the new move will give shareholders three more shares for every one they currently possess, though the value of those shares will each lose about 75% against their previous value. On the positive side, though, the loss may be temporary as share prices climb following the split.
Reports noted that Loblaw undertook the split to “…maintain shareholder equity without incurring Canadian income tax liabilities, reflecting Loblaw’s commitment to its stakeholders and market positioning.”
Is Loblaw a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on TSE:L stock based on six Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 29.24% rally in its share price over the past year, the average TSE:L price target of C$241.12 per share implies 9.94% upside potential.
