Toronto, May 6, 2026, 16:03 (EDT)
- Loblaw fell short of first-quarter revenue forecasts, with wary shoppers holding back.
- Profit climbed. The company bumped up its dividend and signed off on a fresh buyback.
- No Frills and Maxi, both discount banners, are still right at the heart of the growth story.
Loblaw Companies Limited shares slipped in Toronto after the retailer came up short on first-quarter revenue forecasts Wednesday, despite reporting a profit increase and sticking with its full-year earnings guidance. Revenue reached C$14.48 billion, missing the C$14.55 billion figure analysts were looking for, according to LSEG data via Reuters.
This revenue miss is drawing attention, with investors zeroed in on whether Canadian grocers can keep pushing sales higher without relying too much on price hikes—especially as shoppers keep choosing cheaper options. Food inflation, shipping costs tied to oil, and overall higher prices are still shaping spending habits. Reuters noted that the same wary consumer trend has surfaced at both Albertsons and Dollarama.
Loblaw didn’t miss across every metric. The Brampton, Ontario-based retailer reported a 4.2% climb in retail revenue, hitting C$14.48 billion. Food retail same-store sales improved 2.4%, while the drug retail side saw a 4.1% pickup in same-store sales. E-commerce did even better—up 20.3%. Same-store sales reflect results from shops open long enough for year-over-year comparison.
Net earnings available to common shareholders climbed to C$594 million, or 50 Canadian cents per diluted share, compared with C$503 million, or 42 cents, in the same period last year. Adjusted diluted earnings—which exclude certain items—advanced 10.6% to 52 Canadian cents per share.
Per Bank, the chief executive, put the spotlight on store growth and value for the quarter. Loblaw added five new hard-discount locations along with eight drug stores. According to Bank, the company’s emphasis on “opening new stores” and delivering “value” is striking a chord with Canadian shoppers. Loblaw
Loblaw’s stock dropped roughly 5% to C$59.99 in late Toronto trading, according to MarketScreener, with investors shrugging off the earnings beat and zeroing in on weaker sales.
Management maintained the customer base hasn’t cracked—just shifted. On the call, the bank pointed to ongoing “trading down,” with shoppers opting for cheaper chicken cuts and more ground beef instead of steak. Chief Financial Officer Richard Dufresne described the second quarter as seeing “a slight change, but not material.” Investing.com
Loblaw bumped its quarterly dividend up 10%, bringing it to roughly 15.5 Canadian cents per share, according to The Canadian Press. On the pharmacy side, prescription traffic lifted results—GLP-1 drugs like Ozempic stood out, as Bank pointed to a 40% year-over-year jump for that segment.
Loblaw has tacked on a fresh way to return capital. The company said it got the Toronto Stock Exchange’s green light for a normal course issuer bid—Canada’s term for buybacks—enabling the purchase of as many as 58.1 million common shares in the 12 months beginning May 8.
One development away from the grocery shelves: EQB Inc. and Loblaw got the green light from Ottawa for EQB’s buyout of PC Financial just a day ago. Both companies are eyeing a summer 2026 close. Loblaw’s anticipating about C$600 million in cash from the deal and related transactions.
The danger? Trade-down behavior could stick around longer than Loblaw anticipates. Should suppliers hit the company with higher costs—think freight, oil—Loblaw faces a decision: keep prices steady to maintain foot traffic, or raise them and risk unsettling shoppers who are already hesitant.
Loblaw says it can juggle both—driving traffic to its discount stores while boosting profits. But judging by Wednesday’s reaction in the stock, investors are clearly expecting more.
