Loblaw Q4 profit jumps

Loblaw 3-month TSX chart

Loblaw Companies Ltd. said Wednesday that stronger sales, an absence of restructuring charges and a gain from the sale of its food services business helped propel it to a big jump in its fourth-quarter profits.

The Toronto-based grocery retailer said it made $188 million, or 69 cents a share, on sales of $7.75 billion in the fourth quarter of 2008. That compared with a profit of $40 million, or 14 cents a share, on sales of $6.97 billion in the same quarter of the previous year. The fourth quarter of 2008 was one week longer than in 2007, resulting in a 7.9 per cent increase in year-over-year sales.

Loblaw said its operating income rose more than 136 per cent year-over-year to $317 million.

"Our fourth quarter performance demonstrated that we are continuing to edge forward," said Galen G. Weston, the executive chairman of Loblaw. "However, given the unpredictable economy and tough competitive environment, we remain cautious and are prepared for a challenging 2009."

The fourth-quarter profit included:

Income of $8 million, versus a charge of $36 million in 2007, because of lower-than-anticipated restructuring costs.Income of $17 million related to stock-based compensation, compared to a charge of $52 million.A gain of $22 million on the sale of the company's food service business in the fourth quarter of 2008.