George Weston Ltd. (TSX:WN) says its earnings grew to $232-million in the fourth quarter, up from $112-million in the same period last year, as the company continued a restructuring plan that included the purchase of Shoppers Drug Mart (TSX:SC) by Loblaw and the launch of a real estate investment trust.
Adjusted basic net earnings per share were $1.11, up from $1 in the quarter last year and 14 cents better than estimates. Analysts had estimated 97 cents of adjusted earnings.
Earnings were boosted by a lower income tax rate but partially offset by declines in the performance of Weston Foods and Loblaw Companies Ltd. (TSX:L).
The quarter also included a $32-million restructuring charge after Loblaw said it would cut about 275 store-support positions.
Sales came in at $7.9-billion, up from $7.7-billion in the same period last year.
Basic net earnings were $1.37, up from 41 cents, on the fair value adjustment of the forward sale agreement for 9.6 million Loblaw common shares and a number of other items.
Among its divisions, Weston Foods sales rose to $413-million from $399-million, with operating income of $40-million, compared to $44-million in the same period in 2012.
Loblaw sales increased by two per cent to $7.6-billion from $7.5-billion, as same store-sales benefited by the timing of the Thanksgiving holiday but were impacted by the December ice storm in Eastern Canada as well as a strike in Western Canada.
“George Weston Limited’s fourth quarter results continue to reflect the challenging environments in which both of its operating segments participate,” said George Weston president Pavi Binning.
“Loblaw and Weston Foods will continue to execute their respective strategies with a view to driving sales growth while focusing on cost and efficiencies.”
Looking forward, the company says it expects modest sales growth for 2014, but adjusted operating income will likely decline due to continued investments that include plant start-up costs and marketing and innovation.
Loblaw moved to acquire Shoppers in July, in a blockbuster $12.4-billion deal that will allow it to better compete against retail giants such as Walmart and provide cash flow of about $1-billion to pay down debt.
During the summer, the company also spun off its real estate holdings into a new publicly traded trust, Choice Properties (TSX:CHP.UN), which remains majority owned by Loblaw.