There are no big surprises with the latest financial performance from George Weston Limited, which released its results for its first quarter 2021: Loblaw, and to a less extent Choice Properties, drove growth with sales for Weston Foods declining. Overall revenue increased by $19 million or 0.2 per cent to $12,352 million compared to $12,333 million in the same quarter in 2020.
"Both Loblaw and Choice Properties delivered strong operational and financial performance in the quarter," said Galen G. Weston, chairman and chief executive officer of George Weston.
"As expected, results in Weston Foods were down compared to the first quarter of 2020, reflecting the negative impact of the resurgence of the pandemic and resulting stricter lockdown measures on certain segments of the business. Looking through that impact, the business delivered strong operational performance metrics and we expect that as lockdowns ease, Weston Foods will be well positioned to return to the momentum demonstrated in the fourth quarter of 2020."
Loblaw Companies Limited revenue up
Loblaw revenue in the first quarter of 2021 was $11,872 million, an increase of $72 million, or 0.6%, compared to the same period in 2020, primarily driven by retail sales, partially offset by a decrease in financial services revenue.
Retail sales in the first quarter of 2021 increased by $86 million, or 0.7 per cent, compared to the same period in 2020 and included food retail sales of $8,479 million (2020 – $8,332 million) and drug retail sales of $3,191 million (2020 – $3,252 million).
The increase, as reported by Grocery Business earlier, was due to food retail same-store sales growth of 0.1 per cent, food retail average article price being higher by 3.9 per cent and pharmacy same-store sales growth of 3.5 per cent in the quarter.
Weston Foods sales decline
Weston Foods sales in the first quarter of 2021 were $472 million, a decrease of $63 million, or 11.8%, compared to the same period in 2020. Sales included the unfavourable impact of foreign currency translation of approximately 2.6%. Excluding the unfavourable impact of foreign currency translation, sales decreased by 9.2%.
Sales were impacted by a decrease in volumes mainly due to the impact of the COVID-19 pandemic. Volumes declined in retail celebratory categories and certain foodservice channels, and reflect the impact of lapping strong performance and stockpiling in the last two weeks of the first quarter of 2020 at the onset of the pandemic. In addition, Girl Scout cookie sales in the United States were lower compared to the same period in 2020 due to restrictions on in-person sales. The combined impact of pricing and changes in sales mix had a nominal impact on sales when compared to the same period in 2020.
Choice Properties: Invests in Caledon development
Revenue in the first quarter of 2021 was $327 million, an increase of $2 million, or 0.6 per cent, compared to the same period in 2020, and included $182 million (2020 – $186 million) generated from tenants from Loblaw retail.
Choice Properties acquired an 85 per cent interest in approximately 300 developable acres of future industrial development land in Caledon, Ontario, for $138 million. The purchase price comprised of a $100 million cash payment and a commitment to pay the remaining $38 million balance contingent on certain milestones being met over the development lifecycle.