George Weston Limited’s latest earnings for its third quarter of 2020 saw strong performances driven by its Loblaw subsidiary and continued demand for baked goods.
"Our financial results in the third quarter underscore the resiliency of our businesses, with each showing improved financial performance over the second quarter of 2020," said Galen G. Weston, chairman and chief executive officer, George Weston Limited. "Loblaw generated strong same-store sales and furthered key strategic initiatives. Choice Properties collected close to 98 per cent of rents in the quarter and made significant progress in its capital recycling program to further improve the quality of its portfolio. And after a very challenging second quarter, Weston Foods experienced an improvement in foodservice sales and better service levels and manufacturing efficiency, all while continuing to advance its transformation program."
Loblaw Companies Limited beat quarterly expectations and boosted its dividend on November 12 as Canadians continued to spend more on groceries during the ongoing pandemic.
Weston pointed out during an earnings call noted all subsidiaries faced pandemic challenges “with confidence and maintained commitment to safety.” He added that “Loblaw resisted pressure to increase prices and as a result saw customer satisfaction scores reach an all-time high.”
In its quarterly report, George Weston says it earned a profit available to common shareholders of $303 million ($1.96 per common share) for its latest quarter, up from $69 million from a year earlier.
Revenue in the 16-week period ended October 3 totalled $16.21 billion, up from $15.23 billion a year ago.
Choice Properties Real Estate Investment Trust ("Choice Properties") results reflected solid earnings, increased rent collections, lower bad debt provisions and the resumption of investment activity after a difficult second quarter. During the third quarter, Choice Properties collected 98 per cent of contractual rents, further underscoring the stability of its necessity-based portfolio.
Weston Foods sales and earnings improved in the third quarter of 2020 compared to the second quarter, as food retailers began to reopen bakery display cases and government mandated restrictions for dine-in restaurants eased in several regions. During the third quarter of 2020, Weston Foods incurred $4 million in COVID-19 costs relating to increased health and safety measures to protect its colleagues. Despite the easing of certain COVID-19 restrictions in the quarter, Weston Foods' year-over-year financial results continue to reflect the negative impact of the pandemic on sales in certain retail categories and foodservice channels. Operationally, service levels and manufacturing efficiency improved, and the benefits of Weston Foods' transformation program continued.
While Weston Foods continued to face some challenges, Richard Dufresne, president and chief financial officer for George Weston, said during the earnings call that there are “encouraging signs” for the company, in part due to winning new business in the artisan, donut and bagel categories. “Demand for quality baked goods remains strong and our overall results are encouraging from each of our operating companies,” said Dufresne.