BRAMPTON, Ont. - Loblaw Companies Limited (TSX: L) is increasing its dividend and is reporting adjusted net earnings went up by 3.7 per cent to $139 million in the first quarter.
The grocery store giant says its dividend will go up by about 2.1 per cent to 24.5 cents per common share.
Loblaw says adjusted earnings per share were 49 cents per share compared with 48 cents or $134 million year-over-year.
Revenues were up 1.2 per cent to $7.29 billion compared with $7.2 billion in the same quarter in 2013.
Net earnings dropped 40 per cent to $103 million, or 37 cents per share, compared with $171 million, or 61 cents per share, affected by an increase in interest expenses and other financing charges.
Analysts on average expected net income of $122 million, or 46 cents per share, on $7.32 billion of revenues, according estimated compiled by to Thomson Reuters.
Loblaw has previously said it expects competition in the grocery segment to intensify this year as it tries to fend off domestic and foreign rivals including Sobeys, Metro (TSX:MRU), Walmart and newcomer Target, which entered the market last year.
The grocery giant is experimenting with ways to differentiate itself from competitors, including an expansion of its e-commerce platform with a test pilot of a "click-and-collect" program at three of its Toronto stores. The option, which is popular in the U.K., will allow shoppers to buy food online and later pick up their order at the store.
It's also adding fresh juice bars in 100 of its locations in Ontario, Atlantic Canada and Quebec this spring and will be a cost-effective way to use up fruit from its supermarkets.
Loblaw has also placed an emphasis on its "fresh" foods offering, by increasing its assortment, merchandising and sourcing efforts to bring more customers into the stores.
Besides, its main grocery store business, Loblaw also operates the clothing line Joe Fresh, the real estate trust Choice Properties and acquired the drug store chain, Shoppers Drug Mart last year.