UPDATE 2-Loblaw profit jumps on acquisition, currency

* EPS C$0.49 vs consensus C$0.44

* Revenue rose 3.1 pct to C$6.93 billion

* Same store sales up 0.3 percent

* Shares up 2.3 pct at C$38.67
(Adds background and analyst comments)

TORONTO, May 4 (BestGrowthStock) – Loblaw Cos, (L.TO: ) Canada’s
largest supermarket operator, said on Tuesday profit jumped 25
percent, topping expectations, thanks to its purchase of an
ethnic grocery-store chain and the rising Canadian dollar.

Loblaw, whose shares rose on the news, said the August 2009
purchase of T&T, which specializes in Asian groceries, added
about 2 percent to its total sales.

The company, whose banners include Loblaws and No Frills,
also benefited from the strengthening Canadian dollar. Grocers
import almost all of their produce from late fall to late
spring, and have paid lower prices as a result of the stronger
currency.

Looking ahead, upgrades to Loblaw’s delivery and technology
systems will likely weigh on its results for the remainder of
the year, the Brampton, Ontario-based company said.

“Obviously, (the system upgrades) are going to be a big
headwind going forward,” said Brian Yarbrough, an analyst at
Edward Jones in St. Louis, Missouri.

“There is still work to be done on the systems
implementation and this is the biggest risk over the months. To
think it will be seamless is being unrealistic.”

Earnings rose to C$137 million, or 49 Canadian cents a
share, during its first quarter, from C$109 million, or 40
Canadian cents, a year earlier.

Sales rose 3.1 percent to C$6.93 billion, with sales in
stores opened at least a year up 0.3 percent.

Analysts, on average, had expected earnings of 44 Canadian
cents a share excluding items, and revenue of C$6.79 billion.

Loblaw expects to spend about C$185 million ($180.9
million) more this year on the IT upgrades than last year, and
has earmarked about C$1 billion for capital projects in 2010.
About half of that is to be spent on store renovations that
will boost square footage by about 1 million square feet to 52
million square feet.

Shares of Loblaw rose 41 Canadian cents to C$38.21 in
midmorning trade on the Toronto Stock Exchange.

Stock Market Today

($1=$1.02 Canadian)
(Reporting by Scott Anderson; Editing by Frank McGurty)

UPDATE 2-Loblaw profit jumps on acquisition, currency