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Loblaw beats quarterly estimates as Canadian shoppers turn to local and discount brands (Reuters) -Canadian retailer Loblaw Companies Ltd (TSX:L) beat second-quarter revenue and profit estimates on Thursday, driven by strong demand for essential products such as groceries and medicines at its Real Canadian Superstore locations and discount banners, including Maxi. Consumers seeking lower-priced alternatives across categories ranging from food to healthcare have boosted demand for discount retailers such as Loblaw. Same-store sales at its food retail segment rose 3.5% in the second quarter, while drug retail unit sales increased 4.1% from a year earlier. The "Buy Canadian" movement, sparked by trade disputes between the U.S. and Canada, has also led to consumers switching to locally made goods. This shift has led to a dramatic reshuffling of shelves at Canadian retail stores, which are now benefiting from a surge in sales of Canadian products. Loblaw’s retail sales, its biggest revenue contributor, climbed 5.4% in the quarter ended June 14, compared with a 1.4% increase a year ago. E-commerce sales also jumped 17.5%. Earlier this month, U.S. President Trump threatened to impose a 35% tariff for goods imported from Canada, starting August 1, raising concerns about an escalating trade war. Loblaw’s quarterly revenue rose 5.2% to C$14.67 billion ($10.78 billion) from a year ago. Analysts estimated a rise of 5% to C$14.64 billion, according to data compiled by LSEG. On an adjusted basis, the company posted earnings per share of C$2.40, topping expectations of C$2.33 per share. Loblaw maintained its annual adjusted profit forecast of high single-digit growth. ($1 = 1.3614 Canadian dollars) With L making headlines, savvy investors are asking: Is it truly valued fairly? In a market full of overpriced darlings, identifying true value can be challenging. InvestingPro's advanced AI algorithms have analyzed L alongside thousands of other stocks to uncover hidden gems. These undervalued stocks, potentially including L, could offer substantial returns as the market corrects. In 2024 alone, our AI identified several undervalued stocks that later surged by 30 or more. Is L poised for similar growth? Don't miss the opportunity to find out.

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