Loblaw Reports 2022 First Quarter Results¹

BRAMPTON, ONTARIO May 4, 2022 Loblaw Companies Limited (TSX: L) (“Loblaw” or the “Company”) announced today its unaudited financial results for the first quarter ended March 26, 2022.¹

Loblaw delivered another strong quarter in a retail environment experiencing fewer COVID-19 related restrictions and continued inflationary pressures. Drug Retail results were strong and drove margin expansion in the quarter, as frontstore and prescription sales benefited from the loosening of social restrictions, and Pharmacy services continued to perform well. Food sales continued to benefit from higher than normal eat-at-home levels, and customers responded favourably to data-driven marketing promotions and PC Optimum^TM loyalty program offers. The Company’s Discount division performed very well, led by strong growth in the No Frills^® hard-discount banner. The Market division performed well relative to the Canadian conventional grocery sector, but was impacted by the shift to discount.

“Loblaw demonstrated consistent operating and financial results, reflecting the strength of its portfolio of businesses and the ability to provide service and value to meet the evolving needs of Canadians,” said Galen G. Weston, Chairman and President, Loblaw Companies Limited. “We have begun the year with momentum in our core retail businesses, a clear strategic agenda, and continued traction in our growth initiatives.”

2022 FIRST QUARTER HIGHLIGHTS

• Revenue was $12,262 million, an increase of $390 million, or 3.3%.
• Retail segment sales were $12,045 million, an increase of $375 million, or 3.2%.
  • Food Retail (Loblaw) same-stores sales increased by 2.1%.
  • Drug Retail (Shoppers Drug Mart) same-store sales increased by 5.2%.
• E-commerce sales decreased by 9.8% lapping growth of 133%.
• Operating income was $738 million, an increase of $121 million, or 19.6%.
• Adjusted EBITDA² was $1,343 million, an increase of $125 million, or 10.3%.
• Retail segment adjusted gross profit percentage² was 31.1%, an increase of 80 basis points.
• Net earnings available to common shareholders of the Company were $437 million, an increase of $124 million or 39.6%. Diluted net earnings per common share were $1.30, an increase of $0.40, or 44.4%.
• Adjusted net earnings available to common shareholders of the Company² were $459 million, an increase of $67 million, or 17.1%.
• Adjusted diluted net earnings per common share² were $1.36, an increase of $0.23 or 20.4%.
• Repurchased for cancellation, 1.3 million common shares at a cost of $148 million and invested $186 million in capital expenditures. Retail segment free cash flow² was $214 million.
• The Company announced today the release of its 2021 Environmental, Social and Governance (“ESG”) Report.
• Eleventh consecutive annual increase to the quarterly common share dividend from $0.365 per common share to $0.405 per common share, an increase of 11%. Note: This is an excerpt from the full release. To view the complete document, please download the full Q1 2022 news release.

¹ This News Release contains forward-looking information. See “Forward-Looking Statements” section of this News Release and the Company’s 2021 Annual Report for a discussion of material factors that could cause actual results to differ materially from the forecasts and projections herein and of the material factors and assumptions that were used when making these statements. This News Release should be read in conjunction with Loblaw Companies Limited’s filings with securities regulators made from time to time, all of which can be found at sedar.com and at loblaw.ca.

² See “Non-GAAP Financial Measures” section in Appendix 1 of this News Release, which includes the reconciliation of such non-GAAP measures to the most directly comparable GAAP measures.