EPS of 67c beat estimates of 66c; revenue of $16.38B missed estimates of $16.79B. Loblaw's 2026 outlook appears more balanced, with steady top-line growth and modest margin expansion. Though hard-discount expansion and pharmacy-clinic growth can keep supporting traffic and tonnage, food comparisons slowed to 1.5% in 4Q and will be more difficult going forward. The 53rd week boosted 2025 results, but that benefit rolls off in 2026, alongside PC Financial following its divestiture. Gross margin was broadly flat, and mix pressure from faster-growing discount banners and a competitive pricing backdrop may limit further expansion. Management projects high-single-digit adjusted EPS growth, down from 2025's low-teens pace, reflecting more normalized conditions and elevated capital spending ($2.4 billion) tied to store expansion and automation. We remain comfortable here.
5i Research Answer: