TORONTO – George Weston Ltd., the parent company of Weston Foods and Loblaw, will raise prices on some of its food products this year to assist protect it from punctures from the weak loonie.
The company anticipates raising prices on products from its fresh and frozen businesses, president and CEO Pavi Binning told a celebration call with investors following the company reported its fourth-quarter earnings Thursday.
The increases will help to cover the outcome of the low Canadian dollar, he said. The loonie has been trading at around 74 cents US and is expected to remain low throughout a lot of 2016.
“That will hurt us and that will be pretty significant in 2016,” he explained, explaining the company buys certain ingredients in U.S. dollars.
The drop in the loonie is a key driver for inflation in Canada as it has pushed the expense of imported goods like fresh fruits and vegetables higher.
Overall, George Weston earned $138 million within the fourth quarter, or $1.08 per share. That compared with an income of $151 million or $1.18 per share in the fourth quarter of 2014, including an extra week.
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Excluding the additional week around ago quarter, the organization would have earned $122 million or 95 cents per share.
Sales for that quarter ended Dec. 31, totalled $11.25 billion in 2015 and $11.73 billion in 2014 over 13 weeks or $10.92 billion over 12 weeks.
Weston Foods’ frozen business reached double-digit volume gains within the last fiscal year, Binning said, led by demand for doughnuts and pies.
In addition to its frozen business, Weston Foods biscuit business – led by Girl Guide cookies – helped its bakery business earn $527 million in revenue in the fourth quarter.
In the fourth quarter of 2014, the bakery business earned $469 million in revenue over 13 weeks or $438 million over 12 weeks.
Excluding the outcome of forex and an extra week in its 2014 financial year, Weston Food sales increased by 10 per cent, primarily due to higher prices, another mixture of products and an rise in volumes.
