07/23/2015 07:22 EDT | Updated 07/23/2016 05:59 EDT

Loblaw Plans To Close 52 Unprofitable Stores Across A Range Of Banners

BRAMPTON, Ont. - Loblaw Companies Ltd. plans to close 52 unprofitable stores in Canada over the next year, it says in its second-quarter earnings release.

The company made the announcement Thursday, saying the closure will come across all of its banners and formats.

It has more than 2,000 stores, and its locations include Loblaws, Provigo and Extra Foods. It also owns Shoppers Drug Mart.

Loblaw Companies said the closures will cut its annual sales by roughly $300 million a year, but will result in an improvement of $35 million to $40 million in its operating profits.

The closures are expected to cost the company a total of approximately $120 million. Of this amount, a charge of $45 million was taken in the second quarter ended June 20, including $30 million for severance and lease termination costs.

The release shows the grocery retailer's consolidated sales rose 2.2 per cent to $10.54 billion from the same quarter last year.

The firm said it made a second-quarter profit of $185 million, or 45 cents per share, compared with a loss of $456 million or $1.13 a share a year ago.

On an adjusted basis, it said it earned $350 million or 85 cents per share in the quarter compared with an adjusted profit of $297 million or 74 cents per share a year ago.

"Looking ahead, the grocery industry remains highly competitive and health-care reform continues to put pressure on our pharmacy business," company president and executive chairman Galen G. Weston said in the statement.

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