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OTTAWA -- Loblaw Cos.'s profit plunged in the second quarter by almost 40 percent, due to major restructuring charges, and the pressure will remain on the balance sheet for the rest of the year, Canada's largest supermarket operator said yesterday.
Loblaw reported net income of C$119 million ($113 million), or 43 Canadian cents a share, down from a profit of C$194 million, or 71 cents, in the year-ago quarter, the company said. Results took into account a C$70 million restructuring charge mostly tied to job cuts; a C$2 million charge for store closings, and C$7 million to cover inventory liquidation.
Loblaw’s operating margin was 3.1 percent, down from 4.9 percent in same period last year.
Restructuring activity at the company has been a drag on profits for a couple of years, as the chain has been shuttering stores and eliminating jobs. The chain said the restructuring pains will continue in 2007.