George Weston: profit rises as costs crimped

Toronto / CA. (gwf) Food producer and Loblaw parent George Weston Limited reported a Q1/2008 profit of 131 million CAD, up 26 percent from a year-earlier 104 million CAD on price increases and cost reductions. The Toronto-based company said its earnings amounted to 0,91 CAD per share, compared with 0,70 CAD per share in the first quarter of 2007. Its Loblaw grocery chain is on track in its turnaround plan but «lags behind as an effective selling operation», the company says in a statement. It also warned that the Weston Foods division «is experiencing unprecedented cost pressure as the prices of flour and other input items continue to escalate», though price changes, a shift in sales mix and cost reductions allowed it to record positive operating income growth. Sales for the period ended March 22 ticked up 1,6 percent to 7,34 billion CAD from 7,2 billion CAD in the year-earlier period, foreign currency translation negatively impacting growth by about 1,6 percent (press release).