George Weston Ltd to hike prices on some fresh and frozen foods thanks to weak loonie

TORONTO – George Weston Ltd., parents company of Weston Foods and Loblaw, will raise prices on a number 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 impact from the low Canadian dollar, he said. The loonie has been trading at around 74 cents US and it is expected to remain low throughout a lot of 2016.

“That will hurt us which will be pretty significant in 2016,” he explained, explaining the company buys certain ingredients in U.S. dollars.

The stop by the loonie is a key driver for inflation in Canada because 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 in contrast to a profit of $151 million or $1.18 per share in the fourth quarter of 2014, including an additional week.

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Excluding the additional week around ago quarter, the company might 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 3 months.

Weston Foods’ frozen business reached double-digit volume gains in the last fiscal year, Binning said, led by demand for doughnuts and pies.

In accessory for its frozen business, Weston Foods biscuit business – led by Girl Guide cookies – helped its bakery business earn $527 million in revenue within 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 impact of forex and an extra week in its 2014 financial year, Weston Food sales increased by 10 per cent, primarily due to higher prices, a different mixture of products and an increase in volumes.