Loblaw Cos. Ltd. ‘s discount stores outperformed its mainline banners in the first quarter of 2026 as cash-strapped consumers sought better value for their dollar.

The grocery giant on Wednesday released its earnings results for the quarter ended March 28, reporting overall revenues of $14.72 billion, a 4.2 per cent increase from the previous year. This included retail revenue of $14.48 billion.

The company said it will raise its quarterly dividend by 10 per cent to approximately 15.52 cents per share.

Loblaw’s expansion during the quarter included opening five discount stores and eight drug stores.

“The company’s discount banners outperformed again, demonstrating that Canadians are responding well to greater access to Maxi and NoFrills stores,” it said in a news release.

Sales growth in food retail and e-commerce, along with increased customer traffic and new store openings drove topline performance for the quarter, according to the release.

Food retail same-store sales were up 2.4 per cent, while drug retail same-store sales increased by 4.1 per cent. Its e-commerce sales rose 20.3 per cent, led by growth in PC Express delivery, as well as its integration of third-party delivery options.

“We are very pleased that our strategic investments in opening new stores, and our focus on value, are resonating with Canadians and helping us to deliver strong financial results,” said chief executive Per Bank.

The company’s retail gross profit percentage of 31.4 per cent decreased by 10 basis points, primarily due changes in sales mix in drug retail categories and partially offset by continued improvements in shrink. Its food retail gross margin was flat, it said.

Retail operating income was $1.01 billion, up 20.5 per cent. Retail adjusted EBITDA came in at $1.607 billion, a 6.5 per cent increase.

Net earnings available to common shareholders were up 18.1 per cent to $594 million, which comes to a diluted net earnings of $0.50 per common share, up 19.0 per cent.

On an adjusted basis, the company’s net earnings were $609 million, up 6.8 per cent, or adjusted diluted net earnings of $0.52 per common share, up 10.6 per cent.