By Taenaz Shakir
(Reuters) - Canadian grocery and pharmacy chain Loblaw Cos Ltd <L.TO> said on Wednesday it would shut 22 unprofitable stores as the company revamps its business in the face of challenges in a brutal retail environment.
Like many other Canadian retailers, Loblaw has lost market share to bigger rivals like Wal-Mart <WMT.N> and Amazon <AMZN.O> and faces a hit next year from rises in minimum wages in its home state of Ontario.
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It beat analysts' expectations for third-quarter profit and revenue thanks largely to a rise in same-store sales at its Shoppers Drug Mart outlets, which rose 3.3 percent in the quarter, up from 2.8 percent growth a year ago.
Same-store sales growth at its Loblaw groceries was flat at 1.4 percent in the quarter ended Oct. 7 compared with the year-earlier period.
Loblaw said the store closures would come across its brands and formats and would largely be completed by the end of the first quarter of 2018.
It had earlier said it would cut 500 jobs, planning to reinvest the savings in its digital and e-commerce offering.
The Brampton, Ontario-based retailer expects to record charges for the layoffs and store closures of approximately C$135 million, most of which will be factored into its fourth-quarter earnings.
It also expects annualized savings of about C$85 million from the changes.
Excluding items, the company earned C$1.39 per share for the third quarter, beating analysts' average estimate of C$1.30 per share, according to Thomson Reuters I/B/E/S.
Revenue was flat at C$14.19 billion, but beat analysts' estimate of C$14.10 billion.
($1 = 1.2742 Canadian dollars)
(Reporting by Taenaz Shakir, additional reporting by Nishara Karuvalli Pathikkal in Bengaluru; Editing by Martina D'Couto and Patrick Graham)