The head of Loblaw Companies is warning of major headwinds facing his food retailing empire as it contends with fallout from last year's stunning bread price-fixing admission.

Total revenue at Loblaw dipped 0.9 per cent in the fourth quarter to $11.03-billion. Adjusted quarterly profit rose 12.2 per cent to $441-million or $1.13 per share. Analysts, on average, expected $1.11 in earnings per share.

“As our company faces exceptional external headwinds in 2018, we are excited about our future and focused on meeting the changing needs of our customers,” said Chairman and CEO Galen G. Weston in a press release. “We remain committed to our financial framework and continued value creation for shareholders.”

In December, Loblaw sent shockwaves across the grocery industry by admitting it was involved in an alleged “industry-wide price-fixing arrangement” that drove up the cost of bread products from 2001 to 2015.

On Thursday, Loblaw said it booked a $107-million charge tied to the voucher program it launched in conjunction with its disclosure about price fixing. The company also reiterated it has ample cash to cover any damages as a result of class-action lawsuits that are underway.

“Never have I seen a more sly and adept marketing move than the $25 gift cards,” said retail industry consultant Mark Satov in an interview with BNN. “Because what they’re doing is they’re saying mea culpa and here’s $25, but that’s not going to cost them $25. They’re going to make money on that.”

There wasn't any direct commentary in the company's earnings release about impact on its top line from the bread scandal. However, food sales at stores that were open more than a year rose 0.5 per cent in the fourth quarter, compared with a 1.4 per cent gain in the previous quarter.

Loblaw said on Thursday healthcare reform will cost the company $250-million this year in addition to the $190-million hit it is anticipating as a result higher minimum wage rates.