By Susan Taylor

OTTAWA (Reuters) - First-quarter profit at Loblaw Cos Ltd (L.TO: Quote, Profile, Research) rose by nearly 15 percent due to smaller restructuring costs, but Canada's biggest grocer said on Wednesday it is disappointed by its sales growth and behind schedule on its recovery plan.

Still, investors shrugged off the company's financial results and its forecast for continued profit margin pressure this year, and sent the battered stock nearly 9 percent higher.

"There was nervousness coming into the quarter because of the management change," said BMO analyst David Hartley, referring to a big executive shuffle last week.

"Now the quarter came in at what expectations were, so there's a big relief rally going on today."

The market may also have been responding to a five-point plan announced by recently appointed president Allan Leighton, which is aimed at accelerating growth.

"We are back on the front foot, aggressive, attacking in a very controlled way," Leighton told shareholders at the company's annual meeting in Toronto.

Loblaw said it will stick to its strategy of chopping prices to increase sales in a "hyper competitive" market, while squeezing expenses to offset lower margins.

"We are right now in a business where our costs are growing faster than our sales," Executive Chairman Galen Weston told shareholders. "In order to turn this business around, we have to have the opposite."