Metro looks to regroup as it takes $90M hit due to strike in ‘challenging’ Q3

Food and pharmacy retailer Metro Inc. is focused on returning its operations to status quo as it reels from the impacts of the strike at its distribution centre in Laval, Que.

Metro said the labour dispute at its produce distribution centre negatively impacted third quarter results by $90 million. 

That includes an estimated $66 million in lost profit and direct cost impact, or $0.32 per share. 

The company reported net earnings of $211.3 million for its third quarter, down 34.6% from last year. Food same-store sales declined 1.5%.

Four weeks into its fourth quarter, Metro said food same-store sales are still down 1.5%. 

President and CEO Eric La Flèche, who is retiring at the end of this year, said he expects fourth quarter results will continue to be “significantly impacted” if the strike is not resolved. 

“Our third quarter was certainly challenging,” La Flèche said. “We remain committed to reaching a negotiated agreement with the union.”

La Flèche said Metro has presented a new global offer to the union with “competitive wage and working conditions that compare very favorably with the market. In addition to offering quality long-term jobs here in Quebec.”

“You look at our same-store sales and our total sales and our financial performance year-to-date—we're in a very strong position, gaining share in both markets, doing really well. So clearly, this has had a significant impact,” La Fleche said on Metro Inc.’s earnings call Wednesday (Aug. 12). “We've been fighting with our hands tied behind our backs for a while. We're in tighter shape today, but it's been a challenging order. So we attribute the drop in our sales at this moment to the strike for sure. That said, the market's very competitive… That's what we expected, and we were facing that in the first two quarters anyway.”

This is a developing story. More to come…