Metro reports $222.2M Q4 profit, sales up

Metro Inc. reported a fourth-quarter profit of $222.2 million, up from $168.7 million in the same quarter last year.

Adjusted net earnings were $228.8 million, up 4.3%. 

The grocer says the profit amounted to 96 cents per diluted share for the 13-week period ended Sept. 30, up from 70 cents per diluted share a year earlier when the quarter included 12 weeks.

On an adjusted basis, Metro says it earned 99 cents per share in its latest quarter, up from an adjusted profit of 92 cents per diluted share a year earlier.

Metro says a five-week strike at 27 stores in the Greater Toronto Area during the quarter had a negative impact on its bottom line of about $27 million after taxes or 12 cents per share, while the extra week in the period had a favourable impact of $27 million net of tax or 12 cents per share.

Sales in the quarter totalled $5.07 billion, up 14.4% from $4.43 billion a year earlier. Excluding the 13th week in 2023, fourth quarter sales were up 5.4%.

The increase came as food same-store sales rose 6.8% and pharmacy same-store sales gained 5.5%.

Metro had a 53-week fiscal year for 2023, compared to 52 weeks in 2022. Sales for fiscal 2023 totalled $20.7 billion, up 9.7% compared to $18.89 billion for fiscal 2022. Excluding the 53rd week in 2023, sales were up 7.6%.

The company said it's ramping up a new distribution centre north of Montreal and the expansion of its Montreal produce facility. It's also preparing to launch the final phase of its automated fresh facility in Toronto next spring.

Though Metro said these investments position the company well for long-term profitable growth, it said it's facing "significant headwinds"" in the coming financial year due to "temporary duplication of costs and learning curve inefficiencies, as well as higher depreciation and lower capitalized interest."

Because of these headwinds, Metro forecasts adjusted net earnings per share next year to be flat to down ten cents, and said it expects to resume profit growth after financial year 2024.

Metro's outlook for the 2024 financial year was "cautious and unusually specific," RBC analyst Irene Nattel said in a note. Investors will likely be disappointed in the outlook for the coming year, she said, but noted the company's strong track record.

With files from Canadian Grocer Staff