Metro reports Q2 profit down from year ago, sales edged higher

Metro Inc. reported its second-quarter profit fell compared with a year ago as its sales edged higher.

The food and drugstore retailer says it earned $187.1 million or 83 cents per diluted for the 12-week period ended March 16. The result was down from a profit of $218.8 million or 93 cents per diluted share a year earlier.

Sales in the quarter totalled $4.66 billion, up from $4.55 billion in the same quarter last year.

RBC analyst Irene Nattel said the results were consistent with the company's guidance for the year as it executes on the final phases of investments in infrastructure and automation.

In Metro's earlier outlook for the financial year, it said it expected significant headwinds in 2024 with the launch of its automated distribution centre in Terrebonne, Que., and the launch of the final phase of its automated fresh produce plant in Toronto. It said it expects to return to historical earnings growth after fiscal 2024.

On Wednesday, the company also said it's launching its Moi Rewards loyalty program in all Metro and Food Basics stores later this year. It will withdraw from Air Miles and terminate its Thunder Bucks program later this year as part of the shift. 

The company said the program already has more than 2.5 million active members in Quebec after launching in May last year. 

Metro says food same-store sales were up 0.2% in the quarter and up 2.7% after adjusting for the Christmas week shift.

Pharmacy same-store sales were up 5.9%, boosted by a 6% increase in prescription drugs and a 5.8% gain in front-store sales.

On an adjusted basis, Metro says it earned 91 cents per diluted share in its latest quarter, down from 96 cents per diluted share a year earlier.