Metro Sales Rise, Earnings Dip in Promotional Q4

Metro Inc. said its net earnings decreased by 8.9% during its fiscal fourth quarter as the retailer waged promotional battles and absorbed costs associated with closing a food processing facility and a warehouse.

MONTREAL — Metro Inc. [3] here on Wednesday said its net earnings decreased by 8.9% during its fiscal fourth quarter as the retailer waged promotional battles and absorbed costs associated with closing a food processing facility and a warehouse.

Sales of $2.6 billion (U.S.) during the eight-week fourth quarter, which ended Sept. 24, increased by 3.8% while same-store sales were up 3.2%. Net earnings totaled $84 million, and EBITDA slid 7% to $169 million. Gross margin as a percent of sales slid 40 basis points to 17.9% of sales.

The company absorbed nearly $20 million in costs associated with the closure of a Toronto warehouse facility and a meat processing plant in Montreal. Excluding these costs, earnings per share would have improved by 11.4%, Metro said.

Eric LaFleche, chief executive officer of Metro, in a conference call Wednesday said that a promotional sales environment helped to blunt the impact of food inflation during the quarter. LaFleche said the company would look to expand its newly acquired four-store Adonis chain to as many as 12 or 15 locations in the next five years; and that the Adonis acquisition would help the chain improve its ethnic offerings at its Super C and Food Basics banners.

For the fiscal year, Metro reported total sales improved 0.8% to $11.2 billion (U.S.), while net earnings dipped by 1.4% to $359.4 million.