MONTREAL — The sale of its stake in the Alimentation Couche-Tard convenience chain helped boost profits during the second quarter for Metro Inc., but the top line was under pressure from competitive openings, a calendar shift and disruption from the implementation of a new warehouse-management system.
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For the period that ended March 16, Metro reported earnings of around $361 million (U.S.), an increase of 281.7%, sparked mainly by a $300 million gain from the sale of nearly half its stock in Couche-Tard (parent of the Circle K chain in the U.S.). Excluding that event, Metro said earnings from continuing operations totaled around $99 million, up 4.4%.
Sales were down 2.6% to $2.5 billion (U.S.), due mainly to a calendar shift of some holiday sales to the first quarter. But Metro also lost some pharmacy sales as a result of a glitch while converting from an old warehouse management system to a new platform. The retailer is still sorting through the issue now, which has caused disruptions in service levels in pharmacy and health and beauty products, Eric LaFleche, Metro’s chief executive officer, told analysts in a conference call.
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“That didn’t go so well,” he said, stressing that similar shifts of food and fresh items to new systems caused no such problems.
LaFleche said sales were flat excluding the effects of the calendar shift and the warehouse management issues. Same-store sales were also flat, as traffic declined slightly and average basket grew.
“The environment remains very promotional,” he said, citing new store openings, particularly in metro Toronto.
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