Metro maintains sales growth in the third quarter

Metro Inc. accelerated sales growth in its third quarter of fiscal 2022, maintaining year-to-date gains.

In the 16 weeks ended July 2, sales rose 2.5% to $5.87 billion (Canadian) from $5.72 billion a year earlier, Montreal-based Metro reported. yesterday. The Canadian food and pharmaceutical retailer rebounded from a 2% decline in the third quarter of 2021, which reflected the cycle of strong sales increases driven by the pandemic.

On a comparable basis, food sales edged up 1.1% in the third quarter of 2022 after declining 3.6% in the prior year period. Metro noted that food basket inflation was 8.5%, compared to 5% in the second quarter of 2022. Online food sales for the third quarter remained flat after a 19% jump in the 2021 quarter. .

Pharmacy comparable sales grew 7.2% in the third quarter of 2022, building on a 7.6% gain in the prior year period, and were fueled by a 5.6% increase % of prescription drugs supported by COVID-related activities, such as the distribution of rapid tests, and by a 10.7% increase in initial sales, mainly health items and over-the-counter cosmetics, said Metro .

The strong performance of pharmacies also contributed to Metro’s gross margin in the third quarter by offsetting a decline in the food retail margin, the retailer noted.

“We are pleased with the performance of our food and pharmaceutical businesses in the third quarter, which was achieved in a challenging operating environment with growing inflationary pressures as well as persistent labor shortages impacting the supply chain. supply and our operations,” said Metro’s President and CEO. CEO Eric La Flèche said in a statement. “I would like to thank our teams, who are striving to deliver the best possible value to customers in these times of inflation through our multiple formats, effective promotional strategies and strong private label offering.”

Ultimately, net income for the third quarter of 2022 totaled $275 million, or $1.14 per diluted share, compared to $252.4 million, or $1.03 per diluted share, a year earlier. Adjusted net income was $283.8 million, or $1.18 per diluted share, compared to $261.2 million, or $1.06 per diluted share, a year ago.

Analysts, on average, had forecast adjusted EPS of $1.18, with estimates ranging from a low of $1.16 to a high of $1.22, according to Refinitiv.

“We are on track with our supply chain modernization program as the transition to our fully automated frozen food distribution center in Toronto is now complete and the ramp-up is progressing well,” added La Arrow.

The company broke ground on the frozen Toronto-area DC, located in Etobicoke, Ontario, in September 2019 and opened in early January 2022. A $420 million project in Quebec, announced in 2020, is also waiting to build an automated DC for fresh produce. and frozen products and expand an existing dairy and product distribution center. The fresh/frozen facility in Terrebonne, Quebec, just north of Montreal, is scheduled to open in 2023, while the expanded dairy/dairy facility, located in Laval, Quebec, should be completed in 2024.

Overall, Metro’s retail base in Quebec, Ontario and New Brunswick includes more than 960 grocery stores under the Metro, Metro Plus, Super C, Food Basics, Adonis, Marché Richelieu and Première Moisson as well as approximately 650 pharmacies and pharmacies under the Jean Banners Coutu, Brunet, Metro Pharmacy and Food Basics Pharmacy banners.

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