By Adriano Marchese
Metro, a Canadian food retailer, announced higher profits and better-than-expected revenue in its fourth quarter as shoppers turned to its discount banners due to the increasing cost of food in Canada.
Earnings Increase to CAD 222.2 Million
For the three months ended September 30, earnings rose to CAD 222.2 million ($162.3 million), or CAD 0.96 per share. This is an increase from CAD 168.7 million, or CAD 0.70 per share, in the same period last year.
Adjusted earnings reached CAD 0.99 per share, falling slightly short of the analysts’ expectations of CAD 1.07 per share.
Impact of Union Workers’ Strike
In late July, approximately 3,700 union workers at 27 of Metro’s locations went on strike to demand fair wages, despite the company’s record profit and revenue. Metro revealed that this impasse with its employees cost the company approximately CAD 0.12 per share in the quarter.
Revenue Rises Over 14%
The company reported a revenue increase of over 14% to CAD 5.07 billion, in line with analyst expectations of CAD 5.06 billion. The rise in revenue was primarily driven by higher sales at Metro’s discount banners.
Food same-store sales saw an impressive growth of 6.8%, while same-store sales in the pharmacy segment increased by 5.5%.
Addressing the Cost of Living Issue
The high cost of living in Canada remains a pressing concern, largely due to the rising cost of food. In September, grocery inflation was recorded at a rate of 5.8% year-over-year, a slight decrease from the previous month’s rate of 6.9%, as per the Canadian consumer price index.
Supply-Chain Modernization Program
Metro marked a significant milestone during the quarter with the launch of its new automated distribution center for fresh and frozen products, located near Montreal, Quebec. This facility is part of Metro’s supply-chain modernization program and is expected to enhance service to its stores and support long-term growth.