Canadian grocery and pharmacy retailer Metro Inc. reported a decrease in third-quarter profit despite a notable increase in sales.
The Montreal-based retailer announced a profit of $296.2 million for the quarter ended July 6, down from $346.7 million in the same period last year. This translates to earnings of $1.31 per diluted share, compared to $1.49 per diluted share in the previous year. Despite the profit decline, Metro’s sales showed a positive trend, rising 3.5% to reach $6.65 billion, up from $6.43 billion in the corresponding quarter of the previous year.
Metro’s food segment demonstrated resilience, with same-store sales increasing by 2.4%. The pharmacy division performed even stronger, posting a 5.2% gain in same-store sales. This growth was driven by a 6.3% increase in prescription drug sales and a 3.0% rise in front-store sales, highlighting the diverse strengths within Metro’s retail portfolio.
Eric La Fleche, Metro’s Chief Executive Officer stated, “We recorded solid comparable sales growth in the third quarter, on top of a very strong quarter last year, reflecting effective merchandising and good execution in our food and pharmacy banners.” This growth is particularly noteworthy given the challenging comparison to the previous year’s robust results.
However, Metro faces significant operational changes that may impact its financial outlook. The company had previously warned investors about potential headwinds in its 2024 fiscal year related to the transition to new distribution centres. These facilities, located in Terrebonne, Quebec, and Toronto, Ontario, represent a major investment in Metro’s supply chain infrastructure.
Providing an update on this transition, La Fleche noted, “Our new automated fresh and frozen facility in Terrebonne is now fully operational with productivity levels ramping up in line with our plans, and the transfer to the last phase of our automated fresh facility in Toronto has begun.” The progress suggests that Metro is navigating the complexities of modernizing its distribution network while maintaining its market position.
The company’s adjusted earnings per diluted share remained steady at $1.35, matching the figure from the same quarter last year.
