Metro Posts Double-digit Q1 Earnings Growth
For the first quarter of 2013, Canadian grocer Metro Inc. reported net earnings of CAN $121.4 million (US $120.9 million), an increase of 17.1 percent over net earnings of CAN $103.7 million (US $103.3 million) for the year-ago period, and fully diluted net earnings per share of $1.23, a 21.8 percent increase from last year. The company also posted net earnings from continuing operations of CAN $115 million (US $114.5 million), an 11 percent rise, and fully diluted net earnings per share from continuing operations that were up 14.9 percent to CAN $1.16.
According to Eric R. La Flèche, president and CEO of Montreal-based Metro, the results “were achieved in a challenging economic environment of very low food inflation, intensifying competition and cautious consumers. Our teams executed well on our business plans, and we are confident that we can continue on our growth path in the coming quarters.”
Metro’s first-quarter sales came to CAN $2,704.7 million (US $2.7 billion), from CAN $2,632.6 million (US $2.6 billion) last year, a 2.7 percent increase, and the grocer’s same-store sales grew 1.5 percent. Since the first quarter for fiscal 2013 includes the sales for the week preceding Christmas, while in fiscal 2012, the sales for that week were included in the second quarter, “the Christmas-week shift will have a negative impact on 2013 second-quarter sales compared to the 2012 second quarter,” noted Metro, adding, “We experienced very low inflation in our food basket in the first quarter.”
Gross margin as percentage of sales in Metro’s first quarter of 2013 was 18.7 percent, compared with 18.4 percent in year-ago period. The company’s share of earnings in Laval, Quebec-based convenience store operator Alimentation Couche-Tard was CAN $19 million (US $18.9 million) for the first quarter of 2013, versus CAN $13 million (US $12.9 million) for the year-ago period.
In the first quarter of 2013, Metro discontinued its foodservice operation and disposed of the Distagro division which supplied restaurant chains and convenience stores belonging to, and operated by, gas station chains. Net earnings from discontinued operation were CAN $6.4 million (US $6.4 million) for the first quarter of 2013, compared with CAN $0.1 million (US $0.1 million) last year.
On Jan. 28, the company’s board of directors declared a quarterly dividend of 25 cents per common share payable March 15, a 16.3 percent increase over the dividend declared for the same quarter last year. On an annualized basis, the dividend represents about 20 percent of Metro’s 2012 net earnings.