Metro reports dip in sales as consumers return to restaurants, higher food inflation
Metro Inc. reported an uptick in profit in its latest quarter even as grocery sales edged lower as public health measures were eased and consumers returned to restaurants.
The Montreal-based grocery and drugstore retailer said Wednesday while sales dipped slightly during the 12-week period ended Sept. 25, they remained elevated compared to pre-pandemic figures.
Metro CEO Eric La Fleche said the company recorded net earnings growth in the fourth quarter "despite lower sales as we cycled exceptional sales last year.''
"As government restrictions eased over the summer, a portion of food consumption transferred back to restaurants,'' he said in a report to shareholders. "However our food sales continue to compare favourably to pre-pandemic levels.''
The company also highlighted the rising cost of food in its most recent quarter.
Metro said food basket inflation was about 2%; double the 1% recorded in the previous quarter.
"Our industry is experiencing cost inflation pressures, mostly with respect to cost of goods sold,'' the company said in a management discussion and analysis.
"While it is difficult to predict how our customers' habits, the labour market and food basket inflation will evolve over the short term, the fundamentals of our business remain strong, and our sales continue to compare favourably to pre-pandemic levels.''
Metro reported Wednesday a fourth-quarter profit of $194 million or 79 cents per diluted share, up from a profit of $186.5 million or 74 cents per share in the same quarter a year earlier.
Sales in the quarter totalled $4.09 billion, down from $4.14 billion in the same quarter last year when the company said it saw exceptionally strong sales due to the pandemic.
The company, which operates under several banners including grocers Metro, Metro Plus, Super C and Food Basics, as well as drugstores under the Jean Coutu, Brunet, Metro Pharmacy and Drug Basics banners, said food same-store sales were down 2.9% compared with a year ago, while pharmacy same-store sales were up 4.1%.
On an adjusted basis, Metro said it earned 81 cents per diluted share, up from an adjusted profit of 77 cents per diluted share a year ago.
Analysts on average had expected an adjusted profit of 80 cents per share and $4.14 billion in sales, according to estimates compiled by financial markets data firm Refinitiv.