Metro profit rises on grocery sales, acquisition
(Reuters) - Metro Inc (MRU.TO: Quote), Canada's third largest grocer, reported a nearly 14 percent rise in quarterly profit on Thursday, helped by higher sales and more effective cost controls.
The results benefited from contributions from Marche Adonis, a Mediterrean food retailer, and its distributor Phoenicia Products, in which Metro bought a 55 percent stake last October.
Metro and its competitors Loblaw Cos Ltd (L.TO: Quote) and Empire Co Ltd's (EMPa.TO: Quote) Sobeys are facing rising competition as Wal-Mart Stores Inc (WMT.N: Quote) expands its grocery offerings in Canada.
RBC Capital Markets retail analyst Irene Nattel said cautious consumer spending is holding back results across the stocks she covers this quarter.
"We believe (Metro's) solid Q3 results despite intense competition reinforce management's ability to drive both its offering and cost base," she wrote in a note to clients.
Sales rose 3.8 percent to C$3.70 billion in the third quarter ended June 30. Marche Adonis and Phoenicia contributed C$81.3 million in sales during the quarter.
Sales at established stores, a key measure for retailers, rose 1 percent.
Net earnings increased to C$144.4 million, or C$1.43 per share, from C$127.1 million, or C$1.23 per share, a year earlier. Excluding a one-time tax expense, earnings rose slightly more, to C$147.4 million, or C$1.46 a share.
Analysts, on average, expected earnings of C$1.37 a share, according to Thomson Reuters I/B/E/S.
Shares rose 2.85 percent to C$58.13 on the Toronto Stock Exchange.
(Reporting by Maneesha Tiwari in Bangalore; editing by Supriya Kurane and Jeffrey Benkoe)
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