Metro profit boosted by longer quarter, acquisition

Wed Nov 14, 2012 8:00am EST
 

(Reuters) - Metro Inc (MRU.TO: Quote), Canada's third-largest grocer, reported a 72 percent increase in quarterly earnings on Wednesday, helped by an extra week in the quarter and a recent acquisition.

Sales and profit margin were boosted by the grocer's buy of a 55 percent stake in Mediterranean food seller Marche Adonis and its distributor Phoenicia Products in October 2011.

Metro said it expects the competitive environment to remain strong in 2013. Canadian grocers face rising competition as Wal-Mart Stores Inc (WMT.N: Quote) expands in Canada. Wal-Mart's Canadian unit said in February that it would remodel or open 73 stores by the end of 2012, its most ambitious expansion ever.

The Wal-Mart unit was slated to open 28 new stores in October alone, and it has been converting many existing locations to "supercenters" that feature a wider array of grocery items.

Metro said sales at established stores, a key measure for retailers, rose 1.1 percent in its fiscal fourth quarter ended September 29, and gross profit margin rose to 18.5 percent from 17.7 percent a year earlier.

Metro, which also competes with Loblaw Cos Ltd (L.TO: Quote) and Empire Co Ltd's (EMPa.TO: Quote) Sobeys, said net earnings rose to C$145.1 million, or C$1.46 a share, from C$84.4 million, or 83 Canadian cents a share, a year earlier.

Excluding closure costs and other items, adjusted earnings increased 24.8 percent to C$123.4 million, or C$1.24 a share.

Sales climbed 11.1 percent to C$2.94 billion. Excluding the extra week in the latest quarter, sales rose 2.5 percent.

Analysts, on average, had been expecting earnings of C$1.18 a share on revenue of C$2.88 billion, according to Thomson Reuters I/B/E/S. (Reporting by Allison Martell; Editing by Lisa Von Ahn and John Wallace)