UPDATE 1-Canada grocer Metro's profit beats on Ontario rejig, acquisition

Wed Nov 19, 2014 8:48am EST
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Nov 19 (Reuters) - Canadian grocer Metro Inc reported a higher-than-expected quarterly profit, helped by the reorganization of its Ontario store network and the acquisition of a majority stake in bakery chain Premiere Moisson.

Metro converted some of its Metro stores into Food Basics discount grocery outlets to attract customers looking to spend less amid subdued growth in the economy.

The company, which is facing intense competition from U.S. retailers such as Wal-Mart Stores Inc and Target Corp , also said in June it would buy a majority stake in Premiere Moisson to expand its product offerings.

Bigger rival Loblaw Cos Ltd reported a better-than-expected quarterly profit last week, helped by sales from its purchase of Shoppers Drug Mart.

Metro's same-store sales rose 3.1 percent in the fourth quarter ended Sept. 27.

Net income rose to C$115.6 million ($101.8 million), or C$1.32 per share, from C$79.5 million, or 83 Canadian cents per share, a year earlier, when Metro took a C$29.4 million charge related to the Ontario stores reorganization.

Revenue rose 3.9 percent to C$2.71 billion.

Analysts on average had expected a profit of C$1.27 per share and revenue of C$2.66 billion, according to Thomson Reuters I/B/E/S.

Metro's shares closed at C$82.50 on the Toronto Stock Exchange on Tuesday.

Up to Tuesday's close, the stock had risen 27 percent this year. ($1 = C$1.14) (Reporting by Anet Josline Pinto and Manya Venkatesh in Bangalore; Editing by Savio D'Souza and Kirti Pandey)