April 16, 2014 / 11:29 AM / 5 years ago

Canadian grocer Metro's profit beats as Ontario sales rise

(Reuters) - Canadian grocer Metro Inc (MRU.TO) posted a higher-than-expected quarterly profit as a reorganization of its Ontario operations boosted sales and the company raised its dividend.

Metro, which is facing stiff competition from U.S. retailers such as Wal-Mart Stores (WMT.N) and Target Corp (TGT.N), said in August that it would convert about half a dozen Metro stores in Ontario into Food Basics discount outlets, close one to three stores and offer early exit to some employees.

“Our merchandising strategies and investments, as well as our reorganization of our Ontario store network enabled us to increase sales in a market that remains intensely competitive,” Metro said in a statement.

The company’s net income fell to C$96.9 million, or C$1.07 per share, in the quarter ended March 15 from C$362.7 million, or C$3.80 per share, a year earlier.

In the second quarter of 2013, the company had an after-tax gain of $266.4 million related to the sale of part of its stake in Canadian convenience store operator Alimentation Couche-Tard (ATDb.TO).

Analysts on average had expected a second-quarter profit of C$1.02 per share, according to Thomson Reuters I/B/E/S.

Metro’s sales rose 1.7 percent to C$2.55 billion in the second quarter. Analysts on average had expected C$2.52 billion.

Same-store sales rose 1 percent.

The company raised its quarterly dividend to 30 Canadian cents per share from 25 Canadian cents.

Metro’s shares closed at C$64.28 on Tuesday on the Toronto Stock Exchange.

Reporting by Sneha Banerjee in Bangalore; Editing by Kirti Pandey

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