January 29, 2008 / 5:12 PM / in 10 years

UPDATE 1-Metro Inc profit edges higher despite competition

(Adds details, background)

TORONTO, Jan 29 (Reuters) - Supermarket chain Metro Inc MRUa.TO reported a slightly higher first-quarter profit on Tuesday, as heightened competition and growing pains associated with its new information systems offset a tax expense decrease.

Metro, Canada’s third-largest food retailer, said earnings were C$69.7 million ($69.7 million), or 61 Canadian cents a share in the quarter, up from C$67.9 million, or 58 Canadian cents a share a year earlier.

Excluding non-recurring items, first-quarter adjusted net earnings would have been C$58.3 million, or 51 Canadian cents a share, down from C$71.6 million, or 62 Canadian cents a share.

Analysts had expected earnings per share before exceptions of 59 Canadian cents, according to Reuters Estimates.

Revenue for the quarter was C$2.51 billion, down 0.3 percent from C$2.52 billion.

The company blamed the dip in sales and adjusted earnings on “a more intense competitive environment” as well as a “learning curve” associated with its new information systems in Ontario and its Food Services warehouse.

Metro, whose main competitor is Loblaw Cos (L.TO), operates about 750 stores under the Metro, Super C, A&P, Dominion, Loeb, Food Basics, Marche Richelieu and Marche AMI banners.

It also runs more than 260 pharmacies under the Brunet, Clini Plus, The Pharmacy and Drug Basics names.

At midday, Metro’s shares were up 35 Canadian cents at C$26.20 on the Toronto Stock Exchange.

$1=$1.00 Canadian Reporting by Scott Anderson; editing by Rob Wilson

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