Metro’s sales rose $3.7 billion for the second quarter of fiscal 2019, 27.7 per cent over the same quarter last year. Excluding $686.4 million in sales for the second quarter of 2019 resulting from the Jean Coutu Group, sales rose four per cent.
Same-store food sales rose 4.3 per cent, while same-store pharmacy sales were up 1.1 per cent. Food basket inflation was about 2.5 per cent.
Net earnings for the quarter were $121.5 million, up 13.7 per cent; adjusted net earnings were $155.1 million.
Restructuring of Metro’s retail network imposed expenses of $36 million. The restructuring is focused on reducing operating costs; the project includes converting, relocating or closing a dozen stores, which will result in severance costs, occupancy costs and asset write-offs.
TD Waterhouse reported that:
- Food EBITA increased 2.5% year-over-year despite strong same store sales growth of 4.3%
- Tonnage was +1.8%, marginally ahead of expectations reaffirming Metro’s strong merchandising skills
- Higher inflation boosted gross margin but much higher transportation costs (related to a strike at a major carrier) compressed EBITDA margin
“We delivered solid second quarter results, with strong same-store sales growth across our network,” said president and CEO Eric R. La Flèche. “We are pleased with the progress of the integration of the Jean Coutu Group, reaching run-rate annualized synergies of $50 million as we approach the first anniversary of the acquisition. We continue to invest in our store network, as well as in our distribution and technology projects, and we are confident in our ability to deliver long-term growth."
The company also announced the retirement of François J. Coutu as president of the Jean Coutu Group, effective May 31.
To listen to or read the transcript of Metro's earnings call click here.